At CBAN we know that writing a business plan can seem a daunting challenge. However this skill is a vital
requirement for any entrepreneur or business seeking to increase their chances
of survival. Here is a list of top ten tips for writing that winning plan:
Arguably the most important component of the plan is the Executive Summary. This is a summary of the entire plan and is
usually contained at the start of the plan. It also tends to act as a key
qualifier for time-pressed investors—if they like it, they will read on, if not
they will go no further. It should be completed at the very end of the business
planning process and should have a “wow factor” that entices them to read
further. In tandem with this, the writer should also prepare a short “elevator pitch,” a five-minute overview of the key benefits of
the new product/service.
The starting point for any business plan should
be the perspective of the audience. What is the purpose of the plan? Is it to
secure funding? Is it to communicate the future plans for the company? The
writer should tailor the plan for different audiences, as they will each have
very specific requirements. For example, a potential investor will seek clear
explanations detailing the proposed return on their investment and time frames
for getting their money back.
3. Research the market thoroughly
The recent Dragons’ Den series
on BBC 2 reiterated the importance prospective investors place on knowledge of
the market and the need for entrepreneurs to thoroughly research their
market. The entrepreneur should undertake market research and
ensure that the plan includes reference to the market size, its predicted
growth path and how they will gain access to this market. A plan for an
Internet café will consider the local population, Internet penetration rates,
predictions about whether it is likely to grow or decline, etc., concluding
with a review of the competitive environment.
4. Understand the competition
An integral component to understanding any
business environment is understanding the competition, both its nature and the
bases for competition within the industry. Is it a particularly competitive
environment, or one that lacks competition? How are the incumbents competing—is
there a price leader evident? Finally, including a thorough understanding of
the bases on which you intend to compete is vital; can you compete effectively
with the existing players?
5. Attention to detail
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. The writer should also consider the format of
the plan, e.g., if a business plan presentation is required, a back-up PowerPoint presentation should be
created.
6. Focus on the opportunity
If you are seeking investment in your
business, it is important to clearly describe the investment opportunity. Why
would the investor be better off investing in your business rather than leaving
money in a bank account, shares, or investing in another business? What is the
Unique Selling Proposition (USP) for the business? Why will people part with
their cash to buy from you?
7. Ensure all key areas are covered in
the plan
Undertake research on what a business plan should contain; one
good place to find this is atBplans .
Include sections on the Company, Product/Service, Market, Competition,
Management Team, Marketing, Operations and Financials. The plan should also
take on board the readers’ various preferences for viewing data. While many
plans are predominantly textual, the plan should include some simple colour
charts and spreadsheets.
8. Do the sums
The numbers will be subject to particular scrutiny. Costs should
be documented in full and sales predictions should be both conservative and
realistic. While costs are more certain and predictable, a crucial factor in
the success or failure of the business will be the level of sales. If you are
not particularly comfortable with maths, have someone assist you in preparing a
simple cash flow and break-even chart. This will help the reader understand how
many sales you must make to cover your costs, and also how much financing you
must raise to start up successfully. Remember, at the beginning, there are a
lot of start-up expenses in a period of uncertain sales volumes. If sales are
on credit (including via credit card) it may take up to four weeks for you to
receive the cash.
9. Review process
Once you have completed your plan, have it
independently reviewed. Select someone detached from the process who can offer
constructive criticism on all aspects of the plan. Your local Business Link or
Enterprise Agency should be able to assist with this. This review should prompt
further questions that will need to be addressed in a revised draft.
10. Implement the plan
Finally, a plan should always be viewed as
a living document and contain specifics regarding dates, deadlines and specific
responsibilities. It should be constantly reviewed and updated, as well as
being used in regular “plan versus actual” discussions. Business relies heavily
on people taking actions and being accountable for them. A winning business
plan will help to ensure that the business is fully focused on what is required
to achieve the company’s goals.
