5 Business Plan Commandments
Posted on June 16th, 2008 | by Nick Grinberg |Fuzzy goals and milestones
Would you want a blind surgeon to operate on you? Well - having a business plan without clearly defined goals and milestones is the equivalent of this. How will you or your investors know if your thriving or dying if your goals are not defined and measurable?
What are your customer/client acquisition goals? What kind of traffic do you want hitting your website after 6 months? Do you want a llama as your company mascot?
Be as specific as possible with your goals. Specificity brings clarity…and clarity will prevent you getting lost in a maelstrom of confusion.
Market Analysis ay? No worries-Got it on Google!
How big is the market potential for your business? Do yourself a favour and pick reliable and credible data to measure this. A random website telling you that “60% of the Australian Population Drink Toilet Water” is most likely not a good source for market predictions.
A market analysis is VERY IMPORTANT. Your investors wont look twice at your business plan if they see generic, un-inspired statistics that show them that you whipped up this section after an hour on Google.
Explain the rationale behind the data you have used. Highlight ALL assumptions you have made and define them separately to the facts. Tie your assumptions to facts to leverage them!
Implementation Strategy…?
How are you going to do what you plan to do? All to many people get caught up in the theory, colourful description and hoopla of their business model at the expense of some meaty implementation strategy.
Your financial projections aren’t worth the paper they are printed on if you cannot show your investors HOW you will achieve them.
The “I have no competition” statement
We have no competition. Oh…yes. If your intention is to get your business plan laughed at and then torched then please…include this.
Believe me…YOU HAVE COMPETITION! Even if you have no-one that does what you do (direct competition) - you will no doubt be affecting trade in some industry. Your product/service may eliminate a need for another product/service in another industry.
Not recognizing Risks or Barriers to Entry
Your credibility will be demolished if an investor picks up on a potential risk to your business model that was not mentioned in the plan.
Any sensible investor realises there is always some degree of risk - so not mentioning any potential threats in your plan can make it look unrealistic.
Mention the most pertinent risks/barriers and emphasize that you understand they are there - and your plans for combating them.
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