Recently, David Mielach, a staff writer for BusinessNewsDaily.com, compiled responses from experts on this key point: What questions should every business plan answer?
Six Questions Your Business Plan Should Answer
What’s the competitive advantage?
In looking at a business plan, Scott Locke, chair of the intellectual property development at Dorf and Nelson LLP, wants to know what gives the business “a competitive advantage relative to businesses that want to offer the same or similar good and services.” In addition to an assessment of the competitive landscape, a strong business plan should also determine if there are any intellectual properties (patents, trademarks, copyrights, trade secrets) that might be “barriers to entry by competitors.”
Is it a growing company in a growth market?
According to Walter Recher, CEO of SmallBall Marketing, an effective business plan should describe “how the entrepreneurs will enter the market, apply their investment to prepare them to grow quickly, and participate in the expansion of an industry … with a better-than-average growth trajectory.” In Recher’s experience, this single factor is the common denominator among both small businesses and hyper-growth companies.
How will you get customers to pay for your product?
Andi Gray, CEO of Strategy Leaders, asks entrepreneurs this simple question: “How do you plan to feed and clothe yourself, and where do you plan to sleep while you’re getting this venture off the ground?” In other words, the business plan should articulate a strategy for getting customers “to engage at a fee and quantity” that enables the owners to sustain themselves as well as their business.
What’s the plan for staffing the business?
Every plan should include provisions for staffing the “production, sales and finance parts of the business,” says Larry Holfelder, CEO of Connect My Advisors. “Roles should be established for the entity as if it were mature and successful.” Holfelder suggests assigning multiple roles at first and, as the business grows, filling those roles with the right people. Including this information in the business plan shows that entrepreneurs recognize they can’t do everything themselves “and that business success revolves around collaboration and management.”
Is the product genuinely innovative?
“Innovative” can have many different meanings, but to Irwin Glenn, Managing Director of Profit Velocity, it means “a new twist on an already-existing technology or services delivered in a new and compelling way.” A well-designed business plan must determine if the innovative idea can be protected against competition, and if the team can assemble “an excellent group that can’t be stopped from succeeding.”
How realistic are the plans and goals?
For Charles North, president and CEO of the Dutchess County Regional Chamber of Commerce, a business plan must be realistic, “not something that is pie in the sky.” This doesn’t mean the idea must be reasonable, but the plan must be. Assumptions covering sales, expenses, and the bottom line also “have to be reasonable.”
The more questions your business plan answers, the greater interest you’ll generate among likely investors.
What questions does your business plan answer?