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Business Plan FAQ's

What are the key elements of a fundable business plan?
Since the business plan is the backbone of your venture; and the necessary first step for controlling your business and securing funding, there are seven key elements that your business plan must cover:

  1. An accurate representation of your company's advantage over competition
  2. Why your concept will deliver a strong financial return
  3. A profitable market exists for your product or service
  4. Details on how your company will reach that market and gain market share against established competition
  5. Project unbiased sales and financial forecasting for a clear picture of revenue potential
  6. Defines and integrates the Operations and Marketing strategies
  7. Serves as a practical road map for your company's success and future growth.
  8. An accurate representation of your company's advantage over competition
  9. Why your concept will deliver a strong financial return
  10. A profitable market exists for your product or service
  11. Details on how your company will reach that market and gain market share against established competition
  12. Project unbiased sales and financial forecasting for a clear picture of revenue potential
  13. Defines and integrates the Operations and Marketing strategies
  14. Serves as a practical road map for your company's success and future growth.

The resulting business plan will function as an effective tool for presenting your business idea to specific audiences, identify your unique position and tell your story unlike any other business plan.

What are the contents of a business plan?

Your Identity and Personnel - What is your company, and who are the key players?

Your physical plant - This is a description of your business location, your rent/mortgage expenses, plus your maintenance and insurance costs.

Your Business? - What exactly do you do? You need to examine each of your products and/or services in terms of percentage of you business and opportunities for growth. You should formulate company milestones, including upcoming products and services in development. Describe your current product or service and what makes it unique and competitive

Your Marketing Strategy - This section examines market conditions - the nature of your customers, as well as your competitors, sales potential, and what promotional steps you plan to take to develop your business.

Your Bottom Line - This is a financial analysis - a listing of information for prior years, and projections for your future. By identifying the strengths and weaknesses of your company, certain patterns begin to emerge. Perhaps this is where you can identify new opportunities for growth or areas where you can affect savings - changes that will make your company more efficient. You can predict upcoming problems or prevent them. In other words, the perspective gained through your Business Plan can make a significant contribution to your company's success, and help you get the funding you require. In fact, most lending institutions and private investors will not even talk to you without a Business Plan.

Raising Capital - Look at the loan officer or venture capital investor as someone who would write you the check you need if only he or she could see beyond your balance sheet. The investor's mind is open and needs to be filled with a generous amount of knowledge about what really makes your company tick, and how they are going to get paid back (exit/payback strategy).

How is a business plan broken down?
You need a strong business plan that can be broken down in three different categories; past, present and future.

Past

Present

Future

• You will gain an enormous amount of insight from researching and analyzing the overall market which will help you to prepare your overview for your business plan.

• You need to take an honest and objective look into your financial history. This will force you to analyze your own financial picture.

• By writing the plan and outlining each area of your business, you will see for yourself if your idea is a viable one.

• When you have prepared the plan, you have just created a valuable business instrument that you will use to examine your day-to-day progress and to formulate any future contingency plans if necessary.

• Lenders and investors will want to know how the business will operate as well as how their money will be spent before investing as well as possibly provide additional funding in the future for your idea or business.

• Supports you in forecasting your short and long-term realistic milestones for your business as well as your investors.

• Can attract top-level talent into your business whether it be potential partners, employees or investors

What are business plans used for?
Business plans can help perform a number of tasks for those who write and read them. They're used by investment-seeking entrepreneurs to convey their vision to potential investors. They may also be used by firms that are trying to attract key employees, prospect for new business, deal with suppliers or simply to understand how to manage their companies better.

How can a Business Plan help?
Your business plan is a sales tool for your financial backers and to yourself. First, to investors, the business plan is most often thought of as a means of generating start-up funding from investors. Each segment in the plan is researched and written in an approach that sells investors on your goals and specific business strategies. Secondly, in the process of researching and writing a business plan, you will make the most important sale of all, and that is selling the business idea to yourself. By taking an objective look at the data you have investigated, you may determine that you cannot possibly make this business work. Alternatively, you may not only sell yourself on the idea, but also recognize that with some modifications, the business may have greater potential than originally expected.

How long should a business plan be?
Most business plans are between 25-50 pages. This is sufficient to address all the key issues that investors are looking for. The longer the plan, the more cumbersome and distracting it is to read and many potential investors may not feel compelled to read through a very large document. The larger the document, the easier it becomes for the reader to be alienated and be forced to skim through the document. The key point is not the length of the document, but the precision of the arguments in the plan. Your business plan should make an argument to the reader about your business prospect to succeed and why you deserve to be funded. You must demonstrate to the reader that you have put in considerable thought into the business undertaking by showing all the wonderful things that the business will do for your customers. Your arguments should show that you have investigated your market thoroughly and understand your competitors and more importantly, what the differences if any mean to your targeted customers. It is important that your presentation and writing style be as professional as possible. If you decide to use graphs and charts make sure that the graphics help to tell the story of your business and are easily understood.

What important factors should I keep in mind when preparing my business plan?
You only have one chance to make a first impression to those readers of your business plan and grab their attention. Your plan needs to have immediate visual attraction and an organized, well-developed scheme in which you portray your business idea. Above all, your readers will be focused on its' content and any errors, inaccuracies or inconsistencies, however minor or irrelevant, will instill distrust and project a negative preconception which may lead to dropping your business plan entirely.

Why should I use The IRA Network, LLC instead of another company or software package?
We have over 25 years experience in writing professional business plans. What we are offering versus our competition are not generic, boiler-plate templates that are used for every business by using a merge function, but individual plans created for the specific business at hand and are fully developed and investor ready.

Business plan software can very often be challenging due to the fact that you still have to research the information as well as write the business plan from scratch. Most business plans written from Business Planning Software are not accepted by funding entities due to the fact that they lack originality and are not well-developed.

What is included in each business plan?
All business plans include an Executive Summary, Company Analysis, Market Analysis, Income Statement, Balance Sheet, Cash Flow and Break-Even Analysis.

Are there any common mistakes to avoid ensuring that my business does not fail?
There may be many factors to why businesses fail, but here are some reasons for business failure:

• Unrealistic planning and cost overruns - by projecting your sales too high and your expenses too low or you estimated lower operating expenses and therefore, you run out of money. Be honest, objective and think thoroughly what you're projecting, because they will become the standard in which your business will ultimately succeed or fail.

• Non-detailed marketing plan - plan your marketing dollars wisely. There are many ways to try and compete and promote your business, but be sure you are targeting the right customers. Research and identify your key strategies. Some advertising costs are expensive and do not produce a valuable return on your investment, be sure you take the time to know your audience and the persuasion involved in gaining and maintaining them as a customer.