By Steve Williams CExP™, CMMA
If you are an existing business and looking for business funding, you’ll need to create a business plan that meets the best practice approach and delivers the content investors want to see.
In this article, we’ll walk you through the process of creating a business plan that will get your business the money it needs to grow.
We’ll cover everything from market analysis to financial projections, so you can make sure your business is poised for success.
Problem and Solution
The first step in writing your business plan is identifying the problem you know how to solve. Your business plan should outline how you are solving this problem, and explain why your solution is the best option available.
Then identify your target market and product or service that meets their needs and wants. Market analysis and research to confirm this gives investors confidence you know your business.
The next area of your business plan should focus on you and your team’s relevant experience. Investors are not just focusing on your financials or product, but also on the team that is responsible for the results.
Your Differentiated Business Model
Detail your business model, and how you make money. This section should also highlight your competitive advantages, and how you stand out from the competition.
Know Your Numbers
The financial section of your business plan is critical for getting funding. You’ll need to provide a detailed overview of your business’s past, present, and future financials.
This section should include a pro forma profit & loss, with projections for the next three to five years.
And make sure you know your numbers, nothing creates a barrier for potential investors like an owner that does not know their numbers.
The format you present to potential investors is based on what type of investor they are. If they are an institutional investor, such as a bank, they will want to see your business plan in longform.
If the potential investor is a private investor they are more likely to request your business plan in Pitch Deck format.
Objective Viewpoint is Critical
When you’re done with your business plan, have someone who knows your business and the investment community read it over to make sure it’s clear, concise, and achieves the objective get investors interested in your business.
Another option, professional business planners can be an invaluable resource during the business planning process, providing an objective viewpoint, offering suggestions for improvement, and strategic advice.
You may also want to engage them to facilitate the whole business planning process, not only will this give you a third-party viewpoint throughout, but will ensure you can stay focused on your business while someone with expertise builds a business plan investors will be interested in.
Your Follow Up
The business plan is not a set-it-and-forget-it document, as your business grows and changes so too should your business plan.
Review and update your business plan regularly, at a minimum of once per year, to ensure it is current and accurate. This will also allow you to track your progress against your goals.
If you follow these steps, you’ll be on your way to writing a business plan that will get you the funding you need to grow your business.
Keep in mind that this is not a one-size-fits-all approach, so make sure to tailor your business plan to fit the specific needs of your business. And be prepared to answer any questions potential investors may have.
With a well-written business plan, you’ll be on your way to getting the funding you need to grow your business.
Steve Williams CExP™, CMMA is a Partner at the Incentica Advisory Group in Calgary. Steve has completed over 100 business and strategic plans for some of the biggest and best companies.