A business plan is critical for your business. And, you shouldn’t write it only because someone had told you to do it. A business plan is one of the most powerful tools to set the road map for your business’ proper start and further development in the future.

A business plan is also needed when you are looking to raise funds to finance your business. It is your initial selling document when dealing with financial companies or investors. Based on your business plan, venture capital firms, banks or individual investors decide whether they want to back up your business or not.

In terms of an investment, venture capitalists will be seeking information that will ensure them of its success before committing any money. Therefore, make sure that your plan is of the highest standard and all information included in it is verifiable and realistic.

Remember that investors are mostly interested in your business’ growth, as their return on investment depends on it. Unlike with any loans, investments are not repaid and investors only make money if your business succeeds and you are able to sell it in the future.

In a case of a bank loan, the bank manager will be looking for information on how likely your business will be able to repay the money. In that case you need to present a solid plan for a steady business’ growth as well as a cash-flow capable of making the repayments.

In other words, your business plan is the first indication to other people that your company can be a success.

• RELATED: How to Write a Business Plan
• RELATED: What is a Business Plan
• RELATED: 8 Tips for Writing a Business Plan 
• RELATED: Different Types of Business Plan
• RELATED: Things You Need to Do Before You Write a Business Plan 

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A good research and preparation is the key to writing a successful business plan. There is a number of things you need to do before you even start writing and in this article you will find out exactly what they are.

• Research Business Plan Sections

Before you begin writing your business plan, you need to research everything that needs to go into a such document. Understand all sections that are required, and most importantly, why are you writing this plan in the first place.

• Work Out the Legal Structure of Your Business

You might be focusing on your great idea for the business, however, when it comes to your business plan, everything that goes behind the closed doors is equally important. Before you commence your plan to paper, make sure that all operational elements of the business are not omitted in any way. These would include the decision on whether you want to incorporate a company, trade as a sole trader or start a partnership with someone.

You may also ask an accountant for help with sorting some this out. Also, you need to know whether you have to register for VAT, your trade mark or name under which you will be trading and draft any employee contracts, if required.

• Know Your Numbers

Contrary to what many people think, business plan is mainly about numbers. In order to write it well, you need to know them and have all that you can worked out. You need to understand your start-up costs, your break even point, what funding you will require and your cash flow forecasts for the coming months.

• Check Out Your Competition

No matter how unique your business might seem to you, there is a chance that someone is already doing something similar. There might be differences but the core of the business could be the same. And, you could use their experience to research the market you want to operate in.

Depending on your industry, you might even find reports detailing the current trends and opportunities in the market place. Many industries, such as tourism, publish them annually and they form a great base for predicting how your market is going to change in the coming year.

• Try to Assess the Level of Demand

Unlike costs, demand is one of the most difficult things to research. It may be hard to predict how the market is going to react to your offering. The golden rule is to use very conservative estimates when assessing the demand. Avoid plucking figures from thin air. Remember, that if you miscalculate the demand, you may end up not pricing your offering accordingly and face your costs and earnings mismatch.

• Research Your Access to the Market

How you are going to access your target customers is equally important. You may decide to use a multi-channel route, however this will naturally increase your costs. On the other hand, a single-channel route will mean a slower start, but cheaper.

You need to decide how you are going to market your offering and what are the costs associated with that.

• Define the Benefits of Your Offering

One of the key aspects not only of your business plan but also your marketing is articulating the benefits of what you are delivering. You need to fully understand what they are before you finalize your business in a form of a business plan.

Develop an elevator pitch, a short introduction of your company to help you formulate what your company stands for and why you are delivering your offering.

• Get Professional to Help You

Lastly, get someone who has a vast experience in business to look at your business for you. This could be a mentor or a business coach, or even a trusted friend with great experience in business. Get them to take your business into pieces and analyze every single detail. Chances are that they will find things you have missed and as a result, will be able to fix them before your business even launches.

More about Business Plan:

• How to Write a Business Plan
• What is a Business Plan 
• 8 Tips for Writing a Business Plan 
• Different Types of Business Plans 

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