What is the difference between a successful entrepreneur and a person who just dreams of starting a business? Several qualities, including drive, dedication and the willingness to take risks. But most importantly, entrepreneurs know how to take the first major step when starting a business, and that is writing a persuasive business plan.
Companies need capital in order to get off the ground, and a well-constructed business plan can either attract investors or dissuade them entirely. Successful entrepreneurs understand essential business plan requirements that are likely to attract the interest of banks, lenders and investors.
- Cover Sheet and Table of Contents
It is critical that a business plan look professional above all else. Even if it contains the most compelling and carefully constructed ideas and objectives, no one will read it if it looks unprofessional. Much like dressing properly for an interview, your business plan needs to be presentable.
- Executive Summary
Give investors a 30,000-foot view of your proposed business. Briefly explain what your company will do, how it will make money, why customers will desire its services, etc. It also helps to include the amount of investment you seek.
- Market Opportunity
This is a data-heavy portion of your business plan. Explain the current market and use numbers. Things like the target market's size, how fast the market is growing, potential business threats and valuable opportunities belong here.
- Industry Analysis
Chances are, your business is not 100 percent unique. Outline your competition and explain what they sell, how much of the market they claim, where they are and what kind of marketing they do. Be sure to also include indirect competitors.
- The Team
Lenders are investing in your people as much as they are in your business. Include a profile of each person associated with your business. Detail their experiences, education and any other pertinent information.
- Business Model
When it comes to business plan requirements, the business model makes up the bulk of the plan. It outlines how the business will run, including revenue streams, cost structure, marketing budgets and other monetary topics. List any suppliers and distribution partners, proposed rental payments and other information relevant to how your business will work.
- Financial Projections
No one can predict the future, but it's important to outline a 12-month financial plan. After analyzing the market and assumed costs, give an honest prediction of where your business should be financially after a year. The skills you learn in business school, such as an online MBA program, about financial forecasting and analysis can be very helpful here.
- Worst Case Scenario
Be realistic. Let investors know what will happen if the market turns. Know what your plan is for economic downturn or a stronger-than-anticipated competitive presence. Show how your business can survive when things go south.
Many budding entrepreneurs underestimate the initial costs of a new business. This is where everything from office supplies to office space is outlined. Creating a comprehensive list of needs will help you see the true expense of starting a company.
Like any informational document, it is important to cite your sources. If there is a fact or number in your business plan, it needs to be substantiated.
A typical business plan is between 20 and 30 pages, which can be intimidating to a new entrepreneur. Fortunately, when it comes to business plan requirements, the document follows a formula. After careful research and initial exploration, a business plan can easily come together.
You can learn many of the skills required to put together a winning business plan through an online MBA degree. After completing your coursework, you may have the knowledge and confidence to get your business idea off the ground.
Learn more about the FIU online MBA program.
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