Monday, April 9, 2012

How to Prepare a Winning Business Plan

business planbusiness plan (Photo credit: Wikipedia)
By Christine Richardson

A business plan is based not on an idea, but on hard data. This may come as a slap in the face to some entrepreneurs, who are known for their ideas and creativity. Yet as jacks-of-all-trades, entrepreneurs are also adept at finding the necessary research to support their ideas and prove to investors that their ideas are worth banking on.

Three major elements make up the foundation on which your entire business plan is built.

1. Market Research

The first consideration for new investors is how much growth they can expect if they decide to fund you. When preparing your business plan, you must ensure that the growth potential for the good or service you wish to provide is very evident. The research contained in the plan should be able to demonstrate that the need for your product or service is very much there in the market and that it will translate into sales.

When laying out the evidence of your research in the business plan, you can use resources such as government and trade reports, online, newspaper and magazine articles, books, customer surveys and interviews. Ensure the sources you choose from are well recognized to add credibility to your plan.

2. Effective Organizational Leadership

In some cases, the investor decision is most influenced by the management of the firm. Their impression of these individuals and their qualifications may be what counts the most.

The business plan should clearly bring out the excellent credentials of each member of the management team. Whether it is their academic proficiency, years of experience or industry awards for excellence, it should be evident that the team is best placed to lead the company into a successful future.

3. Viable Exit Plan

Ensure that the business plan allows for an exit strategy should your investors want to pull out. They could include going public with an IPO or having another investor or firm buyout the initial investors' interest.

Do not be perfunctory in providing the evidence that will support your predictions. Your research should clearly show the parallels between your company and others that have had to undergo similar situations. Present your findings with hard facts to back it up.

Ensure the research into the kinds of companies that are likely to consider a merger proves that the same considerations they use to make such decisions would apply in your scenario.

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