Putting together a business plan

How to put together a business plan.

By Giles Dixon of ContractStore.com for SUK

 

A business plan is often therefore the initial contact between the entrepreneur and potential investor or lender.  The content and presentation of your plan will be critical in establishing and holding the interest of potential financiers as they review the many proposals that cross their desks.

 

The standard plan does not exist. However, it is important that management’s commitment, aspirations and enthusiasm are clearly conveyed.  Format is flexible enough to adapt to the unique features of your business. Stylistically it is important that management commitment, aspirations and enthusiasm are clearly conveyed. 

 

A plan is a means of formally documenting short, medium and long-term plans developed by management in contents that may range from detailed budget forecasts to future strategic thinking. 

 

A potential investor will read your plan.  Consequently it must be of sufficient length to adequately cover the subject, but care must be taken to ensure that the plan is concise and not excessively long.  It is essential to maintain the interest of the reader.

 

A summary of the plan is crucial. It is a good practice for the plan itself to be preceded by a short executive summary (not more than one page), which summarises the key points of the proposal. 

 

The information presented in the plan itself should be easily located, and therefore a table of contents is important.
 

The body of the business plan should be as easy to read as possible.  This will assist the reader to isolate the factors key to the financing proposal.  Therefore, it is good practice to include detailed information such as technical specifications, management profiles, market data, in-depth financial and operating analyses etc, in the appendices.

 

Most potential investors will prefer to receive a well-presented, well-conceived business plan rather than a glossily printed booklet.  Graphics, charts, photographs and other visual aids should be considered, as these have the advantage of concisely presenting data that otherwise would require detailed narrative in the body of your plan.

 

Having established interest in the Executive Summary, you should then pay particular attention to those critical elements that are likely to be subject to particular analysis and review.  The three most important of these are: Company Management, Product Marketing and the Financing of the Business

A sample business plan outline is listed below:

 

Executive summary (introduction)

Industry

Product

Market

Operations

Management

Implementation schedule

Finance

Appendices

 

The appendices should include documentation that supports or further  explains the strategies and observations noted elsewhere in the plan.

 

Consideration should be given to including copies of the items listed below if appropriate.

 

·          Biographies of key management personnel

·          Market research studies

·          Photographs or drawings of the production(s) or location

·          Detailed technical specifications

·          Organisation chart

·          Letters of commitment from potential customers and suppliers

·          Plant layout

·          Contracts (e.g. management agreements, technology rights, leases).

                                                                               

The cover of the plan should be clearly marked ‘confidential’ and the number of copies in circulation limited and closely monitored.  Before handing over a copy of the plan, especially if you are intending to give it to potential investors, you are recommended to get them to sign a confidentiality or non-disclosure agreement.

 

A detailed, free downloadable guide to producing a business plan is available free of charge from ContractStore.com, which supplies legal business/commercial contracts and documents.