Are you preparing a business plan? Best wishes! Whether it’s the first time or you’ve already presented others in the past, it doesn’t change much. Each business plan is a case in itself, each time it is (almost) like the first time.
You will only need 20 minutes to outline the basics of your successful business strategy.
You find yourself with so many topics to write down, as well as having to think about facing market analysis, making forecasts for the future, carrying out cost-benefit analyzes, identifying strengths and weaknesses and presenting everything in the best way.
It is certainly not one of those things that makes you exclaim “Yay, I have to do a business plan, yeah!”
Don’t panic. Take a deep breath and relax.
We are here to give you some tips on how to set up your business plan in a simple and effective way, and develop a winning strategy accordingly.
In most cases, the preparation of a business plan is aimed at requesting loans from banking institutions or private investors. But the ultimate goal of a business plan is not to convince the bank or investors, but to help you define the bases of a concrete and success-oriented business.
The business plan must provide you with the strategy that puts your business in a position to be born, consolidate and develop.
The fact that potential lenders are convinced that investing in you is the right choice at that point will come by itself.
Unfortunately, although traditional business plans can help you develop a strategy, they often have disadvantages.
The classic business plans are long to write, their reading can be heavy and complex and too often once they are written they are no longer updated.
But, let’s say that the fateful moment has come when you have to present a formal business plan to a bank, to investors or to possible partners.
Our advice is to start your planning with a simpler process, which is the classic pitch, which will help you outline your business strategy.
To set up a pitch it takes just 20 minutes. Within half a day you can even set different pitches based on different variations of your business idea or even on different ideas.
The pitch forces you to filter the ideas for your business by getting to the heart of your strategy.
“A good strategy depends on what you are not doing” – Tim Berry
After setting your business strategy, you can define a more substantial business plan, which goes into more detail on your pitch.
11 Key points for a business plan
Your pitch, in essence, is the overview of your business project. Each section must include only a few brief key points, so you should be able to draft the first draft in no more than 20 minutes.
But what are these key points? Here they are …
1. Your identity
What distinguishes your business project from others? What is your goal? For example, the identity of a bicycle shop could be: “Quality products and accessories for everyday life, not just for professionals”. This identity describes the point on which the store is concentrated, i.e. providing quality bicycles and accessories accessible to all. You should be able to describe your identity in one or at most two short sentences.
2. What problem you intend to solve?
How will you help your customers? To answer what their needs will they turn to you? Any business idea is born to respond to a problem. For example, a new restaurant will satisfy the need for a certain type of cuisine or atmosphere currently absent in a given area.
3. The solution you offer
How will you solve the customer’s problem? What is your product or service? Make sure your product / service is aligned with the customer’s needs.
4. Your client
What is your ideal client? Being able to create your buyer personas is a great exercise, but at this stage it may be enough for you to write down some notes to identify your client. Focus on a particular type of client or some specific groups. Thinking of satisfying “everyone” will not get you anywhere.
Who are your competitors, and how will you stand out from them? In what and how can you be better or at least alternative to the options that your potential customers already have available? Remember: indirect competitors are also competitors
6. Sales channels
How will you reach your customers? Will you have a single point of sale? Will you sell online? Will you rely on distributors to get your products to the store shelves?
7. Marketing strategy
How will customers learn about your product / service? Will you attend trade fairs and exhibitions? Will you buy online advertising campaigns?
8. Your team
One of the keys to the success of a business is undoubtedly to be able to count on a well-assorted group of people who know how to transform an idea into reality. Do you have the right people? Try to understand if and which other figures are possibly indispensable to give birth to and develop your business.
9. Your business model
“Business model” may seem like a confused concept, in reality it is nothing but a very cool way to explain how you intend to make money. In the initial phase of developing your business idea, you can simply sketch some key points about how and when you plan to earn revenue and what initial expenses you will have to face. As your idea takes shape, you will turn these notes into sales projections and spending budgets. But for your 20 minute pitch, it is sufficient to draw up a short list of the things you will be dealing with and the expenses that you know for sure you will have to face to open your business.
Ideas remain so if they are not put into practice, and you must transform your idea into a concrete entrepreneurial activity. Use this section of your pitch to list the essential things you need to do to start your business. Do you need to find a venue? Do you need to obtain special authorizations? Do you have to pass a course to get certain qualifications? At each point of this list, if possible, also add an approximate date and mark who should perform the different tasks (e.g. your accountant must register with the Chamber of Commerce, you must obtain a certificate, the agency you addressed must have made your website, etc.)
11. Partners and resources
If you need to work together with other companies or partners to start your business, write down the partners and resources you need. Does your product need to be built or supplied by a third party? Will you need a distributor to place your product?
How to Use Your Pitch
Now that you have the first draft of your pitch – or maybe of different pitches – you have to put it into practice.
First, you can use your pitch to identify the basic assumptions of your business.
In general, these assumptions concern what the famous entrepreneur and investor Marc Andreessen calls Product / Market Fit, which means being in a good market with a product that meets the needs of that market. Which, in turn, means that you have found a group of potential customers who have the problem you propose to solve with your product or service, and who are ready to spend money on the solution you offer.
Your pitch therefore includes all the data on who your client is, what problem he has and what kind of solution you have.
At this point, you have to come out and talk to potential customers to see if they really have that problem and are really ready to spend money on the solution you’re going to offer.
After getting enough feedback from potential customers, you can fine tune your pitch.
And this will be the moment when you will be glad to have started with a pitch instead of a business plan, since a pitch can be easily modified and updated as your business is defined.
So if you don’t have to present a business plan to other people, a good pitch will be all you need.
If instead you have to prepare a formal business plan, the pitch you have created will be useful for creating it and developing it in greater depth.
In the business plan you can add more details about your marketing plan, the specifications of your product or something else, but in fact it will be nothing more than a deepening of each section of your pitch.