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!