I recently wrote an article on plans, projections, and everything in between. However, today I want to stress on the five stages of caution.
Along with understanding how to draft and formulate a business plan, you should also know what to evade in a market plan. Here are some aspects that you need to be cautious about while working on it –
- Never mix fallacy with optimism
It is okay to exaggerate your sales forecasts and undervalue your costs. However, you have to do so within the sphere of reality. Proposing profit margins of 80% in the first year is an absolute delusion. It means that you do not realise how a business works. It most certainly guarantees that no banker would take you seriously. To ensure that your financial projections are taken seriously, stay honest but positive and back up all your numbers.
- Choose a small initial target market:
Do not try to provide a wide variety of products or services in a vast market. You are more prone to get lost – direct your resources towards a small market. Focus your efforts on securing this business first.
- Know your first few target customers:
Communicate clearly how you plan to reach your first few target customers and how you intend to be prosperous in selling your product or service to them.
- Accent your unique selling point:
Highlight in enough places how your products are distinct from those in the market so far. Make ample use of bullet points and short, detailed paragraphs to come out loud and clear.
- Perfect your executive summary:
Work hard on your governing summary. It has to briefly contain everything you need to communicate about your business. Make it official, keep it to the point and make it reasonable. What makes it all the more noteworthy is that this may be the only part of the entire business plan that an investor may read.