Plan to succeed in business
Q: I've been doing a tonne of research on how to write a business plan and I feel like everyone has different thoughts on what to include and how to write something that actually makes an impact. I'm sure you've seen thousands of business plans in your career - what catches your eye?
A: You're right, I have seen more business plans than I can remember and I have to admit that most of them aren't worth the paper they're printed on.
The reason for that is because most of the time the person who is writing the plan cares more about the look and feel of the document than the actual content.
The best business plans start at the end - with the business valuation - and work backwards. They start with the exit strategy and they go through the steps to get you as a business owner to where you want to be in, say, five years' time.
By doing this, you almost automatically create a step-by-step guide, rather than a fluffy plan riddled with business rhetoric and theories. You get down to the nitty gritty of how you're going to achieve what you're setting out to do.
The best business plans are short - they have all the key numbers and how those numbers will achieve the goal on the first page.
From there, the following pages go on to identify the Key Performance Indicators (KPIs) with the most important one being the simple plan for growing your revenue. Growth is a common strategy with most businesses, and it can be achieved a number of ways; time, technology, size, volume, quality, etc.
It depends on the business of course, and will differ depending on if you want to open a florist or start a carpentry business, for example. But the principles still apply regardless of what you want to do.
A good business plan will take all of the strategies and tactics and show how each one contributes to the bottom line - the exit strategy.
The best plans show these basic building blocks and take into account every possible hiccup, economic factor and market threat that can throw a spanner in the works.
If you're not challenging yourself and your plan by testing it against every possible question that might be asked by a venture capitalist or even your own family, it's not worth anyone's time. So ask every question against your own assumptions and make sure you can back it up.
That's the best defence for yourself and the best way to get your plan read by the people who can make your business dream a reality.
- Mark Bouris is executive chairman of wealth management company Yellow Brick Road. His advice here is intended as guidance only.