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Creating a winning business plan - key considerations

Victoria Kiess

When setting up your own business it is vital that there is a clear direction for the business and a strategy for how you plan to achieve your business objectives.

A business plan can help a management team bring together and rationalise their ideas for their business and present their strategy and ideas to potential investors, debt providers, advisors and other professionals.

When drafting your business plan, it is important there is a clear structure that contains sufficient information without overloading each section of the plan with too much detail. Potential funders will read many business plans, and will want be able to quickly identify and digest the key pieces of information about your business.

Sections of a business plan

The typical sections of the business plan may include:
  • executive summary / investment highlights;
  • company overview;
  • the market and competition;
  • products and services;
  • key customer relationships;
  • financial summary and
  • future strategy and funding requirements.
When drafting your business plan, it is important that the information is supported by informed assumptions and research, as this could be scrutinised when presented to third parties. The assumptions should be realistic and achievable and if you are looking for investment, there must be a clear rationale as to how much investment is required and how it will benefit the business.

Financial forecasts

An important aspect of the business plan is the financial information and the forecasts, which provide the reader with an understanding of the potential profitability and growth of the company.

When creating these forecasts, it’s useful to get someone with financial or accountancy experience to help put them together, to ensure financial information is being recognised and presented appropriately. Some key points to consider are:
  • don’t be overly aggressive in your forecasts; make sure they are believable and you have the evidence to back up your assumptions;
  • make sure you understand the size of the whole market and be realistic as to how much of it you are going to take (sometimes just 1% will be realistic) and
  • make sure you build 15-20% contingency costs into your forecasts – nothing is ever smooth sailing.

Simple aspects such as presentation can make a big difference to a business plan, making it more appealing and easier to read. These include:
  • keeping the same font and colour scheme throughout the document, particularly if you have a specific brand image;
  • having clear headings and sub-headings;
  • including a contents page;
  • using tables and graphs to present financial information;
  • using bullet points rather than long paragraphs and
  • using some pictures or graphics (where appropriate).
Areas that investors will be looking for

There will be some key areas that investors will be considering when reviewing your business plan:
  • Vision: what is the ultimate vision of management and the overall plan for the business?
  • Commerciality: what are the key points of the business model, such as sales and marketing strategies, and can these be achieved?
  • Advisers: who is helping the company with its strategy? It is important that the management team includes strong Non-Executive Directors who can help realise the vision of the business.
  • IP: how will the business protect and realise the value of its IP?
  • Authenticity and honesty: investors want to be able to understand the realities of the business plan as well as the selling points. Ultimately they need to be able to trust the information and assumptions in order to be willing to invest.
Business plans are important to help a business develop its strategy, however they must be carefully considered and presented in order to be a useful aid to growth and development of the company.

For further support and guidance on starting up a successful business, please contact Moore.