Business plans...
Discussion
A horrid topic which I'm sure makes most of us out there cringe.
Now, I've done a few over the years, and had some success with the only one I chose to act upon having shelved the other ones, but I'm keen to find out if there's better ways.
I'm now looking to start a business in a sector which is fairly new to me, and will need a good solid business plan to present to various people along the way. This is a completely new venture and I'm starting from scratch with it, including raising capital / funding. Could be suicide in the current financial climate but I believe the market I'm looking to work in is still very much a sure thing, comparitavely.
Anyway, I'm basically interested in finding out from PH's more business savvy folks what makes a good business plan, and how is best to structure it, what makes a bad one and so on.
I'm not asking for someone to do it for me, and I'm loathed to pay someone to write one for me, if such a service even exists. I've done much googling, and have found a few very useful sites, but to my mind you can't beat help from real people who know about / are experienced in this sort of thing, so if it's not too bold to ask, I'd be very grateful for some pointers in how to create an appealing business plan rather than a generic rehashed one.
Apologies if this has been covered before, the search didn't really help.
Cheers,
Stu
Now, I've done a few over the years, and had some success with the only one I chose to act upon having shelved the other ones, but I'm keen to find out if there's better ways.
I'm now looking to start a business in a sector which is fairly new to me, and will need a good solid business plan to present to various people along the way. This is a completely new venture and I'm starting from scratch with it, including raising capital / funding. Could be suicide in the current financial climate but I believe the market I'm looking to work in is still very much a sure thing, comparitavely.
Anyway, I'm basically interested in finding out from PH's more business savvy folks what makes a good business plan, and how is best to structure it, what makes a bad one and so on.
I'm not asking for someone to do it for me, and I'm loathed to pay someone to write one for me, if such a service even exists. I've done much googling, and have found a few very useful sites, but to my mind you can't beat help from real people who know about / are experienced in this sort of thing, so if it's not too bold to ask, I'd be very grateful for some pointers in how to create an appealing business plan rather than a generic rehashed one.
Apologies if this has been covered before, the search didn't really help.
Cheers,
Stu
Funk said:
I'd just go back to Call of Duty 4, chap. 
Yeah, I'm trying to plan the new business between rounds, though investors might be a bit peeved when they realise the work is a sporadic 1 minute every 10. And no it's not prostitution Edited by Funk on Wednesday 12th November 02:25
Done a few over the years - both for my own ventures needing to raise funding (banks, angels and VCs) and for large corporates looking to pass the financial gatekeepers.
If the prime purpose of yours is to raise funding, rather than attract partners or simply act as a roadmap, then I would write it to appeal to an investor - thats not to say you should skip over some of the over sections like route to market, etc, but investors will be looking for how they are going to make a decent return.
If you're looking for funding from angels or vs's, some of them can tend to invest in the people involved rather than the plan - if they don't believe in the people behind the plan no matter how sound it is then you'll never get funding. Make sure you have a good team, with sound track records - include descriptions of the team in the plan.
If the prime purpose of yours is to raise funding, rather than attract partners or simply act as a roadmap, then I would write it to appeal to an investor - thats not to say you should skip over some of the over sections like route to market, etc, but investors will be looking for how they are going to make a decent return.
If you're looking for funding from angels or vs's, some of them can tend to invest in the people involved rather than the plan - if they don't believe in the people behind the plan no matter how sound it is then you'll never get funding. Make sure you have a good team, with sound track records - include descriptions of the team in the plan.
Cheers! It's not requiring a large initial outlay, though there will be some borrowing to fund a start (50% of startup costs from my savings, the rest will be borrowed). Purpose of the plan, well same as anyone else really, though I'm not looking for massive investment, nor a business partner. Will be going to the bank at some stage though, as well as a few other places, though not all with the intent of scrounging cash.
It's something I want to get perfect before starting, the content I can do, more curious about layout and where other business plans fail really I suppose as it's something I've only ever tackled myself using google and microsoft word, nothing else.
It's something I want to get perfect before starting, the content I can do, more curious about layout and where other business plans fail really I suppose as it's something I've only ever tackled myself using google and microsoft word, nothing else.
Stu R said:
It's something I want to get perfect before starting,
Forget trying to make it perfect - try to aim to get it as robust as possible, but not perfect - you could miss the window of opportunity trying to make a perfect business plan. It should be a living document anyway, changing over time as yuou discover more about the opportunity. A plan with only 80% of the info stands more chance of success if executed swiftly, than waiting until you have 100% of the info and missing the opportunity. (paraphrase of an old military saying)
Stu R said:
.. the content I can do, ....
glad to hear that.Stu R said:
more curious about layout ........
not sure why you think this is so important? if struggling with layout, I'm sure the internet has lots of templates or your bank, if really stuck send me a PM and I'll see what I can send through.Stu R said:
.... and where other business plans fail ...
Business Plans don't fail in themselves - only poorly thought through BPs or the execution of those plans. I think most startups fail to mature into full businesses through a poor understanding of the demand for the product/service (other than friends & family, no one actually wants the product/service), a poor understanding of the route to market/how the product/service is actually going to be sold or poor timing (trying to launch an estate agency just as the arse has fallen out of the market)
I would strongly recommend you put a lot of effort into developing your financial plan. You can easily generate a big old Excel spreadsheet to analyse monthly cashflow for the first three years. Create groups of rows for:
- Overheads
- Operating costs
- Taxes
- Income (probably by channel)
You can factor in late payments, bad debt allowances and more. You can then analyse investment profile, peak debt (when & how much).
Match the spreadsheet with a Word document of notes and assumptions. Row-by-row define your assumptions (e.g. on wages, you would note "May Yr02: employ salesman @£24k"). Benefits are:
- You can quickly adjust your assumptions
- You can churn out the figures your investors want
- Every month you can compare actuals to plan. Spot where your problems are and where you need to act.
- Revise your forecasts easily every three months, and see what the effects are likely to be six months down the road.
In other words, doing the detail maths up front, you can see what the real plan needs to be, how much investment you are really going to need (and peak debt is likely to be some way down the line), and have a framework on which to manage the business and cashflow from Day 1.
Investors may not want to see the detail, but they'll appreciate that the numbers are more than finger-in-the-air. And you've set yourself up to manage the most common cause of failure - lack of cash.
- Overheads
- Operating costs
- Taxes
- Income (probably by channel)
You can factor in late payments, bad debt allowances and more. You can then analyse investment profile, peak debt (when & how much).
Match the spreadsheet with a Word document of notes and assumptions. Row-by-row define your assumptions (e.g. on wages, you would note "May Yr02: employ salesman @£24k"). Benefits are:
- You can quickly adjust your assumptions
- You can churn out the figures your investors want
- Every month you can compare actuals to plan. Spot where your problems are and where you need to act.
- Revise your forecasts easily every three months, and see what the effects are likely to be six months down the road.
In other words, doing the detail maths up front, you can see what the real plan needs to be, how much investment you are really going to need (and peak debt is likely to be some way down the line), and have a framework on which to manage the business and cashflow from Day 1.
Investors may not want to see the detail, but they'll appreciate that the numbers are more than finger-in-the-air. And you've set yourself up to manage the most common cause of failure - lack of cash.
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