The "Business Opportunity" is fundamental to your business plan. You may have a good idea but without confirming that there is real business opportunity you wont have a business and you wont get any backers. So, before you start the process of writing a business plan make sure you have one! The bottom line is that the more evidence that you have supporting your business opportunity, the more credible your business plan will be, and the more likely you will secure investors.
Don't Fool Yourself
You could assess the opportunity as part of a feasibility study, or simply by carrying out some basic market research and crunching some numbers. But how can you find out whether it is business opportunity worth chasing?
The easiest person to fool is you. You have every right to put your own money where your mouth is on the basis of your "gut feel" but if you are looking for a bank or investor to do the same, your gut feel is not going to be enough . As far as possible you need to put aside your motivations and personal conviction and become objective.
Free & Paid Market Data
So, when looking at your Business Opportunity make sure you look at objective and independent market data to confirm the extent of it.
The first option to explore is freely available internet-based research and freely published information from industry and professional bodies. Press releases, white papers from organisations in your market space are also a good source. Finally, news reports on competitors in the space as well as articles may also give you some top level market data, pricing information and current trends. When looking at different sources, make sure you cross reference them and weed out random data to ensure they are reliable. Use all available free information before you think about paying for market research
Once you have looked through the freely available information you can also check out market research reports to see if there is data there that you need. These are available from a number of sources that cover different industries and sectors. Be sure you know what you are buying before you start paying out hard cash as some can simply be a re-hash of free information.
Crunch the Market Numbers
Once you have some good reliable data the next stage is to “quantify” the Market Opportunity. Here you should look to establish the size of the market and its estimated rate of growth over the next few years. At a basic level you are looking to make an assessment of the monetary value of the market based on a simple set of assumptions relating to price and units sold. Be sure to define the extent of your market - there is no use confirming the size of the international market as £10bn if you are only selling to a specific region in the UK - you need data that will relate to your business.
Does the Business Opportunity stack up?
Once you have quantified the size of the potential market you need to crunch some basic numbers on how the Business Opportunity stacks up under different scenarios. Take a look at some realistic revenue projections and apply costs to your best knowledge. Then apply market related growth scenarios and vary your cost base to see what difference it makes to your profitability.When starting up be sure to consider your addressable market - the market that you can reach initially - before you scale up your forecast to sell nationally or internationally. If things work on a basis profit and loss basis over the first 3-5 years then it will be worth exploring in more depth how you are going to fund the business.
For further evidence talk to potential customers to get some feedback on your idea. See if you can get letters of interest in what you are doing from them - or even better letters of intent to purchase. Once you have confirmed there is a real market and business opportunity all you need to do now is show how you are going to execute on this opportunity in your business plan!
Good Luck!
Jon Hunt
Director
The Business Plan Team Limited
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 plan writing. Show all posts
Showing posts with label business plan writing. Show all posts
Monday, 19 January 2015
Tuesday, 25 September 2012
Business Plan: Securing Funding Part 2
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.
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.
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.
Wednesday, 12 September 2012
3 Key Tips for Your Business Plan Executive Summary
The executive summary is a crucial part of your business plan. whether you are a Start-up or Growing Business It is the first - and possibly last! - thing that an investor, bank or partner will read. They say that people make up their mind about someone within seconds of meeting. The executive summary is similar - if you don't strike the right tone it will only be a matter of seconds before you hear the dull thud of your professional business plan hitting the reject pile. So, here are a few tips to increase your chances of getting your audience to read it, and read on.
1. Write It Last
The executive summary is the culmination of your business planning - not the start point. It should illustrate how joined up and complete your business proposition is. If you write it early on you are likely to create a disconnect between your executive summary and the content of your business plan. A good way to start is to summarise the content from sections of the plan. Then link them up and edit to create a compelling story....
2. Horses for Courses - Write for Your Audience
Make the purpose of the plan clear (raising funding? which type? etc.) and tweak your executive summary for your audience. If you are writing for an equity investor make sure you include a section on investment, ROI etc.. Likewise, if you are looking for a bank loan make sure you tick all the boxes in terms of lending criteria. Make sure it is crystal clear what you want from whoever is reading your business plan.
3. "Leave them Wanting More...
.. and you know they'll read on" (abridged. Bobby Womak). It needs to be complete in itself. It also needs to be short, to the point. And most of all - compelling. No one invests or signs of debt finance on the basis of an executive summary (if you know someone let me know). It is designed to give enough information to create interest and compel the reader to read on. So, make sure you cover the Who? What? Where? When? Why? and How? of your business proposition. Keep sentences short for impact. And entice the reader to read on ...
Good luck!
P.S. If you are looking to get someone to help you develop your Executive Summary and Business Plan check out our tips about selecting a business plan consultant.
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.
1. Write It Last
The executive summary is the culmination of your business planning - not the start point. It should illustrate how joined up and complete your business proposition is. If you write it early on you are likely to create a disconnect between your executive summary and the content of your business plan. A good way to start is to summarise the content from sections of the plan. Then link them up and edit to create a compelling story....
2. Horses for Courses - Write for Your Audience
Make the purpose of the plan clear (raising funding? which type? etc.) and tweak your executive summary for your audience. If you are writing for an equity investor make sure you include a section on investment, ROI etc.. Likewise, if you are looking for a bank loan make sure you tick all the boxes in terms of lending criteria. Make sure it is crystal clear what you want from whoever is reading your business plan.
3. "Leave them Wanting More...
.. and you know they'll read on" (abridged. Bobby Womak). It needs to be complete in itself. It also needs to be short, to the point. And most of all - compelling. No one invests or signs of debt finance on the basis of an executive summary (if you know someone let me know). It is designed to give enough information to create interest and compel the reader to read on. So, make sure you cover the Who? What? Where? When? Why? and How? of your business proposition. Keep sentences short for impact. And entice the reader to read on ...
Good luck!
P.S. If you are looking to get someone to help you develop your Executive Summary and Business Plan check out our tips about selecting a business plan consultant.
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, 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.
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