A well-researched and professional business plan can be a great help to entrepreneurs in California as they work to get new commercial ventures off the ground. It may also be difficult for them to secure financing or attract investors without one. A business plan should provide a description of the new company and the product or service it intends to provide or sell, but this will likely be given only perfunctory attention by people who are thinking of investing their time or money. For potential investors or partners, the most important parts of a business plan will be its market and competitive analysis sections.
Countless new businesses fail each year because their owners misread the market or underestimated their competition. When reading the market analysis section of a business plan, potential backers will bear this in mind and look for signs of overconfidence or hubris. Savvy entrepreneurs understand this, and they tend to avoid bombastic descriptions of golden opportunities in favor of statistics and data.
When entrepreneurs evaluate the businesses they will be competing with, they should pay as much attention to their strengths as they do their weaknesses. Instead of focusing on what their competitors are doing wrong, entrepreneurs should be forthright about the challenges they will face and explain how they plan to innovate or improve on existing and successful strategies. They should also include as much information as possible about their competitors’ growth trajectories and sales figures.
Business plans and asset protection
Attorneys with experience in business formation and planning will have likely read many business plans, and they could use this experience to help entrepreneurs avoid common pitfalls. Attorneys could also suggest that entrepreneurs consider protecting their personal assets from business-related litigation by forming their companies as LLCs or corporations.