Starting a new business is an exciting and challenging journey. It requires careful planning, a lot of hard work, and a bit of luck. One of the most important steps in starting a new business is creating a solid business plan. A business plan is a document that outlines the business opportunity, identifies the market to be served and provides details about how the business plans to pursue the opportunity. A good plan will also describe the qualifications of the management team, explain the resources that will be needed and forecast financial results over a reasonable time period. In this blog, we will discuss the importance of a business plan for a new entrepreneur.
What is the difference between a business plan and a pitch deck?
A business plan and a pitch deck are both important tools for entrepreneurs who are seeking to start a new business or raise funds for an existing business. However, they serve different purposes and have distinct features:
Purpose: A business plan is a comprehensive document that outlines the strategy, goals, and operations of a business, whereas a pitch deck is a condensed, visual presentation that highlights the most important aspects of a business to potential investors or stakeholders.
Content: A business plan typically includes a detailed description of the business, market analysis, marketing strategy, financial projections, and management structure, among other things. On the other hand, a pitch deck focuses on presenting the key highlights of the business, such as the problem being solved, the solution, market opportunity, business model, traction, team, and financial projections, in a concise and compelling way.
Length: A business plan can be quite lengthy, ranging from 30 to 50 pages or more, depending on the complexity of the business. In contrast, a pitch deck is usually no more than 20 slides, with each slide containing a few bullet points or images.
Delivery: A business plan is typically shared with investors or stakeholders as a written document, whereas a pitch deck is usually presented in person, often accompanied by a verbal pitch from the entrepreneur.
So while both a business plan and a pitch deck are important tools for entrepreneurs, a business plan is a more comprehensive and detailed document, while a pitch deck is a condensed and visual presentation that is meant to provide a quick overview of the business to potential investors or stakeholders. We will discuss pitch decks in a separate blog post so look out for that.
So why prepare a business plan?
- Provides a roadmap
A business plan is like a roadmap for your business. It outlines your goals, strategies, and resources needed to achieve success. With a well-written business plan, you can stay on track and ensure that you are taking the necessary steps to achieve your goals. It can also help you identify potential roadblocks and come up with solutions before they become a problem.
- Helps secure funding
When you are starting a new business, you will need funding to get it off the ground. A well-written business plan can help you secure funding from investors, banks, or other financial institutions. A business plan shows that you have done your research, understand the market, and have a clear plan for success. It can also help you determine how much funding you need and how you will use it.
- Helps with decision making
As a new entrepreneur, you will face many decisions, some of which can have a significant impact on your business. With a well-written business plan, you can make informed decisions based on your goals and strategies. It can also help you identify potential risks and rewards associated with each decision, helping you make the best choice for your business.
- Attracts potential partners
A business plan can also help attract potential partners, such as suppliers, distributors, or other businesses that complement yours. A well-written business plan can show that you have a clear vision for your business and understand the market. It can also show potential partners how they can benefit from working with you.
- Keeps you accountable
A business plan can help keep you accountable for achieving your goals. By setting specific goals and timelines, you can track your progress and adjust your strategies if necessary. It can also help you stay focused on your business and avoid getting sidetracked by distractions or competing priorities.
Key Elements of a Business plan
Now one needs to bare in mind that investors for example, review more than hundreds if not thousands of business plans every year. This means that they have little time to spend figuring out what value your business offers. The same is true for banks or potential partners. Time is money for them.
Thus to improve the success and effectiveness of your business plan you will need to grab the readers attention and make sure you keep it! How do you do this? Prepare a well structured, well organized business plan that addresses all the readers concerns but does it in a short but punchy manner. You need to show the work in your plan. Demonstrate your professionalism and expertise.
Example of contents in a business plan
- Executive Summary
- The opportunity or need that your business has identified
- Details of the business, its offering and how the business strategy will allow it to take advantage of the opportunity or meet the need
- Information around you and the team running the business
- Operational plan
- Marketing plan
- Financial plan and forecasts
Appendix:
- Additional information around market/industry research to support your business case
- Support research on size of market to be served
- Team members resumes
The above is just an example and can be tailored to what you need and is appropriate for your business. Look out for a new blog post where we will go through and discuss each main element of the business plan in detail.
In conclusion, a business plan is an essential tool for any new entrepreneur. It provides a roadmap, helps secure funding, assists with decision making, attracts potential partners, and keeps you accountable. By taking the time to create a well-written business plan, you can increase your chances of success and achieve your goals.
Business Plan tips:
- Select a format which you feel makes sense for who you are presenting to, to your business, your industry and your personality as an entrepreneur. Be authentic to yourself
- Obtaining funding or investors is only one reason for compiling a business plan. But a well written business plan has a lot more importance from presenting to key supplier or potential partners, banks or even just helping you as the business owner and management think through all key elements of the business and set clear strategies and goals.
- Pay attention to the style. Use as few words as necessary in order to get your point across. Short but punchy!
- Try make the document easy to read… Even go as far as trying to make the plan easy to skim through. Can achieve this by making use of numbered lists, well structured headings and sub headings and use of graphs.
If you don’t want to prepare your own business plan and would like to look at paying professionals to create you a professional business plan then have a look at the below providers that offer unique customizable business templates for a fee:
My SME (Business Plan Pro)
Entry Level Business Plan – Business Plan Pro®
Funding Connection
Business Plans, Capital Raising, Financial Forecast, Company Profile Funding Connection
Business Plan Consulting
Bplans Africa