A quick Google or Twitter search will reveal plenty of “Do’s" and “Don’ts” about writing business plans but whether writing your own plan or getting some help from a professional business plan services company you will need to convince on three main areas if you want to secure funding to take your idea forward – the market opportunity, the product or service and the management team.
The Market Opportunity
The bottom line here is to convey a need in the market that is generating a business opportunity. There are many needs within a given market place that do not provide commercial opportunities and will not generate any significant Return On Investment (ROI). So, you need to be clear that your business is commercially viable. You may at this stage want to consider a Feasibility Study to confirm this.
You also need to consider other the market drivers – factors that are shaping the nature of the market and its future development and how that will affect your proposed business. So, for example, this could be legislation, environmental issues, specific economic or social factors as well as technology. Define the market (which should include key players in the market) determine the factors driving it and clearly describe the commercial market opportunity within it.
The Product or Service
So, you know there is a market need but where does your product fit in? Having clearly defined the opportunity the most important next step is to link what you will offer to that opportunity. You need to be clear why your product or service will not only meet the need but also be able to sustain Competitive Advantage over other products and services in the market.
You need to show how your offer will be positioned in the market, how it compares with others out there and clearly show where its advantage lies. Your advantage could be any one of a number of factors including functional or technical difference, quality or price. Whatever the case you need to demonstrate that it is clearly differentiated in a way that will be valued by the market you are targeting.
The Management Team
Having shown there is a market need for your product or service how can you fail to convert this opportunity? Well, one way is by not having the necessary skills and experience in your management team. At the end of the day investor or financing decisions often come down to the “execution risk” of the business plan often referred to as Operational Risk in the business. Unless you have a management team that is well aligned with your market opportunity there is a significant risk in your plan. You need in-house skills relevant to your target market and product or service to execute on the opportunity.
Operational risk extends also to internal controls, systems and processes. Where the internal management skill-set does not cover these you will also need outsourced specialist help – this could be anything from legal advice, financial accounting and corporate secretarial services to specific product or service related support. You should also think about building your broader management team to include Non-Executive Directors or independent Advisors that will give an investor the confidence that their money is in safe hands and that the business will be managed in line with best practice.
Integrating these Cornerstones in your Business Plan
In order to convince that your business plan stacks up you need to link these three key elements to other parts of your business plan. So for example, you not only need to link the Market Opportunity directly to your product or service, but you also need to show how you are going to reach your target market through your sales and marketing strategy and action plan. Throughout your plan you need to show that your business plan and the rationale behinds it is “joined up” if you are going to convince and investor or funding organisation to part with their money.
The Business Plan Team
- Jon Hunt is the Lead Consultant for The Business Plan Team which works with entrepreneurs, start-ups and growing businesses that need help developing a professional business plan to secure funding and guide internal management. It has developed business plans for a wide range of businesses and corporate clients looking to raise funding of between £50,000 and £200million in many different industry sectors including Social Media, Retail, Construction, Mining, Renewable Energy, Technology, Healthcare, Interior Design, Sport & Leisure, Investment Banking, Wealth Management and Trading. Testimonials from these clients illustrate the high levels of service TBPT provides.