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How to write a compelling business plan

How to write a compelling business plan

Most business plans are produced for a specific reason and the most common by far is to raise finance. However, a well thought out and well written business plan is essential for every company, not just those seeking an investor or a lender. Indeed, the discipline of writing something down is the first step to making it happen. Without one, a business will under perform and risk failure. Learn the reasons why you need to have a business plan and why companies fail.

The business plan:

  • Provides clarity, focus and a blueprint for running your business
  • Improves business performance
  • Is mandatory to secure external investment

It sets out:

  • What your business is about
  • How it is performing
  • What you are trying to achieve
  • How you will achieve it

Every business is unique and thus, every business plan is unique. Nevertheless, most business plans conform to a broadly similar structure. The typical business plan contains:

  1. Executive summary – This section is the first and most important part of your business plan as it invariably determines whether a potential investor or lender will bother to read any further. Most don’t. You never get a second chance to make a good first impression. The executive summary should be no more than two pages in length.
  2. The company – This section includes a brief history, what your business is about, where it is located, how it is performing, its strengths and weaknesses, what you are trying to achieve (vision) and how you will achieve it (strategy).
  3. The market and the competition – This section describes the market, the forces at play on the market and within the market, who your competitors are, how they are performing, their strengths and weaknesses and the opportunity available to your product and service.
  4. The product or service – This section describes what your product or service is, what need it satisfies, how it is positioned, its unique selling point (benefit) and the core target market customer.
  5. The customer – This section describes who your customers are, how they behave, how you segment them and what each segment is worth.
  6. The management team – This section describes the roles, skills and credentials of the key people within your management team.
  7. Business operations – This section describes how your business operates, how you make your products or provide your services, details of your premises as well as a description of your key business processes.
  8. The marketing plan – This section describes how you create the demand for your products and services. It includes details of your routes to market, marketing and sales activities as well as your expenditure and return on marketing investment.
  9. Financial performance – This section provides details of your business’s past, present and projected performance in terms of its profit and loss, cash flow and balance sheet. This section also includes key ratios and sensitivity analysis (i.e. impact of changes in the most important assumptions that drive the forward projections).
  10. Exit – If you are seeking business angel investment, this section states how much finance is required, from what sources and for what purposes. It will discuss the projected return on investment as well as the exit options and timings.

Some do’s

  • Be clear and concise
  • Focus on the key information
  • Be realistic and credible
  • Use plain English
  • Bring the content to life with pictures, diagrams and graphs
  • Seek expert professional help

Some do not’s

  • Waffle or brain dump
  • Be over optimistic
  • Ignore weaknesses and threats
  • Use industry or technical jargon
  • Have inconsistencies between the words and numbers
  • Have inconsistencies in the numbers

To discuss your business critical issue

Please call Paul New on 020 8390 9972 or send a message.

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Contact

To discuss your business critical issue, please call Paul New on 020 8390 9972 or send a message.

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