Register nowBecome a member

LoginIf you are already a member, please login

Forgot your password

or keep it simple with and login with social media

6th April 2010

Scrutinising your business plan

15 comments

30087 views

When you think you’ve got a great business idea the problem is you probably have to raise the finance to help make it happen. You won’t get any money without a business plan, so make sure you get it right, writes Douglas Dalby.

 

Writing a business plan isn’t rocket science but there are rules you should follow when it comes to getting the format right. Banks and investors always look for certain components in any plan and your pitch will face summary dismissal if it doesn’t include these.

 

1. Executive summary

 

2. Business concept

 

3. Market opportunity and competition

 

4. Major milestones to date

 

5. Management team

 

6. Financial requirements and projections

 

7. Exit strategy

 

1. Contrary to popular opinion, financiers have more to do all day than wait around for people like you to show up. The Executive Summary of a business plan is a quick synopsis of what you want and what you want to do with it. A good rule of thumb is to keep this to a single page.

 

2. Your business concept should describe what your business is all about in more detail, the rationale behind it and why you believe it will be successful. It should include the target audience and why your product will fulfil an unmet need or be better than anything else already on the market.

 

3. Your analysis of the market or potential market should also include the barriers to entry and the likely competition your product will face. For example, if you decided to set up a newspaper and charge €1 for it, what would happen if someone else came along and sold a similar product for free, funded solely by advertising? Would you still be able to compete?

 

4. Your milestones should include any research undertaken to assess the viability of the project, company formation, executive recruitment etc

 

5. The importance of the management team cannot be over-rated. This section should give a good overview and detailed breakdown of the key people to be involved in the business. “The most important thing for raising money is the quality of the team,” according to Frank Hannigan, a veteran Cork-based technology entrepreneur who has been successful in fundraising for various companies. “Their ability to adapt to an ever-changing business environment will decide whether the company succeeds or fails.”

 

6. The financial requirements and projections must make sense to an investor – the more detailed these are the better. Generally, a financier would be looking for three-year projections showing realistic improvement to the bottom line but taking into consideration seasonal sales fluctuations and other variables.

 

7. The exit strategy is designed to show how an investor will make money from his loan. A financier is unlikely to be excited at the prospect of a repayment schedule alone; he will want a premium on his investment. This usually comes when a company is sold or is floated on the stock exchange.


Hannigan says would-be start-ups will probably have to write a new business plan every few months.

 

“All start-up ideas are embryonic – it takes years before they’re polished into an idea that makes sense and more importantly, makes money,” he says. “The ability to adapt and change is something an investor will look for – a company rarely ends up exactly how it was imagined before it started.”

 

Revelant link:

 

http://www.hmc.harvard.edu/

Comments

Caoimhe Maxwell said
8th April 2010

Really interesting article

Write a comment

Comment

or
Sign in without social media

Welcome to the new All About Business

Close

Powered by

Help us build your profile with some basic details

Please fill in all details.

I`m happy for Bank of Ireland to contact me about their offers I do not want to receive more information, content and resources to help me enhance my business

Thank you for registering

Close

Powered by

Looks like your email address is already registered with All About Business

Recover password

Close

Powered by

Enter your email account to recover your password