Writing
a Business Plan
The starting point
for any business plan should be to consider its purpose.
Is it to secure funding? Is it to communicate
the future plans for the company? The writer should
must take into account the perspective of the audience
and tailor the plan accordingly.
General
aims
Whatever the purpose, the business plan must capture
the strategic, operational and financial aims of the
business. The aim is to communicate a message, therefore
the plan should have a good structure, be well laid-out
and written in laymen's language. Make the plan concise,
but include enough detail to ensure the reader has sufficient
information to make informed decisions. Given that the
plan’s writer usually has a significant role to
play in the running of the business, the plan should
reflect a sense of professionalism, with no spelling
mistakes, realistic assumptions, credible projections
and accurate content. (See Business
Plan Format)
Selling
the plan to lenders or investors
If you are presenting the plan to secure funding, then
you are in effect marketing the company, not its products.
Lenders will need to see that you have a strong management
team because it will be largely up to that team as to
whether the company will succeed or fail. What is the
Unique Selling Proposition (USP) for the business? They
will want to be assured that you have adequate market
knowledge and have thoroughly researched the market
with reference to its size, its predicted growth path,
the competition and how the company intends to gain
access to the market. The BBC2 series, Dragon’s
Den, is a striking demonstration of how investors approach
these matters.
Be
realistic
A business plan will only help your business if it's
grounded in reality, whether you are doing the plan
for yourself or for a lender. If it becomes a work of
fiction it's worse than useless and will only result
in bad decisions.
Don't be over-optimistic.
People reading your plan must see that you have done
your homework and that you understand your business.
Professional investors and bankers are skilled enough
to see through any bluffing but even if they accept
it, you will then have to deliver against those targets
and that can only store problems up for the future.
By all means put a positive slant on potentially difficult
areas, but don’t bend the truth.
Financial
Projections
It is not only vital to get the numbers right but also
the rationale behind them. The most important consideration
for anyone lending money will be when they are likely
to see pay back or a return on their investment. They
will focus on your bottom line. How much does the business
have after paying expenses and salaries? They will compare
your business finances with your personal finances.
They will want to know how long it will take for you
to break even. You have to understand their point of
view. Why would they be better off investing in your
business rather than elsewhere?
Review
Process
Once you have completed your plan, it’s a good
idea to have it have it independently reviewed. Select
someone detached from the process that can offer constructive
and objective criticism on all aspects of the plan,
to ensure that no unforeseen errors or wrong approaches
have been made.
A good business plan
should have the following structure:
• Cover page
• Table of contents
• Executive Summary (1 page) clearly readable
in a few minutes summarising the plan’s key points
• Introduction Section – with business background
and outline purpose of plan
• Marketing Section – showing Market analysis,
strategy and plan
• Personnel Section – outlining structure,
procedures, skill & training requirements
• Operations Section – outlining processes
and procedures
• Finance Section – with resume on projections
and assumptions, finance procedures
• Risk Assessment – showing any necessary
contingency measures that might be required
• Appendices - additional detailed reference material,
examples, statistics, spreadsheets, CVs etc., for reference
and not central to the main presentation of your plan.
stepbystep business
plan software will provide full guidance on what you
need to cover - see demo
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