Wanting to have your own business is something that most working adults dream about. However, a small percentage of them actually get to go anywhere with their ideas. The reasons for this are many, but more often than not it is their business proposal that ultimately fails them.
A business proposal, also known as a business plan, is the most important thing whenever a soon-to-be business owner wants to get their idea off the ground. Starting things fresh is always the hardest, but it is far from being impossible. As long as there is a good plan laid out before those you have to convince that your idea makes sense, you should be fine.
Of course, this is much easier said than and people usually spend a lot of time and effort writing up their proposal and making sure it makes sense, both in general and financially. If it does not make money and if it is not something the customers want or need, it will probably not be that successful.
But even something that seems unnecessary could become great if done correctly. In this article, we are exploring the concept behind writing business proposals. More precisely, there is going to be more words about the mistakes one has to avoid if they want their idea to go through all the way. Keep reading to find out more.
1. Not Using the Right Tools
Everything is easier and more efficient when we use the right tools for the job. They are designed, developed, and meant to help us with a certain task, which is why it is so much more difficult and complex to finish the job successfully without them.
When it comes to writing business proposals, the tool you want by your side at all times is a proposal tool. Exactly what its name implies, this piece of software gives you everything you will need along the way. There are features that help with each different aspect of completing the entire proposal.
Think of them as your one-stop destination for the entire plan because that is exactly what they can give you. The next time around you want to try to start a new business, make sure use software like this. There are many of them out there but you should try using this proposal tool.
2. Unrealistic Financial Projections
The plan you have in front of you needs to be realistic and to make sense in more ways than one. However, it will mostly be about the financial projections because the investor or the board you are presenting it to does not want to back up something that is not viable. Businesses rarely achieve great financial success in their first year or two.
It takes time to get the profits coming and many other things need to happen before that. If your predictions are not realistic, it will be easily visible. With a little research regarding the money that would have to be involved, even the most elaborate plans can be turned away and disputed.
Lenders and investors always expect to be shown a clear, realistic picture of where the business is now, and what your hopes for it are down the line. Very optimistic plans with no real explanations and projections are rejected most of the time because nobody wants the risk.
3. Not Having a Target Audience
No business can succeed if it does not have customers, that much is clear and easy to understand. But the way you define what the bulk of your customer base is going to be made out of matters when you are still trying to get financial aid. The investor always wants to know in detail who your target audience is.
Even if the business is meant to have all sorts of customers regardless of their age, gender, or interest, there needs to be a model customer around which everything will revolve. Outlining this and allowing it to be known who you want to target is a sure way to secure enough investment money.
This can easily be done by envisioning your future place of operation and thinking about who is most likely to walk through the door. Is it family people, is it the adolescents, is it a certain group of enthusiasts and fans? Think about who will be your main customers and your proposal will have higher chances.
4. Forgetting about the Competition
Not every business has the same chance of succeeding in every situation. There are vastly different concentration levels of certain types of businesses in every community. Your wish to enter a certain market is not enough. There needs to be enough research about the competitors and their success in the community you want to be a part of. Maybe there is already a restaurant like the one you want.
Perhaps the office space you plan to build will never be rented because there are no more companies looking for extra space. Does your town really need another bar? Maybe it does, but maybe it already has numerous bars many of which are struggling already.
Forgetting to focus on the competition and the fact that it is a battle for every customer out there is not good for a business plan. Remember that the lenders will know a lot about the situation during the meeting, so you need to prepare for their questions.
5. No Distribution Channel(s) Secured
Every business needs to have distribution channels in order to be able to provide products and services to clients and customers. Without everything running smoothly the people are not able to get what it is you are selling.
Before you can start a business and be a part of the industry, you need to think about how and where you can get what you need on a daily basis. Channels that work for you and that will help you succeed are some of the things investors will look into in great detail.
Get in front of the issue by explaining how the product or service will reach the clients, and how the parts and commodities will reach your offices. Answer their questions before they ask them and your plan will be fine.