| Key Tips for Writing a Plan
The starting point for any business plan should be to consider its purpose. Is it to secure funding? Is it to communicate the future plans for the company? The writer should must take into account the perspective of the audience and tailor the plan accordingly. General aims
Whatever the purpose, the business plan must capture the strategic, operational and financial aims of the business. The aim is to communicate a message, therefore the plan should have a good structure, be well laid-out and written in laymen's language. 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. (See Business Plan Format)
Selling the plan to lenders or investors
If you are presenting the plan to secure funding, then you are in effect marketing the company, not its products. Lenders will need to see that you have a strong management team because it will be largely up to that team as to whether the company will succeed or fail. What is the Unique Selling Proposition (USP) for the business? They will want to be assured that you have adequate market knowledge and have thoroughly researched the market with reference to its size, its predicted growth path, the competition and how the company intends to gain access to the market. The BBC2 series, Dragon.s Den, is a striking demonstration of how investors approach these matters. Be realistic
A business plan will only help your business if it's grounded in reality, whether you are doing the plan for yourself or for a lender. If it becomes a work of fiction it's worse than useless and will only result in bad decisions.
Don't be over-optimistic. People reading your plan must see that you have done your homework and that you understand your business. Professional investors and bankers are skilled enough to see through any bluffing but even if they accept it, you will then have to deliver against those targets and that can only store problems up for the future. By all means put a positive slant on potentially difficult areas, but don.t bend the truth. Financial Projections
It is not only vital to get the numbers right but also the rationale behind them. The most important consideration for anyone lending money will be when they are likely to see pay back or a return on their investment. They will focus on your bottom line. How much does the business have after paying expenses and salaries? They will compare your business finances with your personal finances. They will want to know how long it will take for you to break even. You have to understand their point of view. Why would they be better off investing in your business rather than elsewhere? Review Process
Once you have completed your plan, it.s a good idea to have it have it independently reviewed. Select someone detached from the process that can offer constructive and objective criticism on all aspects of the plan, to ensure that no unforeseen errors or wrong approaches have been made. A good business plan should have the following structure: | " | Cover page | | " | Table of contents | | " | Executive Summary (1 page) clearly readable in a few minutes summarising the plan.s key points | | " | Introduction Section . with business background and outline purpose of plan | | " | Marketing Section . showing Market analysis, strategy and plan | | " | Personnel Section . outlining structure, procedures, skill & training requirements | | " | Operations Section . outlining processes and procedures | | " | Finance Section . with resume on projections and assumptions, finance procedures | | " | Risk Assessment . showing any necessary contingency measures that might be required | | " | Appendices - additional detailed reference material, examples, statistics, spreadsheets, CVs etc., for reference and not central to the main presentation of your plan. | |
