Tailoring your Business Plan
Preparing a business plan is essential if you are to focus your ideas and test your resolve about entering or expanding your business. It is also a chance to make your mistakes on paper rather than in the marketplace. Once completed, your business plan will serve as a blueprint to follow, which, like any map, improves the user’s chances of reaching the destination.
But your business plan is not a ‘one size fits all’ document, it could be thought of as similar to a jobseekers CV, which will be tailored toward the job being applied for.
Below are some of the people you may want to show your business plan to, and some ideas on how you should tweak the contents to meet their needs.
Lenders or Investors
Lenders may be looking for some form of asset security to back their loan – usually a property such as the family home. They also want the near certainty of getting their money back, and will also want to charge an interest rate that reflects current market conditions and their view of the level of risk of the proposal.
Lenders will usually expect a business to start repaying both the loan and the interest on a monthly or quarterly basis immediately after the loan has been granted and so cash flow forecasts should reflect this.
Investors don’t expect a new business to have many assets so they are up for taking a risk. But because the inherent risks involved in investing in new and young ventures are greater than for investing in established companies, they expect the chance of larger overall returns.
To appeal to this audience, your plan needs to emphasise the prospects of fast growth and big returns. They will expect you to recruit a team of great people, shell out for patents and be cash hungry for a year or two. Not only are venture capitalists looking for winners, they are also looking for a substantial shareholding in your business. You have to be forming a company from the outset and show that you understand that having 70% of a big business is worth a lot more than a 100% share in a small one.
Key employees or partners
When anyone in this audience reads your business plan they want to hear about unlimited growth prospects and exciting opportunities, all to be realised taking very little (or better still no) risk. If the employee you want to recruit is leaving a good job to join you, there is usually a reason. Often they just want the opportunity for recognition or career progression and your business plan is a good way to show how, when the business achieves its goals, there will be opportunities for promotion.
Partners share some of the characteristics of employees, but in particular they will want to read about the opportunity to own a part of a worthwhile venture, perhaps also being able to build on that stake as the firm grows.
The most important audience for your business plan is you! Even if you don’t need to raise funds or recruit staff then the old adage ‘fail to plan, plan to fail’ still rings true. Your plan can be formal or informal but it should be a ‘live’ document, guiding you and being updated constantly to reflect you changing circumstances.
If you are not sure how to put your plan together please register with us to see how we can help you. Alternative get in touch with us on 0844 887 2568* and speak to one of our friendly support staff. You can also leave us a message here.
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