When a prospective investor or financier looks at or asks for a business plan there are things they will be looking for. There are particular questions that they will be having in mind. They might not ask the questions directly but they will be there. When drafting a business plan think of it as an endeavor to respond to particular questions. It could be in a direct or indirect manner but it is all about addressing certain fundamental questions. If you know the questions that your business plan should answer you will come up with a comprehensive one.
What Is The Problem Or Challenge?
Entrepreneurship is centered on addressing either individual problems/challenges or societal ones. Ideally we want to know what your business seeks to address. The unquestionable existence of a genuine, widespread problem or challenge is crucial in setting up a business. This is because there will be people willing to pay for a solution that you will proffer.
How Will You Address The Problem Or Challenge?
Now that the problem or challenge has been ascertained what is your proposed solution? This is a fundamental question because it is the solution that will be monetized. If it is not a potent enough solution no one will be willing to pay for it. So anyone would really be interested to know that – it is should be clear in the business plan.
What Is Or Are The Products You Are Offering?
How you will package the solution is what will constitute your product or products. By products we are essentially referring to either goods or services. There should be a coherence that connects the problem, the solution down to the product(s) offered. The existence of a well-structured product or products is evidence of a well-thought out business idea. It is no wonder why there should be a standalone section describing the product(s) on offer.
What Is Your Business Model?
This deals with how the business will make money. What is the point of starting or running a business that cannot make money anyways? A business plan should clearly answer the question of how it will make money. Examples of business models are freemium, subscriptions, direct sales or advertising. This is important because business is all about making money.
What Is Your Target Market?
This is a question that can be answered by looking at quite a number of aspects actually. It generally involves market analysis where market characteristics are explored. It starts from looking at industry trends then narrowing down to market dynamics till you look at your target market. This will also span to market segmentation where you will break down the market by virtue of various metrics. Is there or do you have a market? This is a burning question when people are looking to explore business ideas. Thus in a business plan it should be empirically shown that there is a market for the products on offer.
Who Are Your Competitors?
Some people, in a bid to impress, say that their business idea has no competitors. Some even say that their business idea has no significant competitors. Well, this is never the case; any business has competitors. Normally those who say they do not have competitors would not have done thorough research. Demonstrate that you have researched by explaining who your competitors are. This will also be tied to then answering the question of how you will deal with those competitors. It is not necessarily the issue of the existence of competitors – that does not really matter. What is most important is how you will outdo them.
What Makes You Unique?
A portion of the bible says that there is nothing new under the sun. Any business idea, no matter how novel you think it is, has someone already doing it or has done it before. This also implies there are most likely many businesses already functional in the space you are planning to enter in. This is why we emphasized on competitors earlier on. In light of all this, what makes your business unique? We are referring to your unique selling point or unique value proposition. Any concrete business must have a unique value proposition or selling point. This is what will make it stand out amongst whichever competitors might be there. This all must be adequately covered in the business plan.
What Is Your Marketing And Sales Strategy?
All the preceding sections we have dealt with can all be in order. However, they can mean nothing if it is not clear how you will market your products in a bid to realize sales. Especially considering the cutthroat competition in the business world nowadays questions on this must be answered comprehensively. One of the things here that must be there is digital marketing – particularly the internet and social media. You cannot talk about 21st century entrepreneurship without marketing and realizing sales online or through online platforms. How you will go about all that must be well explained in a business plan.
What Are The Financial Characteristics Of Your Business?
The financials are pertinent in a business plan. It is the one aspect of a business plan upon which decisions can actually be premised on. Depending on whether a business has been operational or it is starting out, there must be valid and comprehensive financial details. Some of the things we discussed earlier such as business model get to be analyzed by looking at financial projections. The financial characteristics will also inform the next part which should be covered in a business – your needs.
What Do You Need?
In principle, business plans are mostly drafted for the purpose seeking financial support. Support can go beyond just finances to include other material or immaterial support that might be needed. When a prospective investor or financier goes through a business plan they will be wondering what the person actually needs. Thus you must lay out in the business plan what your needs are. Where applicable, you can even go ahead to lay out how you will pay back (e.g. in the case of loans).
These are 10 fundamental questions that must be answered by a business plan. You can use this as a guide or checklist in assessing whether or not your business plan is comprehensive.
