A sound business plan still goes a long way
Every entrepreneur who approaches a financial institution for funding to start a business is guaranteed to come across one question: where is your business plan?
Old-fashioned as it sounds, a business plan is still the most essential document for an entrepreneur to secure funding for a start-up business. I interact with entrepreneurs daily and one of the mistakes I often observe is that most business plans are only prepared as a formality, as opposed to a concrete plan of action.
In most cases, I tend to only get the business case after speaking to the entrepreneur. However, if one is to stand any chance of securing funding, there needs to be a fair balance between their vision and plan of action. The balance doesn’t always come naturally, so in order to attain it, the entrepreneur needs to consider the following key areas:
Clear vision
• If you can’t visualise where you want to be, there’s not much of a chance that you’ll get there. Therefore, your vision needs to be clear in your business plan.
Market Insight
• A business idea could be great but if you don’t have a market, you simply can’t grow your business or even generate profit. Invest time in understanding the market size and the scope of growth even before drafting your business plan.
Ability to cope with change
• Nowadays, market stability can never be guaranteed because global activity is significantly becoming interlinked. Therefore, one’s business plan needs to accommodate unforeseen change.
Growth path
• A business may be able to survive but the critical question is how it plans to grow. This needs to be evident because growth sustains the business.
How much do you need and how do you plan to use it?
• Financiers are unlikely to give you a ‘blank cheque’ so you need to demonstrate the financial need(s) and how the funds will be utilised.
Overall, it’s important to always prioritise preparing a sound business plan because it says a lot about you as an entrepreneur, your vision and business acumen. Always remember that a sound business plan has the potential to even open doors for an entrepreneur, because it suggests that you know what you want and you have a plan on how you’ll get there.
