What is a Business Plan?
A Business Plan is a document that outlines the ability of your Business to operate efficiently and productively at the same time make a satisfactory Profit, and look attractive to Potential Investors. An indispensable tool in your business planning exercise, which not only aids in raising funds but also aligns your business idea to your objectives to ultimate implementation.
Who needs a Business plan?
Are you a start up entrepreneur looking for Seed/Venture Capital? Are you looking for Growth / Expansion Funds? Are you looking to corporatise your set up? Do you want to attract key talent and professionalise your COMPANY?
What ‘tone’ should the plan have?
Keep the tone of your business plan factual.
Are extensively detailed plans better?
Keep your plan succinct. People tend to use too much detail when creating plans. Details could be added in a separate section called “Appendix”
How technical should the Business Plan be?
Do not make extensive use of Jargon – as that presumes that audience members are experts in your field.
How much money do you need?
More than you think, less might be offered. Taking too much money dilutes the stock. Be realistic – raise sufficient cash to last for 2 to 3 years and resist the temptation to sell out early.
How to benchmark costs & profits?
Get data for firms in your field or industry association. Compare the numbers with firms of similar size in the same industry
How detailed should budgets be?
Budgets must highlight all financial aspects in a Budget Summary and have supporting details available.
Which pro forma is most important?
Cash flow would be the key. It is nice to project a profit, but if you run out of cash, your business will be dead, so keep your projection updated.
Should I hire an expert to prepare the financials?
A potential lender or equity investor wants to see not only that the numbers look good, but also that you understand them inside and out. Be a major decision maker in the preparation of your financials but look for professional help with respect to creation, presentation and negotiations. This is because Professionals / Advisors/ Consultants possess the expertise required in putting together a Winning Business Plan.