Lets say it loud – a good business plan can be both the foundation and the driving force behind a good business.
By ‘good’ I’m not referring to the quality of the paper, nor the presentation, not even the number of pages or pictures – because those are not important at all.
The most important facet of a business plan is that is is about you and your business, not your interpretation of what the world wants to see.
Legend has it that Mercedes Benz still work from their original plan, though like Trigger’s broom, every part of it has changed several times. Whether it is true or not, that is the definition of a good plan – it stays constant whilst constantly evolving.
In the course of my role of funding provider I am treated to wide range of plans, from a single page of notes to vast, professionally bound quasi novels – if there is a pre-judgement it would go against the volume in favour of conciseness – though it still needs to be thought through.
In no particular order, these are the three biggest turn-offs in a business plan:
Focusing on big numbers: Without clear and concise stepping stones to achieve them. In the world of acronyms, all of your goals need to be SMART (Specific, Measurable, Achievable, Realistic, Timely). Without understanding how you are going to achieve a goal it is absolutely impossible to establish whether that goal makes any sense at all.
Getting a professional to do it: Sorry professionals, there is room for you in the process but the first few rounds of business planning really must come from the business owner. Accountants and specialist can help you in presentation and in challenging your assumptions but they cannot create your plan for you.
Doing a special plan for lenders & Investors: They aren’t stupid! They are interested in realistic outcomes. They will challenge and question the assumptions you have made – which will ultimately bring you back to the plan you wanted to write (if they bother getting that far). So why waste time?
In the case of lenders, we will concentrate on 2 main factors:
- What are the verifiable facts?
- What is the ‘get out’ if it doesn’t go to plan?
Equity investors will have different criteria, but the fundamentals are the same.
So in other words, cut the hype and B/S, and concentrate on building a plan that works for you – and on challenging & re-challenging each and every assumption.
Then you will have a REAL and VALUABLE business plan!