Prof. Dr. Liora Katzenstein, Founder and President, ISEMI, Israel.
A business plan is the model on which you base the establishment of your business. It must provide answers to material questions relating to the business design, such as the structure of the marketing plan (how will you promote and advertise the company?), the financial plan (how will you make money?) and so on. Since the business plan must above all simplify the essence of the business, we at ISEMI believe that it must be written first and foremost by the entrepreneur himself. Can the entrepreneur write a business plan? There is a great deal of uncertainty among entrepreneurs over the question of who should write the business plan: should it be the entrepreneur himself or does it require qualified professionals, such as lawyers or accountants? Some go even further and believe that the entrepreneur should hire a “professional business plan writer”. In this article we shall see how you too can become “professional business plan writers” for your own venture.
The first rule to remember is that although you are writing the business plan first and foremost as a working tool, you must tailor it to your target audience – whether it is a financial investor, strategic partner or even key employees. Therefore, you must check carefully who is going to read your plan, what interests him, and above all, what is he looking for. Tailor your emphases and the level of detail (quarterly, annual, long term) to this reader, and in that way you can succeed. Obviously we are not recommending that you write different business plans for different readers, but tailor them for a defined target audience.
The second and no less important rule is to remember what the business plan must include. A common mistake is to focus on the technology and the product, instead of on the target audience, the market, the competition and future profits. A good business plan focuses on the marketing side, from which the financial data are derived. Consultants and writers of business plans can help you to find the marketing data that will help you give numerical answers to questions such as: when should the business buy equipment/raw materials? When should the business pay for these purchases? How much time should pass until the customer pays for the product or service? What investment is needed to create a shekel of sales? Note that most if not all these questions are not concerned in the slightest with the product or service, but with the business/financial aspect! This is what you should remember: Investors are looking for businesses that know how to sell at high prices, collect in advance and obtain long supplier credit. However, of course the plan must explain the benefits of the product, but not from the technological angle, but as user benefits.
Content of the business plan: the plan includes a description of the product or service, how it is made, human resources in the business, method of financing etc., but above all it focuses on an analysis of the competitive advantage – the unique selling point (USP) of the product or service from the customer’s point of view (why in fact should they buy your product/service?).
A good business plan should consist of 20-50 pages describing the uniqueness of the proposed business, and its expected profits. Of course there can be numerous attachments, which should usually be in a separate booklet. These attachments generally include information such as: resumes, contracts of various kinds, market research etc. The plan should convey to the reader a message about the company’s uniqueness in terms of its product or service, its strengths and how it intends to deal with the competitive markets it must operate in.
The benefits to the entrepreneur in writing his own business plan, lies in the fact that doing it this way will help him succeed, because it forces him to crystallize his ideas in an orderly, systematic way. It is important to understand that a good business plan is a working plan in every way, and it must help us to deal with the problems that may arise in the future. From our experience, entrepreneurs who have written their own business plans make a completely different impression on investors with their self confidence and mastery of the material, compared to those who receive a bound booklet from a “professional business plan writer”. Since the investment is always in the entrepreneur and not in the venture, the importance of being in command of the business plan and all its components is obvious.
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