- Write a business plan to establish business direction, obtain financing, and attract investors.
- Common challenges in writing a business plan include identifying financial, demographic, and achievable goals.
- Some entrepreneurs find it difficult to create a business plan that is concise, interesting and informative enough to prove that their business idea is viable.
- You can streamline your business planning process by doing your research, talking with experts and peers, and working with a business consultant.
Writing a business plan is difficult, but it is necessary. A business plan is used for various tasks such as setting the direction of your business, obtaining financing, and acquiring new investors. How you plan to use your business plan will affect how you tailor it, since each business plan must uniquely meet the specific demands of your stakeholders.
What is a business plan?
Entrepreneurs know that dreaming about a business idea is the easiest part – making your dreams come true is the real challenge. One of the first steps in overcoming this challenge is to create a business plan, a task that is quite daunting no matter how good your idea is.
According to Yoram Baltinester, founder of Decisive Action Workshops, a business plan tells the story of your business, from the big picture to the smallest details. It explains why your business exists, the problems you aim to solve, the methods you will use to solve those problems, and your vision for the future of the business.
“This vision includes everything you would expect from a good friend to show you as he guides you through his business after years without you speaking,” Baltinester told Business News Daily. “From the values and culture of the company to market segments, products or services and competitors, from the appearance of the head office to the reputation of the company in the market and with the media, and of its finances and her performance in what she does to give back to the community and the world. ”
Your business plan is essentially your card for success. Having a business plan is essential if you are seeking financing. However, just because it is an important document does not mean that it must be difficult to create. Rick Cottrell, CEO and owner of BizResults.com, said the difficulty of strategizing your business plan depends on the type of business you have, the size of your business, and the complexity of the outcome you want.
“A business plan for launching an entirely new product or service would be more difficult than for an established company creating a business plan for the following year,” Cottrell said. “The established business would have a deep understanding of its sales, revenues, customer demographics and profitability. The established business would be able to more accurately forecast sales and profits, and produce a detailed baseline of desired outcomes if it needs to seek outside investment for growth. ”
How detailed should a business plan be?
The length and complexity of your business plan will be unique to your business, as it will depend on your goals for creating the business plan. While your business plan could be as short as a page or as long as a book, Baltinester said the average business plan he creates with his clients is four to six pages long.
Cottrell said business plans should cover the following topics:
- Your current business situation
- The overall outlook for your industry in general (for example, growth, stagnation or decline)
- How do you differentiate yourself from the competition
- What are your projections for sales and revenue for the coming year, five years, etc.
- How are you going to make these projections
Some industries, like finance, have additional regulations on what your business plan should include. [Read related article: Writing a Business Plan? Do These 5 Things First]
The most common challenges of writing a business plan
The challenges of writing a business plan vary. Do you have all the information you need about your business? Does your industry have strict guidelines that you must adhere to? To help you prepare for some of the common issues you may face, we asked business owners, strategists, and experts what was the hardest part of writing a business plan and how. overcome it.
Here are 10 of the most common challenges you may face when writing your business plan.
1. To start
“The hardest part of writing a business plan is getting started. Lock yourself in a room, turn off your phone and concentrate. “- John Gavigan, Managing Director, Effort
2. Identification of cash flows and financial projections
“The hardest part of writing a business plan is the financial part. It’s hard to project numbers onto a whole new business with, possibly, a whole new concept. There is no road map, no one to follow. can do is find a similar company and try to assess what they are doing. “- Rosemary O’Brien, Owner, Pocket Parks editions
3. Know your target market
“The hardest part, but the most important, is getting to grips with the demographics of your target audience. You need to know who you will be selling to and what the size of the market is to accurately estimate how many people you can reach and sell your product or service to. “- David Batchelor, founder, DialMyCalls
4. Be concise
“[One of the top challenges is] keep it short and sweet. The more concise and focused a plan, the more likely business owners are to achieve the goals they set for themselves and for their business. Rick Faulk, CEO, Robotics Locus and Quiet logistics
5. Make it interesting
“The hardest thing about writing a business plan is being able to tell your story in a way that gets people to buy into your idea. If you tell a lousy story, people won’t want to invest. “- MJ Pedone, President and Founder, Indra Public Relations
6. Set achievable goals
“Set goals that are clear, concise, and understandable – these goals must also be realistic. When people can’t see the vision of the plan, they won’t take any action to pursue the plan. Plus, setting goals that match your plan, you have measurable goals to track your progress. ” – Mike rodriguez, coach and business consultant
7. Be realistic about the growth of the business
“[You need] to be honest with yourself. Entrepreneurs are dreamers and optimists by nature, and business plans force them to question their assumptions about market opportunities, competition, their product’s value, and growth projections. This is where they find themselves in defining an ambitious but somewhat realistic business plan. “- Vikram Aggarwal, CEO and Founder, EnergySage
8. Prove that your idea is worth it
“A common challenge is to be able to express your idea and your growth prospects in concrete figures. If you are looking for capital, numbers are of the utmost importance. Investors and lenders will review the projections and determine the prospects for profitability of the business. They’ll want a return on their investment over time, whether it’s a year, five years, or whatever the parties agree to. ” – Rick Cottrell, CEO and Owner, BizResults.com
9. Find the right amount of flexibility
“The hardest thing about writing a business plan is making it flexible enough to allow change without making it so flexible that it isn’t really a plan. There is a happy medium between these worlds, and this is where the most success can be found. “- Idan Shpizear, co-owner and co-founder, 911 Restoration
10. Create a strategy that you can implement
“In my experience, the biggest challenge that CEOs face is creating a business plan that can actually be implemented successfully. Many companies create plans, but all too often those plans sit on a shelf with unfulfilled actions, unfulfilled goals. – Renee Fellman, turnaround expert and CEO change agent
How to overcome the challenges of writing a business plan
While you can’t accurately predict everything for your business, there are preventative steps you can take to reduce the number of complications that can arise. For example, familiarize yourself with the business plan process by researching business plans and identifying how others have successfully executed their plans. You can use these plans as a basis, but Cottrell recommends going one step further: talk to small business owners and others with experience.
“The business owner should talk to an accountant, a banker and those who deal with these plans on a day-to-day basis and learn how others have been doing it,” Cottrell said. “They can join startup and investment groups, and talk to and get information from their peers and others who are preparing to start a business. They can seek out capital innovation clubs in their field and gain additional expertise. ”
If you are looking to write a business plan and still don’t feel comfortable writing one, you can always hire a consultant to help you with the process.
“It’s just a time consuming process that cannot be rushed,” Cottrell said. “Millions of dollars can be at stake and in many cases require a high level of expertise which must be learned or performed in conjunction with an experienced business consultant.”
Additional reporting by Brittney Morgan. Some source interviews were conducted for a previous version of this article.