Posted by kari.petroschmidt
A business plan must conform to the same criteria. Vaughan Evans (“Writing a Business Plan – How to win backing to start up or grow your business”, Pearson, 2011) says a business plan must especially be clear on risks and written so as to convince potential backers and investors. There is also no harm in really digging deep to bring all the possible positives and negatives into the light for you to evaluate again. Writing it down makes it tangible.
The goal of a business plan is simple: It must convince your stakeholders, investors and backers that your business should have their support, financial and otherwise. It must be written specifically to address the needs of these people. To do this, you need to understand your business and those that you want to get backing from. Without the right homework, you will not be successful. You must tailor your business plan to address the needs of the backers. They typically want to know the following:
· Who is the market for your output (service or product) and why would they want your offering?
· What competition can you expect and from whom?
· What resources will you deploy to achieve your goals?
· What does the cost structure of your business look like?
· How will you generate revenue and be sustainable over the long term?
· What risks are involved in developing and delivering the offering and what is the quantified financial implications?
· How robust are your strategies to cope with adverse events?
There is no place for arm waving. Only facts and figures will make the grade. Be transparent and honest, show the best case and the worst. And if you’re not comfortable with it, why would they be? Make sure you know how the risks will be mitigated, or mitigate them in advance. Then read it over a few times and put yourself in the shoes of the backers and the market you are trying to serve. Does it still make coherent sense? If not, rework!
Finally, whether you are working for profit or not, the song remains the same: you need money to make things work, and you will only get money if your plan sounds good to those that have the cash.
Henk is the Entrepreneur-in-Residence for the Audacious program this semester and is also working on his own business Stars-to-Stones.