What is to critique? It is to examine and judge something. A business plan is written for use in sourcing funding for a business idea. This means you have to convince someone or some people to part ways with their money for your business idea. This is not that easy and that is why you ought to come up with a comprehensive business plan. Question, how then can you ascertain beforehand that your business plan is ready? That is where the idea of critiquing it comes into the mix. How you can do that is the focus of this article.
What To Look At (And How) When Critiquing A Business Plan
Unique Value Proposition (also known as Unique Selling Point)
It is common for people to lie to themselves here simply because they want to insist their business idea is good. Having a unique value proposition cannot be overemphasised because if do not have it you will struggle to sell. This is due to the existence of many competitors in virtually any industry. You can test the potency of your unique value proposition by asking random people (preferably strangers). Ask them whether or not they would prefer your product over others. It would be strategic to ask as if it is someone else’s product so that you get a more objective response. Ask as many people so that you establish a recurring theme. This is just one way you can use to test how unique your value proposition really is.
Rigorously evaluate this aspect of your business. We are dealing with how your business will be making money. Things might sound practical in theory but in practice they might not. For example, someone can say their business model will be the subscription model. This means people will subscribe to access whatever goods or services on offer. Given the product you want to offer it is not always as easy as it sounds. For some products people are more than ready to pay subscriptions whereas for some people just will not do that.
An example of such products can be streaming services and new services respectively. Critically assess the efficacy of your business model; you can even engage experts to give you their sentiments. Remember that you will most likely get questions on the business model from prospective investors or financiers. Remember also that in real-life the business model will have to work by all means. Thus if you do not objectively question your business model you will be fooling yourself.
Coming up with marketing strategies is obviously borne out of several prior things. You would have done a thorough market research to know whether or not there is a market, its characteristics, size, and so on. You would have also studied your competitors and your customers. All the insights drawn from those areas inform your marketing strategies. You then have to evaluate those strategies to, in theory, see if they work or not. The great thing about marketing strategies is that you can run pilot runs. This is made easier especially now because digital marketing (which entails the internet and social media), is commonplace these days. You can run a sponsored ad on Facebook, as an example. From that you can measure the effectiveness for your marketing strategy. This was just an example but it is meant to show you that your marketing strategies must be closely looked at.
The financial details of a business plan are of great importance to prospective investors or financiers. Here is why you should be very careful when it comes to the financials. If there is no coherence in your business plan it will be picked up and you will lose credibility. For instance, you can mention some financial detail say, early on in the business plan. Then later on the projected financial statements it turns out there is a contradiction with the financial detail you mentioned earlier. That is one scenario of a costly blunder.
It is also possible that the numbers on your financial statements might not be adding up. Another common one is when financial projections are not factual or are exaggerated. The preparation of financials (especially projections) in a business plan involves working assumptions. You can make either the wrong ones or fail to realize the ones you need to make. It is very easy to overlook such things and they can cost you.
Prospective investors are seasoned in going through the financials of a business plan – they have gone through many. If there are anomalies or mistakes they will quickly pick them. It would be wise to seek help from people with a good appreciation of financial accounting to evaluate the financials in your business plan before you send it anywhere.
Layout, Spellings And Grammar
Let us start off with the layout here – there are variations from business plan to plan but there are things that must be present and in a particular order. For instance, business plans generally have the following sections (in that order):
Company Or Business Description
If your business plan does not have those elements and in that order, that means you have to correct some things. Note well: section headings might not necessarily have to be like that but the principle is to ensure those areas are covered in your business plan.
Layout also has to do with uniformity, order and aesthetic arrangements of the contents. Closely related to that is checking spellings and grammar. If you are not endowed in English you can have one who is go through your business plan – proof-reading in essence.
The bottom line is to subject yourself to things you possibly can be subjected to by a prospective investor or financier. You have to be ruthlessly strict and honest with yourself. As you do this you definitely win the battle before it even starts. Involve several other people when critiquing your business plan so that you get fresh unbiased eyes. However, be careful to ensure your business idea is not ‘stolen’ in the process.