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Business Plans Need to Incorporate Best Practices

In a sense, ‘best practices’ is a euphemism for business plans. Developing business plans is critical to success because it is focused on what makes a business successful. The term best practices is tossed about quite a bit, but what does it specifically mean for a business plan?

The business plan best practices means building a convincing case that your company is an excellent proposition that efficiently and effectively serves the market by providing products and services that the market will embrace. The primary way the business case is built is by differentiating the business in some manner. The business plan must leave no doubt as to why the company is selling particular items and how those items will appeal to the target market.

Forward Thinking

To determine the best practices for marketing, the competition must be thoroughly analyzed. The analysis is not just a case of listing competitors selling similar products or services. The competition must be assessed as to what it is doing now to succeed and how it plans on succeeding in the future. In other words, best practices are forward thinking, and the plan preparer does not get mired down by focusing only on the past. In addition, businesses that can easily become competitors need to be considered also.

A best practice in business plan development is to develop a thorough understanding of competitor specifics. Exactly what sets your competitors apart? Each company has something unique about its products, marketing strategies, management, customer service practices, or product and service delivery. You need to understand these differences in detail to position your company correctly.

It can be fatal to underestimate the competition as many businesses have learned. Even seasoned companies like RIM and Blockbuster found themselves struggling to survive because they failed to understand what the competition was offering the niche market. Your goal in the business plan is prove the competition is not addressing a problem you are able to solve, and then develop a strategic marketing plan to implement your particular solution.

Honesty Counts

In addition, best practices in business plans dictates establishing realistic financial goals. A new business will need to make a profit with a couple of years in most cases in order to remain viable. Projecting unreasonable sales or underestimating expenses will be detected by experienced angel investors, banks, venture capitalists and equity funders. There must be evidence or documentation that the business plan marketing and financial goals make sense based on industry performance. You can project sales and expenses for brand new products and services, but they still need to be based on market research.

There are many other best practices that include developing a flexible business plan and analyzing best case/worst case scenarios. Ultimately, the business plan is about honesty – honest descriptions, honest research, honest analysis and honest assumptions.

Browse www.funded.com for more advice about getting your business funded.

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Business Plans and Benchmarking

Benchmarking can be an important concept in business plans. Benchmarking comparisons can be used to compare your business goals to the domestic or foreign competition. The comparisons can show how your business idea is viable in comparison to other successful businesses. The benchmarking can make your business plan more credible and prove that you have identified the best practices for marketing products and services.

The benchmarking process has one ultimate goal which is to evaluate your current competitive position. It is a method for taking your focus on the internal business to the external environment. How does your business fit in the industry? Are you competing locally, nationally or internationally? How have other businesses achieved success, and what will you do the same or differently to achieve excellent performance? If performance gaps are apparent between your business and the competition, what are the plans to close the gap? How will you measure success?

There are different ways to perform benchmarking analysis. You can review the marketing strategies other companies have used to succeed, compare products or services, complete a functional analysis to identify where you are innovative, and so on. In reality, you can benchmark in any way that makes sense for your particular business in terms of market performance.  Business success requires serving a niche market more efficiently and innovatively than the competition. If you don’t understand how successful competitors have performed, then you have no comparative information for competitive assessment.

Benchmarking is an important step in business plans. Before starting the analysis, the first step is to identify the most logical type of benchmarking. From that point on, it’s a matter of research and then identifying the best practices that suit your business.

More detailed information and useful advice can be found at www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.

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Spin Out with a Business Plan

Business plans are a bit like tornados. There is a core that is tightly woven and concentrated and from that core there are a number of spin-offs even as the tornado keeps moving. An effective business plan is always concentrated on the ultimate mission, in constant motion, and ready to spin-off whatever is needed for a long-term successful business.

The power of tornadoes has been witnessed by thousands of folks over the last couple of years. They can wreak incredible damage if anyone or anything in its path is not prepared. The business plan can be a powerful tool for business success but can also cause a lot of damage if it is never amended to take into account what blocks its path. For example, a new competitor enters the marketplace and your business fails to respond because it’s not in the business plan.

High quality business plans are never really completed because they need to keep moving with the market, the customers, the competitors and the economy. One of the reasons so many companies failed during the Great Recession was due to inertia. They insisted on doing business according to the business plan that was not updated to accommodate the new economic conditions. There are also thousands of business that have failed or are failing because they did not respond to changing consumer buyer habits.

Right now there is national big box company relying on showroom floors that is struggling to survive in a market where customers have changed from buying computers and equipment locally to buying online. If the company had stay tuned to the marketplace, and revisited and adapted its business plan, there is a good chance that management would have developed alternative selling strategies that improved its competitive position.

The business plan is the core plan and from it you need to spin out changes, market responses, new opportunities and so on. The core of the business plan does not change from its inception, but the details will change with the competitive environment. The business plan should not be like a tornado wreaking savage damage because it refuses to change course. The path should always be well-defined and obstacles removed through strategic planning.

Browse www.funded.com for more advice about getting your business funded.

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Polishing Business Plans

Developing business plans takes time, effort and patience. It is a plan for success, no matter how you define success. The business plan can be used to find funding for a start-up or expansion, or to guide an existing business. Some people think the business plan is only needed when searching for financing, but that is faulty thinking. The business plan forces business owners and managers to define goals and then make plans to meet them within a set of circumstances that include competition.

Following are some tips for refining your business plan. The business plan template is the best guide available to ensure that all elements are completed. These tips will simply add a bit of polish to the plan.

 

  1. Do the Executive Summary last and not first. The summary needs to concisely state the nature of your business. The best way to ensure the important information is included despite the brevity of the summary is to develop the plan details first. In that way, the Executive Summary is much easier to develop.
  2. Market strategies are more than just numbers and some statements defining the market. It should also define what makes your selling proposition different from that of your competitors.  What does your business bring to the marketplace that is different in terms of products or services, customer services, selling approach and so on? A polished business plan emphasizes uniqueness.
  3. In the competitive analysis, don’t simply describe the competition. You need to explain the distinct advantage your business has over the competition. Once again, the polished business plan makes differences and not sameness clear.
  4. In the operations plan, don’t forget to discuss the benefits that your business will bring to the community. This has become especially important in light of the current economic condition. Will your business opportunity create new jobs or support economic growth?

 

In the final analysis, polishing business plans means adding the information that turns a paper business into a real business for the readers.

More detailed information and useful advice can be found at www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.

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When Opportunity Knocks, the Business Plan Can Answer

Business plans can be viewed in a lot of ways, but in some cases they represent a plan to answer an opportunity. A business opportunity is basically a packaged business that you can start but is not necessarily a franchise. Unlike a franchise, a packaged business is fully controlled by you, and the seller has no say in how you operate your business. Once the business sale is completed, the buyer is on his or her own. The business purchase includes buying equipment or specialized materials and then establishing whatever type of operations you want.

When a business opportunity comes along, it is important to thoroughly evaluate it, of course. There are unfortunately a lot of scam artists who promise big returns if you will only make the initial investment. A good example is a cabinet company that promised business owners enormous returns for redoing cabinet faces. An investment basically bought you a manual and a half day of training. That may be enough for some people, but for others it was a plan for failure. The company was taking advantage of people desperate to get a side business started.

Review From All Angles

The business plan template can be used to ensure you evaluate the business opportunity from every angle. Naturally, you want to ensure the business is legitimate, follows state laws and regulations, and can support its claims with a list of others who have bought the opportunity. If it passes the first review, then use the business plan template as a guide for further evaluation.

For example, in the market strategies section you would be guided towards doing research on the niche market the business opportunity would target, the type of strategies that would be most successful, and the competition. The template can help you make sure that you consider all the important business factors before investing.

Evaluating a business opportunity after it has been purchased is not a good idea. The evaluation needs to be thorough before the opportunity is purchased. The business plan template is the best guide you can use.

Browse www.funded.com for more advice about getting your business funded.

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Planning for Change in Business Plans

Business plans are not etched in stone; yet that is exactly how some businesses treat them. The business plans are written and then put into a proverbial drawer where they never see the light of day. One day the plan is dusted off, updated for the Board of Directors, and then put back into the drawer. This does not make sense after so much time and effort has been put into developing a plan that is supposed to establish a clear path to success.

Viable businesses never stand still. They are movers and shakers as they interact with customers, develop new products and services, and adapt to good and poor economies. When major changes happen that affect your business, it is like a time warp because everything changes from that point forward. Change is always imminent today and largely because of technology. Businesses can enter the marketplace faster and roll out a marketing program quickly on the internet.

The business plan can quickly become an anachronism if it does not plan for change. This doesn’t mean doing multiple business plans addressing all the what-if scenarios. However, change should be built in to the business plan process. First you develop a business plan based on the most sensible goals using current knowledge and expectations for the future. You can include a decision tree analysis section, if desired. However, you plan to change by simply doing an honest and regular review of the developed business plan.

It is important to have the same groups involved in the original plan development also participate in review sessions. The business plan may need to be revised, but you have identified where and how which is good strategic management.

The real issue is whether management can develop the discipline needed to make sure the business plan is regularly reviewed. Developing business plans should not merely be an academic exercise. It needs to be an important management function.

Browse www.funded.com for more advice about getting your business funded.

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Showcase Diversity In Your Business

Some investors aren’t just interested in your business ideas. They also want to know that you embrace diversity. A business can have diverse employees or focus on supplier diversity, or encompass both in the business model. As globalization becomes standard practice for all businesses from the large corporation to the sole proprietor working at home, diversity of people and spend becomes more important.

Why do investors care? They care because the makeup of the population and the marketplace are changing. In the U.S. alone, the highest birth rates are among minorities and every state has increased in racial and ethnic diversity since the year 2000. However, the U.S. is just one segment of the total global marketplace, albeit the largest single entity. As businesses go online to find rapid business growth, they must attract a diverse customer base. It only makes sense that the business would add diversity to its internal operations in order to better compete.

When investors are considering funding a business, they want as much assurance as possible that the internal culture, systems and processes mesh well with the reality of the marketplace. An organization that is committed to diversity and has a definitive strategy for ensuring diversity becomes a reality is one that proves it fully understands the complexity of the global marketplace. In other words, diversity can be leveraged into enduring success, and that is what investors want to fund – a business that is on the path to lasting operational success.

Before approaching investors, it’s important to analyze the diversity of your organization. Awareness, alignment and sustainability of diversity in employees and suppliers are concepts that should be put into practice.

Browse http://www.funded.com for more advice about getting your business funded.

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Business Plan Show-and-Tell

Potential investors review business plans regularly. It can be tempting to think of the business plan as a tell-all document that describes current status and future plans. However, the business plan is more than a description of goals, strategies and financial projections. It’s a document should bring your business sharply into focus and add credibility to your ideas and claims of potential success. The plan must present your business to its best advantage which means adding your personal style.

In other words, the business plan is not just a “tell” document. It’s a show-and-tell document. The business plan will tell the reader about an invention, but must show how it will be turned into a profitable product or service. You can tell investors about the management team, but must show how specific capabilities and talents make the business leaders uniquely qualified. You can tell funders how much money you need, but you must show how those profits will be generated. In every section, you want to avoid simply telling investors about plans and show them with specifics how you intend on making the ideas come to life in the marketplace and why you are able to make it happen.

Another way to view the business plan is that it must clearly answer questions about uniqueness. How is the idea unique? How will the marketplace judge its uniqueness? What makes the specific product or service unique compared to those sold by competitors? The traditional sections of the business plan are always included – marketing plan, financial projections, competition and so on. But don’t forget to add the “show” to the “tell” because without it your plan will be missing the focus needed to attract investors.

Business plans are serious documents but that doesn’t mean they should be lifeless. Bring your business into sharp focus and that makes it possible for investors to imagine success.

More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.

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What are Sophisticated Investors?

When you’re searching for business capital, you want investors who can be classified as sophisticated. A sophisticated investor is someone who has the business knowledge and experience to make good decisions about investment opportunities. The knowledge and experience enables the investor to thoroughly weigh the merits and risks of a business plan and make a reasonable decision about potential profitability and thus the likelihood of earning a return on the investment.

There are other ways the term sophisticated investors is used. For example, according to the Securities and Exchange Commission, the term applies to someone able to make certain restricted investments in exempt offerings. Small companies can sell securities to these investors without registering them. The investor can buy securities without having to worry that an investment loss will impact their net worth to any degree. However, for entrepreneurs seeking small to large private investors, a sophisticated investor is someone who has hands-on experience with start-ups or business expansions and can offer expertise as well as money

All types of investors can quality as sophisticated in its broad sense. The fact is that being wealthy doesn’t automatically mean being financially experienced. There are plenty of wealthy people who have inherited money, were paid an insurance settlement, or even got lucky on an investment, yet have no idea how to manage money. The true sophisticated investor is the angel investor, venture capitalist or equity partner that has the financial savvy to make a sound investment decision after studying the business proposal in detail including the marketing plan, financial information and success strategies. The sophisticated investor understands what he or she is investing in and that’s precisely why you will benefit from their expertise.

Browse http://www.funded.com for more advice about getting your business funded.

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Traversing the Entrepreneur’s Valley of Death with a Business Plan

The business plan is a bridge that extends from initial startup to plans for long range success. That bridge crosses a wide canyon that includes seed money, angel investors and eventually venture capitalism and commercial funds. The first round of funding by angel investors is enough to get the business established and generating income through modest growth, but at some point for successful businesses the funding chasm becomes wide and deep. This Valley of Death, as the $2 million to $5 million is not so affectionately called,  can kill young businesses if it’s not traversed with injections of new venture capital investment money. On the other side of the valley can be found business loans from traditional lenders meaning the company is now poised for unlimited growth.

There’s a lot of debate on whether this valley really exists. Many business analysts believe there is always money for market worthy companies that need cash. This is based on the assumption that inefficient companies or companies with products that don’t succeed in the marketplace will drop out of the running for funding. That leaves the companies with competitive products and services looking for funding. Angel investors play an important role in this process because they fund companies with the well designed business models and that are most likely to succeed over the long run based on their analysis. The poorly prepared business plan and angel investors act like culling tools and force bad ideas out of the funding process early in the process.

Crossing the Valley of Death will take a concerted effort to find multiple sources of funding in many cases. For example, young entrepreneurs can bridge the gap by vigorously blending venture capital with government tax credits. A fairly new concept is the ‘certified capital company’ in which a state issues tax credits to companies in return for making investments in young businesses ready to cross the Valley of Death. There are a number of new and creative funding concepts being introduced across the nation to stimulate job growth and economic development.

In other words, if you need angel funding or are facing the Valley of Death, rest assured that professionals familiar with the funding environment can steer you to funding arrangements you may not even be aware exist. If you see the Valley of Death looming, it only means you have been successful already.

More detailed information and useful advice can be found at www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.