Updating your business plan
A well-drafted business plan is crucial when raising finance or trying to attract investment, but it is also, of course, an essential tool for the successful management of a business. A carefully researched ‘roadmap’ which includes the right information provides focus, prevents business drift and reduces risk. It will help you and your team to prioritise, set and achieve your goals.
The Introduction To Your Business Plan
Begin your business plan with a brief executive summary to give an overview of everything that follows. It should preferably be just a page or two and be able to stand on its own, enabling any reader to immediately understand the purpose of your plan.
Include a brief company history and track record, a summary of the market, the opportunity and the competition, details of your key management team and a summary of financial information. If the purpose of the plan is to seek equity investment, then your exit strategy should also be discussed. Some people will base their decision on whether to read the rest of the plan on the quality of the executive summary, so make sure it’s compelling and clear, as well as interesting to the reader.
The Business Plan Layout and the use of a SWOT Analysis
This is where to describe your business, including its history, structure, strategy, mission statement, current position of the business, as well as ownership structure. Outline the product or service you provide and any innovations and achievements. Specify the skills and experience of key people and your current and anticipated staff requirements, as well as any recruitment, training and retention plans. Report on your business premises and outline planned expenditure.
Include a SWOT analysis to explain how you will reduce risk by tackling threats and overcoming weaknesses and what you are doing to seize opportunities and play to your strengths.
You will need to show your business strategy and action plan and the tactics you will use to move the business forward. The fundamental business opportunity (e.g. developing a new product, accessing a new market, acquiring another business, commencing international operations), how you will access it and the risks and benefits involved will typically be the main focus.
Including your competitors in your business plan
This section should include market research showing market size and your existing/potential market share in specific sectors, as well as information .about your competitors. Provide details of major clients and business relationships to demonstrate your strengths and allay any concerns over business concentration. Outline your marketing activities and show how you identify and develop new business.
Adding The Right Amount of Financial Information In a Business Plan
Summarise historic and forecast financial information including integrated profit, cash flow and balance sheet forecasts for, say, the next three years. You should consider any financial issues or changes arising either in the existing market or as a result of pursuing a new opportunity. Provide details of banking and financing arrangements and set out any required funding and how it will be used. The key is to convince investors and/or lenders that you will not run out of cash, so make sure you allow for funding headroom to cover uncertainty and contingencies.
More detailed financial analysis and market research reports are normally provided as an appendix, along with CVs of key team members, organisation charts, product literature, key contracts and details of IP protection.
Finally, avoid providing a valuation in your business plan as it is unlikely to benefit you. If an investor is interested in your business, and you are interested in having them as a partner, a fair valuation will emerge over time.
For help with your business plan and for advice on how you can attract investment and develop your business, contact Guy Rigby on 020 7131 8213 or email firstname.lastname@example.org