The reading level for this article is All Levels
When it comes to writing a great business plan, most soon-to-be-new business owners struggle with the same question: Where do I start? In this case, the age-old answer to that question is the best answer, “at the beginning.” The most important part of your business plan is a well written introduction.
If you are seeking investors or a small business loan, your introduction must hook the reader so that they will feel compelled to read the rest of your plan. The first thing a lender or investor will want to know is what problem your business will solve for its customers. That is what businesses do – they solve problems for customers so convincingly that customers willingly give them their money. The first objective of your business plan introduction is convincing the reader that people will actually give you their money to do for them what your business will do! An example will help to go through the steps.
If you were starting a lunch deli, shift your focus away from the savory breads, top quality meats, cheeses and vegetables. Focus on the problem you will solve for your customers. “Downtown workers struggle to find quality food, at a fair price, with a convenient location that lets them get back to their offices in fewer than 30 minutes. These downtown workers don’t want to hassle with driving and parking just to get lunch. They are simply not willing to spend an hour out of the office in the middle of the day.” That’s the problem and it begs to be solved!
Your next objective is convincing the reader that there are a sufficient number of people who have this problem to sustain your business. The exercise varies depending on the type of business you’re starting, but it all comes down to knowing the size of the market you can reasonably hope to reach. For our deli friends, this might be stated as, “There are over 6,000 office workers within two blocks of our planned location. With phone in ordering and delivery service we will have the opportunity to reach all of those customers five times a week.”
Next, preview your unique selling proposition to the reader – tell them what makes you different. You’ll be able to delve into the competition later in the plan. For now, just let them know how your business is unique in the eyes of the customer. Let the reader know in a convincing manner that your business will not be a “me too” business in a crowded market. “Our deli will be the only ground level restaurant with both dine-in and over-the-counter takeout serving baked or cold cut sandwiches on freshly made bread, within six square blocks of the Triple-Towers.”
Finally, speak briefly about your credentials for operating this business. Again, you’ll be able to go deeper in the management section of your business plan. For now, let them know you are the right person to be operating this business. Our deli friend might simply say, “After growing up and working in the family restaurant business for more than 15 years, Joe Hamm our founder is an expert with customers, vendors and employees.”
What has the introduction accomplished? We’ve identified that there is a problem to be solved. We’ve established that there is a big enough market to support the business. We have clarified that our deli will stand out in a crowded downtown environment. Finally, we’ve let the reader know about the credibility of the founder.
More importantly, we’ve done what every good business plan’s introduction should do. We’ve left the reader hungry for more. The only solution to that problem is for them to read the rest of the plan.