The idea of a business plan was a huge talking point in the entrepreneur world for decades. It made sense: you needed to know what you were doing before you started spending money on your business. This was all the more true if you expected the bank or a private lender to fund your business.
However, over the past few years, the term “business plan” has lost its sheen, with many experts suggesting that writing up a business plan doesn’t make sense in 2021. After all, the world today changes at such a fast pace that most businesses need to throw out their original business plan within the first year.
Nonetheless, if you are looking for funding you still need the equivalent of a business plan. Potential investors will want to know how you intend to make money and how you will adapt to changes and setbacks.
To create the perfect business plan for an online startup, take the following steps.
Build a website
In 2021, people take in most of their information from websites. This is no less true for potential investors. While you will need to provide research and stats, your proposal will start at your website.
On your website you should include information about who you are and what you do. You can incorporate simple videos explaining your concept. You can also use your website to demonstrate how you intend on carrying out business, with the template for an online store, contact forms, and many other tools, such as payment solutions and invoice generator. Doing so proves that you are prepared for the nitty gritty of running your business.
This does not mean you should spend tons of cash on building the perfect website. Investors understand that the attention to detail will follow. You don’t need to hire a professional web designer, voice actor, or animator for videos. You don’t even need to write most of the copy for the various pages of the website
Rather, you can use a free website designer, adding your own personal touch. It is the outline that investors need to see. They're not going to read copy that is geared towards future clients.
Compile the research
Promises mean nothing when asking people to shell out money for you. You need to back your promises up with cold, hard data. If you cannot compile relevant research that strongly indicates that your idea will work, your business plan becomes irrelevant.
Investors understand that you cannot predict the future. They may well appreciate the understanding of human nature you've shown in your projections of how and when your business will start earning. But no matter how sound your reasoning is, it’s always possible that you failed to take a factor into account.
Look for papers that validate your reasoning and do your own studies when necessary. Again, these studies don’t need to be nationwide surveys of thousands of people that cost tens of thousands of dollars to carry out. In many cases, a well-run focus group is more than enough. Without the proper research, your business plan is dead in the water.
Pinpoint what you have to offer
Before you put together the perfect business plan for potential investors, take the time to pinpoint what you have to offer. The answer may seem obvious: money in their pockets. But with that approach, you become just one petitioner among thousands.
You need to find the reason certain investors will want to invest in your company in particular. Do they want a company targeting a specific demographic that is lacking in their portfolio? Are they looking to transition from one industry to another?
Do your research on every potential investor and create your business plan accordingly. It should make it clear how you are going to get them what they need, rather than how you plan to achieve your own goals.
Essentially, this means you have two parallel business plans. You have the outline of why you are building a business for yourself, with all the details geared towards reaching that goal. And you have the outline of how your business is what the investors are looking for.
This also means that you should adjust your business plan when presenting to different investors. Something that impresses one investor may be the very reason another investor decides against investing. Don’t sell out by abandoning your original vision, but be sure to frame it in a specific way.
A business plan is not helpful in a practical sense for most new businesses. However, an equivalent may be necessary if you are trying to woo investors. Building the perfect business plan, whether using your website or a pitch deck, requires you to recognize your listeners and appeal to their instincts.
