In "Business Plan: Securing Funding Part 1" we looked at "How" you write your plan and how a professional business plan gives an indication of your professional approach. We looked at avoiding hype, writing about a "plan" rather than an "idea", being realistic and paying attention to editing and presentation.
In Part 2 we look at content. What are the key elements that you must address in order to secure funding? There are, of course, no guarantees. However, you will significantly increase your chances of funding if you include the following:
1) The Opportunity to Solve a Problem - Your Market Opportunity
Be clear in your business plan what problem you are solving. If you are not solving a real world problem your product or service is simply a "nice-to-have" rather than a "must-have". Must have propositions have a much better chance of getting funded. Once you are clear that you are solving a real problem get clarity on the size of the problem - both in terms of volume and value. You then have an indication of the market opportunity. From there you can go on to show exactly how you are going to reach that market with your solution to the problem.
2) Delivering the Business Plan - Management Team Experience and Expertise
You wouldn't let someone who can't drive and hasn't got a license borrow your car. Whilst they have nothing to lose and will be more than happy to get behind the wheel, you are lining yourself up for an expensive fall! In a similar way, an investor is not going to lend you money for your business unless the management team has proven track record - in particular the knowledge and experience driving your type of product or service to market. Banks or investors need to be assured that the management team will deliver the business plan in front of them. If you haven't got the experience yourself, get it, or get someone on board who has. Investors also like to see that the management team are prepared to get their hands dirty and shoulder some of the risk. You are more likely to secure funding if investor and management risk are aligned.
3) Delivering a Return - Return on Investment (ROI)
You need to convince investors that you have a real market opportunity and that the scale of it has the potential to generate significant profits and cash-flow. You also need to show that they can exit their investment at a future date. Avoid the temptation in the business plan to over-analyse projected revenues, market growth, industry norms and financial valuation models. All this can end up with a highly speculative future business valuation / ROI that can easily be dismissed as over-optimistic by a potential investor. So, you might want to work out funding round valuations yourself, but concentrate your efforts in the business plan on justifying the commercial case. Let them see the potential for themselves and you can then discuss potential ROI with them.
Good Luck!
Jon Hunt
Lead Consultant
The Business Plan Team
www.TheBusinessPlanTeam.co.uk
The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.
Showing posts with label Business Planning. Show all posts
Showing posts with label Business Planning. Show all posts
Tuesday, 25 September 2012
Tuesday, 18 September 2012
Business Plan Checklist to Secure Funding: Part 1 of 2
It's tough raising funding for your business plan at whatever level. You are up against hundreds of other businesses with polished business plans and you need to ensure that yours shines through. You may not have great experience of business plan writing but you can improve your chances of securing funds but making sure you cover off the basics. We have put together a checklist for anyone writing a business plan and in this first part cover a checklist of "How" to write the business plan.
How you write your plan conveys a lot about you. It shows your ability to organise and present information in such a way that is is relevant & coherent and gives an investor a window on how you approach your business. A professional business plan gives an indication of a professional approach. The opposite can equally be true. So here are a few basics to follow:
1) Write about a "Plan" not an "Idea"
Ideas are not enough. Ideas drain time and money and give investors the sweats. An investor or bank want to see a business plan that is ready to be actioned. If you get your funding tomorrow, do you have a time-table of what needs to be done? You need to explain in detail, exactly how you are going to reach your target audience / make your product / deliver your service / operate the business etc. Detail doesn't mean lengthy. Be concise and ensure your business plan is not too long.
2) Avoid Hype
Avoid extreme statements ("un-parallelled opportunity", "we have no competition", "will be outselling [insert any leading organisation of your choice] within 3 years" etc. .. ). Investors have seen all the hyperbole they can stomach and it won't improve your chances to try and think up some new word for "world beating". Show enthusiasm but stick to the facts. Build the case for the business proposition logically. Tell it how it is and you have a better chance of gaining an investors' respect, attention and funds.
3) Editing and Presentation
There is nothing worse than a poorly presented, repetitive, in-coherent business plan that is missing key information, and has obvious spelling and grammatical errors. Make sure your business plan has all the right sections, and don't get bogged down in tech speak or jargon. First impressions count, so ensure the Executive Summary is well structured and the document itself is presented in a professional way. If you are not the best at this then run the document past someone who is. If you decide that you need business plan help make sure you select a good business plan consultant to develop a professional business plan.
4) Realism
Ground your plan in the real world and avoid over-optimistic objectives and financials. Anyone funding a business plan wants to know they are not going to have to deal with a Walter Mitty character who lives permanently in the clouds, and who generally over-promises and under-delivers. Sanitise your business plan by looking at other businesses in your industry, their financial results, their cost base and their growth rates. You can be sure an investor will. If your business plan diverges significantly ask yourself whether you can justify your claims.
In Part 2 we will will look at "What" specific points you need to cover in your business plan that will improve your chances of securing funds.
Good Luck!
Jon Hunt
Lead Consultant
The Business Plan Team
www.TheBusinessPlanTeam.co.uk
The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.
How you write your plan conveys a lot about you. It shows your ability to organise and present information in such a way that is is relevant & coherent and gives an investor a window on how you approach your business. A professional business plan gives an indication of a professional approach. The opposite can equally be true. So here are a few basics to follow:
1) Write about a "Plan" not an "Idea"
Ideas are not enough. Ideas drain time and money and give investors the sweats. An investor or bank want to see a business plan that is ready to be actioned. If you get your funding tomorrow, do you have a time-table of what needs to be done? You need to explain in detail, exactly how you are going to reach your target audience / make your product / deliver your service / operate the business etc. Detail doesn't mean lengthy. Be concise and ensure your business plan is not too long.
2) Avoid Hype
Avoid extreme statements ("un-parallelled opportunity", "we have no competition", "will be outselling [insert any leading organisation of your choice] within 3 years" etc. .. ). Investors have seen all the hyperbole they can stomach and it won't improve your chances to try and think up some new word for "world beating". Show enthusiasm but stick to the facts. Build the case for the business proposition logically. Tell it how it is and you have a better chance of gaining an investors' respect, attention and funds.
3) Editing and Presentation
There is nothing worse than a poorly presented, repetitive, in-coherent business plan that is missing key information, and has obvious spelling and grammatical errors. Make sure your business plan has all the right sections, and don't get bogged down in tech speak or jargon. First impressions count, so ensure the Executive Summary is well structured and the document itself is presented in a professional way. If you are not the best at this then run the document past someone who is. If you decide that you need business plan help make sure you select a good business plan consultant to develop a professional business plan.
4) Realism
Ground your plan in the real world and avoid over-optimistic objectives and financials. Anyone funding a business plan wants to know they are not going to have to deal with a Walter Mitty character who lives permanently in the clouds, and who generally over-promises and under-delivers. Sanitise your business plan by looking at other businesses in your industry, their financial results, their cost base and their growth rates. You can be sure an investor will. If your business plan diverges significantly ask yourself whether you can justify your claims.
In Part 2 we will will look at "What" specific points you need to cover in your business plan that will improve your chances of securing funds.
Good Luck!
Jon Hunt
Lead Consultant
The Business Plan Team
www.TheBusinessPlanTeam.co.uk
The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.
Tuesday, 21 August 2012
10 Key Sections of Your Business Plan
The following sections should be in every business plan:
1. Executive Summary: This should be no more than two pages, compel the reader to read on, and be written last of all once all other sections are complete.
2. Company Background and Legal Entity: How and why the company came into existence, what products and /or services it offers, any track record of performance and its legal status.
3. The Market: This should include current statistics and trends on the market being addressed. It should also include an analysis of the customers in the market space - who they are, how and what they buy. It should culminate in the market opportunity facing the company.
4. Company Product and/or Services: What are you proposing to bring to the market to meet the market opportunity?
5. Competitive Analysis: This should include an analysis of your direct and indirect competition and culminate in how your offer differentiates from that of your competitors in such a way that will gain you competitive advantage.
6. Sales & Marketing Plan: This identifies your target audience and details how you are going to reach it as well as giving a summary of your sales forecast.
7. Operations: This section shows how your business is going to deliver your product or service operationally - who does what and how.
8. Management Team: This is a key section that needs to show that you have the experience and skill-sets within your management team to deliver your proposition to the market.
9. Financial Plan: This is a summary of your financial projections, cash-flow highlights, breakeven, and investor proposition.
10. Appendices: This should include all the detail that you need to support your plan but would make the body of the plan too long if it were included. This will likely include detailed financial statements, management resumes, legal documents, letters of interest etc.
You should also remember that completeness and coherence are important. It won't matter how well written an investment plan if you have omitted to include how an investor will get a return (yes - it happens!) or your marketing plan doesn't address current trends in the market.
Finally, remember to emphasise the three critical elements - Market Need, Product to meet that need, and a Management Team able to deliver the plan.
Jon Hunt
Lead Consultant
The Business Plan Team
www.TheBusinessPlanTeam.co.uk
The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.
Friday, 15 June 2012
So You Want To Secure Investment?
However, even assuming that a business can avoid these pitfalls, the routes to securing investment at the moment is challenging. There are so many businesses looking for funding that sources of debt or equity funding have a wide choice over which to spread their risk.
So how do you get your business proposition noticed? Well, here are a few ideas.
1. Be realistic and avoid extravagant claims - it may be that you are the next Green, Branson, or whoever but most people are not. Avoid claims you cannot substantiate. Small can be very profitable and attractive. Don't overstate your own position or the claim for your product or service.
2. Show a clear path to profitability and exit - investors like to see measurable milestones against which the progress of the business can be measured and funding drawn down. If you don't have financial or commercial awareness your business will fail without someone with executive authority to work along-side you.
3. Show clearly how you are going to use your funding - investors and banks do not like to see large pots of money allocated randomly across the board. They like to see how, specifically, the funding is going to be used and the anticipated outcomes of that funding.
4. Show a solid cash-flow and a good ROI. Worst case scenario is that the business fails to meet targets, runs out of cash and doesn't deliver anything back to those who have invested time and effort into its growth (p.s. that includes you). Be realistic, don't ask for too little money and if the Return on Investment is not good you should question why you are doing it... and asking others to back you.
5. Keep it Simple - don't claim world domination of a market in 3 years. Instead, make sure the core of the business is deliverable & profitable and also highlight potential upsides once the business is established.
The rest is down to you. A backer needs to believe in you - and specifically that you can deliver. There is no point over-selling yourself - you will be found out. Tell it how it is and your vision of how you want it to be but make sure it is rooted in reality. Too many people over-promise and under-deliver - don't be one of them. It is easy to lose your credibility and very hard to get it back.
Jon Hunt
The Business Plan Team
Friday, 4 March 2011
Overcoming Start-Up Hurdles
Even when you have done your business plan and think all your ducks are in a row there will be another hurdle to overcome. This is the nature of the start-up, particularly if you are trying to push the boundaries and deliver innovation in your industry.
Your business plan will detail how you will execute on your opportunity. However, in the start-up environment the only constant is change and that throws up new hurdles and challenges to overcome. It is how you deal with these hurdles on a professional and personal level that will set you apart from your competitors and see your business succeed or fail. How can you do this?
1) Face the hard issues up front and head on. Don't let your passion for what you want to do blind you from reality. It is easy to side-step (or at worst ignore) the issues that may fundamentally affect your core business proposition especially if you don't have experience dealing with them. Get them out on the table early on - be honest with yourself and others - it will save enormous grief in the long term. If any issues are serious enough to affect your core business you should review your financial assumptions to see how they affect your forecast going foreward.
2) Don't be afraid to seek advice. No-one has the answers to all the questions that they will be faced with in starting a business. The art is to recognise your limitations and ask the right questions of the right people. Where you have weaknesses build a network of support (professional, informal, non-executive) and use it to overcome problems as they arise. You don't have to know everything, you just have to know where to find the information that will enable you to make the best decision. Budgeting in your business plan for the cost of periodic advice is wise at least on a contingency level.
3) Be ruthlessly professional. When you come across a hurdle deal with it thoroughly and without exception. It is a threat to your success and that of your business. If you don't it will likely come back and cause you problems in the long term. A number of relatively small un-addressed problems can drain the business and pull it down. Executing a business plan relies on the ability to deliver success amidst change. The way you deal with issues as they arise conveys a message to your employees, investors, and partners. If you deal with issues openly, professionally and ruthlessly you will gain their respect even if your business plan is not achieved in full.
Keep track of your progress against your business plan and forecast. Revise it as necessary when your original assumptions are challenged. In the process, face up to the difficult issues, seek advice and be ruthlessly professional.
Good Luck!
Jon Hunt
The Business Plan Team
http://www.thebusinessplanteam.co.uk/
The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.
Your business plan will detail how you will execute on your opportunity. However, in the start-up environment the only constant is change and that throws up new hurdles and challenges to overcome. It is how you deal with these hurdles on a professional and personal level that will set you apart from your competitors and see your business succeed or fail. How can you do this?
1) Face the hard issues up front and head on. Don't let your passion for what you want to do blind you from reality. It is easy to side-step (or at worst ignore) the issues that may fundamentally affect your core business proposition especially if you don't have experience dealing with them. Get them out on the table early on - be honest with yourself and others - it will save enormous grief in the long term. If any issues are serious enough to affect your core business you should review your financial assumptions to see how they affect your forecast going foreward.
2) Don't be afraid to seek advice. No-one has the answers to all the questions that they will be faced with in starting a business. The art is to recognise your limitations and ask the right questions of the right people. Where you have weaknesses build a network of support (professional, informal, non-executive) and use it to overcome problems as they arise. You don't have to know everything, you just have to know where to find the information that will enable you to make the best decision. Budgeting in your business plan for the cost of periodic advice is wise at least on a contingency level.
3) Be ruthlessly professional. When you come across a hurdle deal with it thoroughly and without exception. It is a threat to your success and that of your business. If you don't it will likely come back and cause you problems in the long term. A number of relatively small un-addressed problems can drain the business and pull it down. Executing a business plan relies on the ability to deliver success amidst change. The way you deal with issues as they arise conveys a message to your employees, investors, and partners. If you deal with issues openly, professionally and ruthlessly you will gain their respect even if your business plan is not achieved in full.
Keep track of your progress against your business plan and forecast. Revise it as necessary when your original assumptions are challenged. In the process, face up to the difficult issues, seek advice and be ruthlessly professional.
Good Luck!
Jon Hunt
The Business Plan Team
http://www.thebusinessplanteam.co.uk/
The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.
Tuesday, 23 November 2010
Investor Down-Time: Your Business Planning Uptime!
As the festive season approaches investor thoughts go to planning their holidays and time away to spend their gains. This always signals a downturn in investor activity and is the ideal time to write that business plan, or fine tune the one on file, in readiness for their return in mid- to late January 2011. Of course, investor and general consumer confidence is still wavering and the news of Ireland's bail out will raise further questions of contagion and "who's next?".
The High street lenders also go quiet too at this time of year. They are also necessarily conservative on their lending policies in light of the economic conditions and further financial regulation. Any request for borrowing needs to be supported by a coherent and realistic business plan that takes into account the current economic climate.
But there is always appetite for investment in a good proposition that has a clear market opportunity and a team on board that will deliver. Make the most of the up-coming down-time and ensure you have a plan for 2011 that will position you well to accelerate out of recession.
Jon Hunt
The Business Plan Team
www.TheBusinessPlanTeam.co.uk
tel: 0800 088 7806
The High street lenders also go quiet too at this time of year. They are also necessarily conservative on their lending policies in light of the economic conditions and further financial regulation. Any request for borrowing needs to be supported by a coherent and realistic business plan that takes into account the current economic climate.
But there is always appetite for investment in a good proposition that has a clear market opportunity and a team on board that will deliver. Make the most of the up-coming down-time and ensure you have a plan for 2011 that will position you well to accelerate out of recession.
Jon Hunt
The Business Plan Team
www.TheBusinessPlanTeam.co.uk
tel: 0800 088 7806
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