How to Build a Successful Business Plan

  • Clarity: keep language simple, go easy on adjectives, one idea per sentence, tabulate
  • Brevity: Prune & prune again, essentials in, lush descriptions out
  • Logic: Facts & figures, logical sequence to ideas, consistent
  • Truth: don’t overstate
  • Numbers: Lenders & Investors are numerate, words alone will not impress

What You Need to Show

  • A brief statement of your objectives
  • Your assessment of the market you plan to enter
  • The skills, experience and finance you will bring to it
  • The particular benefits of your product/service
  • How you will set up the business
  • The longer term view
  • Your financial targets
  • The money you are asking for and how it will be used
  • Appendices to back up previous statements, especially financial projections
  • History of the business (where appropriate)

Take account of

  • Tech-heads vs. Commercial reality
  • Be clear about exactly what you are about. Manufacture/sales/service/all three! Know your skills & resources
  • Show clear line of development from innovative research to marketable product
  • Excite with your market first, than describe your product/service
  • Who is running the show, have a management structure, show balance of design-led & market-led
  • Ditch the jargon
  • Show you’ve taken on the boring aspects as well as the exciting

Key Ingredients of the Business Plan

Person profile

  • Realism
  • Experience
  • Strengths and Weaknesses

Business Profile

  • the Product/Service
  • the Demand
  • the USP
  • Access to information

Market and competitor analysis

  • Industry risk
  • Threats and opportunities

Management profile

  • Realistic assessment of management skills needed and available
  • Team skills
  • Contingency

Borrowing proposition

  • Sources of capital
  • Adequacy of funding sought
  • Repayment capacity
  • Funds Flow
  • Debt service capacity after capital expenditure and drawings

Downside analysis

  • Breakeven analysis
  • Sensitivity analysis

Key factors

  • Timing, Costs, Interest rates
  • Protections
  • Access to further available funds
  • Asset backing
  • An exit strategy , if needed

Covenants and controls

  • Key Performance Indicators
  • Key covenants

And remember

Napoleonic plans of tremendous breadth and vision are fine, but Wellington’s attention to detail won him the battle of Waterloo!