A start-up business plan is, in essence, a detailed pitch. It outlines a company’s vision and goals, and spells out, in some detail, the ways and means by which it plans to accomplish them. It also indicates where, when, and how funds can contribute to the execution of this plan. A well-researched and written document is a reassuring sign of your seriousness of purpose and your preparedness to embark on such a venture: qualities that investors rely on when deciding whether to part with large amounts of money. Before you can prepare such a plan, it is important to think it through carefully. When it comes to writing a successful business plan, expect to go through multiple drafts as you clarify and refine your vision, your objectives, and the entire start-up process. First, there are some questions you will have to answer, honestly, prior to undertaking the business of writing the plan. Pre-plan pondering “I think therefore I am” French philosopher Rene Descartes once famously said. One could quite easily rephrase his words thus: I think therefore I am (able to successfully plan). These are some questions you must ponder, and answer, before you begin chalking out a business plan:
- How much seed money do you expect you will need to start your business?
- How much of a say are you willing to give your investors in your business?
- When do you expect the business to turn a profit?
- When can your investors expect to recover the money that they have invested?
- What are the odds that your business will fail?
- Have you figured out what your back-up plan will be?
Form is a factor Once you’re done answering these questions, you will incorporate your responses into your business plan. How you write it will either communicate your comprehension of your start-up’s financial needs and outcomes or obscure it. These are a few tips to keep in mind when you’re putting your plan together.
- You’re not writing the Great Indian Novel. Keep your writing simple, crisp, attention grabbing, and to the point. Venture capitalists will spend about 30 seconds on your magnum opus (if you’re lucky.)
- Make sure your spelling and grammar are flawless. Would you turn up to an important meeting wearing your food stained pyjamas? No. So don’t turn in a dishevelled business plan either. It will reflect poorly on your attention to detail.
- Polish your executive summary. An executive summary is a document’s calling card: it announces its intentions as succinctly as possible. With only 30 seconds to spare, most investors will turn their attention to the executive summary first. If it’s interesting enough, that’s when they’ll actually read the plan.
Is your content complete? Don’t forget to include your profit-and-loss statement or balance sheet, showing what you expect your turnover to be on a monthly basis for the first year, and every quarter in subsequent years. A document that’s simple yet comprehensive is what you should aim for, and what today’s investors are looking for.