Business Planning
12 Tips for a SUCCESSFUL Business Plan

1. Know Your Business.

While a written business plan can serve as a valuable tool if you are seeking business funding, the actual process of drafting your business plan will force you to consider many issues critical to your company's future success. Furthermore, savvy investors often skim through written Business Plans; thus, it will be YOUR responsibility to personally address your potential investor's concerns regarding your industry, your company, and your business plan.

Strong business planning software will actually walk you through the planning and development process, step-by-step, breaking each element down into manageable segments. During the process, you should also gain an understanding of what issues you should consider and why each is important to your plan.

This step-by-step process will also lead to the development of basic information necessary for the creation of financial projections related to balance sheets, profit & loss statements, and cash flow statements.

Thus, if you intend on using software for the creation of your business plan, it is critical that the package you select allows you to customize the plan to your specific needs.

Quick NOTE: The Executive Summary

The "Executive Summary" is the first section (and often the last) that will be reviewed by your potential investors. Regardless of how you decide to draft your plan, your "Executive Summary" should always contain the following sections:

• The primary objectives of your company.
• Your key personnel.
• The market you address, its needs, how those needs are currently met, and how you address its shortcomings.
• A detailed description of your product or service, including how it addresses customer needs and desires.
• Financial projections for five years, profit point, break-even point, and ROI for investors.

2. Be Flexible & Willing to Change.

As you begin to implement the business plan the real world may not embrace your business model. Determine what works and what doesn’t work. Be ready and willing to alter your business plan accordingly. Often, you may even discover a greater market potential that may require you to re-think your entire plan.

3. Consider Alternatives to Product Distribution.

Failing to understand how your product should be distributed is a sure way to turn away investors. Do your homework on the various distribution channels. Know their expectations and working models. Find the channel that works with your pricing model and facilitates your growth requirements. If possible, develop partners with brand names that can provide credibility and growth potential.

4. Be Flexible with Investors on Issues of Control.

Don’t focus on retaining control of your company; focus on what makes the company profitable. Investors need to see that you are willing to assume some level of risk and are not intent on hoarding stock. Great businesses have been built by entrepreneurs that understood their limitations and hired executives who knew more than they did. Focusing on profits creates capital opportunities. Focusing on control creates potential barriers to investors.

5. Develop a Strong Management Team.

A business plan is only as good as the people responsible for making the business succeed. Identify who will run the business, their achievements, and their ability to make the business a success. Obtain commitments from qualified personnel for operations, financial management, development, marketing and sales.

If not yet identified, make note of those key positions for which you must identify and recruit the appropriate individuals with the requisite education and experience.

Don’t hide your weaknesses or shortcomings. Identify them and disclose your plan for overcoming problems and obstacles.

6. Give Customers a Reason to Buy from You.

There must be a need and desire for your product. No longer will a clever idea, by itself, bring in the money. You need customers willing to test your product. Paying customers validate your pricing strategy.

7. Provide Reasonable & Conservative Projections.

Revenue projections that increase by the same percent each year raise red flags for savvy investors. You should anticipate various increase levels as your business progresses through different stages of growth. Your engineering, sales and marketing expenses will also change with these growth stages. Research your industry to determine expected ratios for expenses and revenues per employee. Investors will take you seriously when they see that you have a clear understanding of the financial implications.

8. Give Investors Alternative Exit Strategies.

Understand what motivates an investor, their expectations, their desired exit strategies. Moreover, gain an understanding of your potential investor's minimum acceptable return on investment (ROI). The investor has many alternative investment opportunities. If the investor is going to take a risk on your concept he or she must "BELIEVE" in your plan. Demonstrate your potential for profitability with detailed descriptions of the market, your personnel and your product concept.

9. Don’t Ignore the Competition.

Customers always have a choice. They can either choose to do things the way they have always done them, find alternative solutions, or purchase your product. Identify your competitors, their strengths and weaknesses, and discuss emerging technologies. Without this information, your business will not be able to effectively respond to your competition.

10. Accurately & Honestly Define Your Market.

Research your market. Investors can easily discern between substantive and superficial data. Define and locate your market niche then determine its TAM (Total Available Market) and SAM (Served Available Market). Through the use of surveys (primary data) and secondary data you can calculate the approximate percentage of the SAM your company can penetrate, and how much to increase the SAM. Stating that you will capture the entire TAM is a clear indicator you don’t understand the market and that you have unrealistic expectations for your potential in that market.

11. Identify the Methods & Costs of Getting Your Message to the Marketplace.

Investors want to know what methods will be employed to gain customer attention, customer acquisition costs, average and target per-customer revenues, customer breakeven milestones and product life cycles. They also want to see your future plans for retaining existing customers. In most every business sector the returning customer represents the most reliable source of near and long-term revenues and profits.

12. Select a Business Structure and Protect Your Assets.

If you are seeking venture capital or equity business funding, most investors require that you maintain a form of business where:

• Owners' personal assets are protected from business creditors.
• Shares of ownership are easily transferable.
• Fundamental actions require certain formalities and/or approval by the investors.
• Business property is protected from Law suites and under-insured policies.
• Business assets including all equipment is protected from Governmental agencies, Tax collection agencies and employees.

You can protect your personal assets and your business structures with our proven strategies.  Don’t wait until it’s too late for us to help you. Waiting until an law suite is filled or an employee or taxing agencies services notices can cause you and your company to lose all assets.