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Make your business plan stand out
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Most business plans are dull, badly written and frequently only read
by the most junior of people in the financing organisation. One venture capital
firm in the US went on record to say they received 25,000 business plans asking
for finance in 1999 and invested in only 40. Getting money from financiers is expensive, time consuming and hard
work. Having said that, it is possible to get a quick decision. One recent
start-up succeeded in raising £3 million in eight days, the founder having
turned down an earlier offer of £1 million made just 40 minutes after his
business plan was presented Follow these steps to make your business plan stand out from the
crowd: Hit them with the benefitsYou need to spell
out exactly what it is you do, for whom and why that matters. For example: "Our
website makes ordering office supplies for small businesses simple. It saves
the average customer five hours a week browsing catalogues and £5000 a year in
bank discounts, not otherwise available to firms this size. We have surveyed
200 local small firms who rate efficient purchasing as a key priority". This
statement has the ring of practical authority about it.Believable projectionsFuture charts always
look somewhat optimistic. That's fine, if you can explain exactly what drives
growth, how you capture sales and what the link between activity and results
is.Say how big the market isFinanciers feel
safer backing people in big markets. Small percentages of massive markets may
be hard to achieve - but if you do get it at least it will be worth it. Going
for 10% of a market measured in millions rather than billions, may come to the
same number but it won't be as interesting.Your teamYou and your team, if you have one,
need to sound like winners with a track record of great accomplishments. It
will also help to have some non-executive directors, but they need to have
relevant experience or be able to open doors and do deals.Financial forecastsYou need projected
cashflows, profit and loss accounts, and balance sheets for at least three
years. No one believes them after Year One, but the thinking behind them is
what's important. The profit margins will be key numbers in your projections,
alongside sales forecasts. These will be probed hard, so show the build up in
detail.Demonstrate the product or the
serviceFinanciers need to see what the customer is going to get. A
mock-up will do, failing that a picture or diagram, but words are not
enough.
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