Writing a major business plan is essential for raising money whether from banks or from possible partners. The paradox is that most of us have little or no experience of writing business plans. Here are 10 secrets on how to write a top business plan
1.What are your objectives. Before you even begin writing think what you are trying to achieve. Is the plan for a financial investor who is going to be very interested in the return or are you applying to a bank who is going to be most interested in risk and security. A venture capitalist for example is going to be very interested in how he can get an exit after three to five years whilst a pension fund will be more interested in the potential dividends
2. Write for the audience. Don’t write the plan for a scientist when it is going to be read by Aunt Agatha or your bank manager . If you can communicate your idea easily then you’ve also got a much greater likelihood of raising money.
3. Plan it . Writing is best done on a stage by stage basis. We advise that you begin with the page headings, then the paragraph headings, then write the executive summary and only after that commence on the bulk of the plan.
4. Show them the sales and bottom line. Whilst investors and banks should look at all aspects of a plan in practice sales and net profit attract most scrutiny. It is essential the readers believe your sales forecast so make sure it is well backed up by historical sales or by a convincing explanation and realistic explanation of the market share you expect your product to take
5. Be clear and concise. Your business plan should not be too long or a one page summary we recommend ten to twenty pages is optimum, Good page and paragraph headings are also essential. Supporting data should also added as appendices and as foot notes. The objective is for the reader to be able to very easily follow your story and quickly find the bits he is interested in
6. Put within an industry context. This will lead the reader to understand and believe your sales projections. Your analysis of the market, industry and competitors must show that you fully understand the risks and opportunities.
7. Set out the basics. Any business plan has certain necessary content like it or not. Obvious ones are introduction, management ream, company description, industry analysis, P&L; projections etc. We recommend packaging the plan with a one-page executive summary at the beginning and a clear conclusion at the end to repeat the salient points.
8. Get Advice. Many banks offer free advisory services for small businesses and many government schemes provide free business services including business plan writing. Ask your accountant or lawyer to check that the plan coherent. Alternatively ask your accountant or lawyer to look at your plan – they will be getting lots of fees if you do raise the money. Alternatively show it to a friend and ask him to play “devil’s advocate
9. Competitor analysis. A common mistake in business plans is not to spend enough time analyzing the competition. Remember that includes what they will do in response to your new product or company especially if you start hurting their profits
10. Keep revising. A business plan is not set in stone. After each meeting you should be seeking to improve your plan based on how well the meeting went. In particular revise those parts which seem to be causing concern to readers. Put some time aside to improve those parts Similarly you should be updating your plan with progress made eg finance raised or new investors who have committed funds.