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Consider the following suggestions when writing your plan:
- Base your business plan on a carefully considered outline (table
of contents) - see the business plan outline.
- The most important and difficult sections to prepare relate to marketing
and sales as these can make or break not only the business plan but
also the business itself !
- Support market and sales projections by market research. Ensure
that there is a direct relationship between market analysis, sales
forecasts and financial projections. Assess competitors' positions
and possible responses realistically.
- Be realistic about sales expectations, profit margins and funding
requirements. Ensure that financial ratios are in line with industry
norms. Do not underestimate the cost and time required for product
development, market entry, securing external support or raising finance.
Consider the possibility of the halve-double rule - halve the
sales projections and double the cost and time required.
- Restrict the level of detail on product specifications and technical
issues.
- The financial projections are likely to be straightforward but decide
on a sensible level of detail as regards the time horizon etc. Consider
using a personal computer and a financial modeling package for the
projections. For further help:
- See our range of Excel-based fully integrated financial planners
- Exl-Plan.
- Refer to Preparing
Financial Projections for further information on financial planning
for businesses
-
Use our free On-line
Financial Planner to produce 'first-cut' five-year projections
for your business.
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- If looking for external equity, be realistic about the value of
the business, risks involved and possible returns, and be sure to
indicate possible exit mechanisms. Put yourself in the shoes of an
investor and remember the golden rule - he who has the gold
makes all the rules.
- The management section of the plan is of crucial - experience, balance,
ability and commitment. If a new venture is involved, then management
is likely to be its only real asset. Consider formation of a management
team or strengthening management as part of the plan. Remember the
five ingredients of a successful business are management, management,
management, market and product (in that order,
and not in the reverse order as some inventors and entrepreneurs
might like to think).
- Be positive but realistic about the business's prospects and explicitly
recognize and respond honestly to shortcomings and risks.
- When writing the plan:
- Avoid unnecessary jargon
- Economize on words
- Use short crisp sentences and bullet points
- Check spellings
- Concentrate on relevant and significant issues
- Break the text into numbered paragraphs, sections etc.
- Relegate detail to appendices
- Provide a contents page and number pages
- Write the summary last.
- Critically appraise each draft of the plan and, better still, let
some other experienced person review the final drafts. Identify shortcomings
and weaknesses and develop a work program to put them right before
attempting to redraft your outline or produce a more comprehensive
plan. Assume that up to five drafts may be produced before the final
version is ready. See also Insights
into Business Planning and the Checklist
for Preparing a Business Plan for further guidance on these matters.
- External help and guidance in preparing a business plan can be extremely
valuable. If outside help is used, make sure that the resultant plan
remains your own and not that of your advisers.
- If presenting the plan to outsiders, attach appendices and number
pages. Add a contents page and bind it within attractive covers.
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