Become investor ready?
When setting up a business, creating a business plan is an essential step. Writing a business plan takes a lot of time and is not an easy job, but it is going to help you start and grow your business. In this blog, we will explain to you how to create a business plan.
Why do you need to make a business plan?
Making a business plan is indispensable for several reasons. Very simply put, a business plan is a kind of roadmap. You describe what goals you want to achieve with your business and how you will achieve those goals. Among other things, you tell about the organization, your ideal team composition, your product, the market and market potential, the revenue model, your marketing and financial projections. All the things that may already be very obvious to you, you write down in your business plan. You can describe this at length, or keep it short and sweet. The plan, also called a business plan, is like preparing a working document. The business plan grows with your business and you can create it over a longer period of time.
3 reasons why creating a business plan is necessary
There are several benefits to writing a business plan. Here are 3 key benefits listed below.
- Writing a business plan provides focus.
By always falling back on the goals you've chosen and written out in the business plan, you can check that you're still doing the right things. It's also a perfect document to show your staff what you have in mind.
- It's necessary to get your funding in place.
To grow, you usually need investors. You need to convince others to invest in your business. They will only put money and time into your business if you give them confidence that your business is going to be successful and profitable. Writing a business plan gives insight into your vision and what you expect in terms of profits and income streams.
- You'll keep a grip on your liquidity.
An important part of the business plan is the liquidity forecast. This is where you write down your expected income and expenses for the next 36 months. This is a perfect tool to keep an eye on whether things are going well or if you need to make adjustments.
Making a business plan: this should not be missed
Are you going to write a business plan? Then remember that an incomplete business plan is as good as worthless. Therefore, make sure you at least consider the following questions:
- Are all competencies present in your team?
- What is the customer need and how does my product address it?
- What is the market you will serve and what is the potential?
- Who are your competitors and where do you stand out?
- How are you going to generate revenue?
- How will you approach potential customers?
- How is the connection to the market? Is there success?
- Who does what, when and at what cost?
Finally, you look at the finances. Liquidity projections, profit and loss statements and balance sheet projections for the next three years are important if you are going to make a business plan.
Examples of pitfalls
When you start creating a business plan, it is important to take a number of things into account. For example, don't be too optimistic, because you are going to face setbacks, for example, financial setbacks. You can't grow upward in a straight line, unfortunately, so it's important to always have a buffer behind you.
In addition, it is important not to underestimate your competition. Be realistic about your competitors, as this will strengthen the credibility of your business plan. Furthermore, it is important that there is a good link between the different chapters in the business plan. For example, if you describe in the first chapter that you are going to expand the organization, this should be reflected in the financial projections. Or if you say that you are going to invest in the development of your product, but there is nothing about this in the chapter on finances, then you are missing the point. A useful tool for writing out your business plan is the example of the Business Model Canvas.
Need advice on your startup?
We can help you in several ways. For example, you can sign up for the NOM Startup Program, the Investor Readiness Program or download the white paper ' Becoming Investor Ready' . Do you have any questions? Then contact Niels Palmers, Business Developer at T. +31 617 425 205 or E. palmers@nom.nl.