All businesses need to start with a plan. The Business Plan is primarily used to seek funding for a business venture and you would present it to seek a meeting, but it is also the basis for your own plans for your business going forward.
Before you start your business plan, you need to clarify in your own mind what it is about your business idea that is so amazing, if you are not 100% convinced then how do you expect others to be? You don’t need to spend endless hours getting the plan document right as you are likely to write and re-write this over time as you think, re-think, clarify and gain feedback. You will find better ways to explain how good your business is over time. Just start by getting the bare bones down on paper.
When you are pitching to investors they will want to know exactly where their money is going, how their money will help your goal, what returns they will get and how long they can expect to wait for the returns. Your business plan should therefore be specific and have the path to your goal clearly defined.
It is also important to identify any potential weaknesses in your proposed business and show how you are going to address them. This will give the investors more confidence that you are aware of the possible pitfalls and will make them more aware of any potential risks.
It is important to be open and honest with your investors so that they can make up their own mind about the business. Keep your business plan jargon-free so that it is clear and easy to understand, this can be difficult when you are so close to it or if your expertise is very technical.
Get someone else, ideally someone with business experience but not linked to your business, to read through it for you and highlight any points that needed clarification. This will help you add in anything else you need to make the document as understandable as possible. There should be no unanswered questions, it should all be covered and in a way that the investor will be excited about what they are reading and want to meet you.
How to present it
Your business plan can be quite plain but it is nice to add some graphics such as flow diagrams, maybe some coloured graphs for the financial figures, photographs of products, your logo, etc. Put in whatever it takes to put over your business idea clearly. You may want to try coloured paper or different fonts.
Use clear heading titles in bold so that people know what to expect next and put things in a logical order. The main text should be 11 or 12 font size so it is readable and make sure you have a clear space between paragraphs. Avoid really long paragraphs, shorter ones are easier to digest.
Make sure you have a contents page and page numbers throughout so that it is easy to find sections they want to re-read or find quickly.
Keep the document crisp, easy to read and professional looking. A typical Business Plan would be around 30-50 pages.
The Plan itself
What your plan should contain is not set but there are some essential elements that all business plans contain. These include:
Company’s background – how you got to where you are, who you are, where you could go with investment to create fast growth and a highly profitable business.
Market – who your customers are, the size of the market now and in the future, the demographics of your ideal customer (age, gender, social class, spending habits, where they live etc), why customers will start to use your services/products.
Competition – identify other people doing something similar and explain how you differ and identify any potential barriers to you entering this market. Don’t overstate the case or underestimate your competition! Really look hard at your Unique Selling Point – what will you do differently or better than the others in the market. Take into account that the competitors can also take your ideas.
Business Operations – what is you roll-out strategy, your exit strategy, what you are expecting to get out of the company and how and when it will happen? Include key responsibilities and information about how the business would operate on a day to day basis and how growth from investment would affect this.
Include information about yourself, your business partners and management team including any non-executive directors. Each should have a brief outline of relevant experience especially if it boosts the company’s credibility.
Marketing Plan – where is your market and where can you reach them. What is the best platform for disseminating information about the company’s products and services. List marketing strategies, costs and expected returns. Include some information about building the brand such as what is your underlying message or ethos. People are now tending to buy WHY you do something not necessarily what you do.
This section should contain clear figures of projected growth and profits. Make sure you outline overheads including costs of staff, premises, product creation and delivery etc so that you can clearly present the profit margins.
Your figures must add up and not be vague or misleading, but equally not be too complex and confusing. You must be able to confidently explain all the figures in your business plan so make sure it is totally clear in your head and that the numbers are realistic.
If possible include at least 3 years of summary figures (for an existing business) showing past performance for cash-flow, profit and loss, turnover and balance sheets. Then give projections for 3 years ahead (with investment) making sure that you take into account the extra costs of growing and running the business.
Check and double check your figures before finalising the Plan.
Once you have written your Business Plan, go back to the beginning and insert the Executive Summary. This is the bit that the investor is likely to read first and if it is not interesting to them they may not read on.
This should be no more than 2 pages long and needs to capture the essence of the plan and make the investor want to read more. Avoid too much technical information and give a paragraph or two on the key areas such as potential for growth, the market, background to the company and the management team. Only highlight important information, avoid too much detail – that will be in the plan. Try to outline the business in a way that will arouse interest without revealing everything.
Review your Business Plan thoroughly before letting any investors look at it.