Business Plans

Business planning is a key to developing a good solid business. When I started out in business writing a business plan was the last thing on my mind, I wanted to be 'up and doing' and not writing about it. I was forced into writing a business plan when seeking my first round of venture capital and found it a remarkably refreshing experience. Now I would advise anyone starting out in business to write a plan, you will be surprised at what you have not considered. Planning will make you consider every aspect of your business. Make the plan fit your purpose, it may be an operational plan for internal use, it may be for the bank or the start of the journey to find venture capital.   

Planning for Venture Capital

If you plan to seek venture finance the business plan and, in particular, the executive summary are your key documents that will open the door to meetings with investors. Remember you are writing for investors and, as well as telling them about the business, they will want to know how you plan to make them good returns on their investment and when you plan to make those returns.

A good business plan for seeking finance includes:

• Information about your company and its history,
• Details of your product or service,
• Your business model, how do you plan to make money from your business,
• The market, where does your product or service fit, how big is the market, how will you go to market and who are you competitors,
• Your management team, your staff, buildings; cover the planned expansion,
• The financials; typically 3 years of projections are required in summary form,
• An analysis of the risks (a SWOT analysis), and most important...
• THE EXIT STRATEGY! (How does your investor get out the investment with returns!)

The executive summary that precedes the plan contains a synopsis of all these points and strongly highlights how much money you seek from investors. Keep the plan brief and to the point, it should not be full of technical details. If you need to provide more information do so in appendices, these can cover:

• Statutory accounts,
• Cash projections,
• Contact details (and those of your advisers),
• Technical details,
• Glossary (if needed),
• Financial assumptions and model,
• Management resumes.

There are many business plan templates available on websites. Here is my template that I have developed from writing the successful business plans that raised capital for Netcentric. Download a .pdf business plan template from here.