You have a great idea. You’ve assembled a crack team. And now, you’re ready to finally kick start your business. But one problem remains — where will the money come from?
A Business Plan is critical to raise funding for your startup, and turn it into a reality. A Business plan tells potential investors what your startup does, and how it’ll plan to go about it. Here are some tips to keep in mind while writing a Business Plan.
1. Address the problem you’re solving: Most new business attempt to solve a problem, and make things better for their customers. Your Business Plan should begin with a summary of the problem you’re attempting to solve. The problem should be introduced in clear, simple terms. Avoid jargon — your potential audience isn’t necessarily an expert in your domain. Uber, for instance, described how cabs operated in 2008 — cabs were expensive, had to be booked over phone, drivers had to wait for long periods looking for riders.
2. Describe your solution: Describe how your solution will help people solve their problem. Your description should be clear and state why your solution is superior to other alternatives in the market. Uber, for instance, described its technology. Its app would digitally connect riders and drivers, and make things better for everyone.
3. Talk about your team: Why are you the best people to be solving the problem? Talk about the qualifications of the key members in your team, and how they’re best suited to be executing the idea. Also talk about their motivations — how committed are they to solving the problem. Talk about their histories, and background, and their passions.
4. Talk numbers: You can use all the words you want to describe your idea, but in business terms, a number is worth a thousand words. Instead of saying we expect to make lots of profits, put a number to it, and justify why you’re saying it. Instead of saying we’ll need a big office for a business, put a number on it — how many square feet will you need? Being specific about your plan will make investors realize you’ve done your homework, and are prepared to finally start operations.
5. Talk about your competition: Unless your idea is a one-of-a-kind, you’ll certainly have some competition. When Uber started off, its competitors were traditional taxis and limousines; Airbnb competed with traditional hotels and homestays. Do your research — talk about how you plan to take on existing (and future) competition.
6. Talk about the money: While it’s all nice to solve a problem and make the world a better place, businesses are usually started to earn money. Tell your investors how they can benefit from betting on you. Investors who fund your company are looking for returns, and tell them how they’ll make boatloads of money by funding your business. Once again, talk in specifics — talk numbers, projections, and profits you expect to make. You business plan ultimately boils down to this, and make sure you have this section nailed down.