Writing a business plan?

eth0_

Can anyone point me in the direction of any helpful websites/books on writing business plans? Thanks!

Specky

Oh if only there really was a simple answer to this one...

There are a number of books and websites on the market that go through this and I think you can produce something passable at the end of the process in most cases but I don't think it's really possible to write "a" business plan.

Question (1) would have to be : who are you writing this business plan for?

Lot's of possible answers:

1. Yourself - you have an idea and want to put down on paper the details of how a business based around this idea might be made to work. This is the most important type of business plan and probably the least frequently written. Once written it needs to be kept up to date and modified frequently so it needs to be light and based on real facts and figures that can be input quickly. It may never even get into print. It doesn't necessarily need to.

2. Potential investors - you need to show how your business can make money for someone else. Make no mistake, investors are looking for an exit in a sensible time scale with a good return. If you can show how you can get from where you are now to where they make money they will invest. What your business does is incidental really. Needs to be nicely produced, clear and professional.

3. Business development types - there's some sort of course of programme that you want to be a part of and they require you to produce a business plan in order to get involved. To be honest, as long as you can set out the idea in words you've probably done enough with this. Don't waste time producing something that someone else is going to get paid to tear apart before your eyes.

4. Grant application - Enterprise Ireland and the City/County Enterprise boards look for business plans when you look for money but they both have quite specific (and unusual) formats for these (especially the enterprise boards). Don't waste time. They both have leaflets telling you what they want, give them what they want, especially with the enterprise boards, they're going to give you so little it really isn't worth wasting too much time on the process and you're never going to be able to use these plans for anything else...the purpose of the plan in these circumstances is mostly to show the viability of the idea but also to show that the business fits into the required category to "deserve" support. Find out what the acceptance criteria are and write the plan around fullfilling these criteria.

For every person you talk to you will get a different opinion on the necessary information to go into a business plan and the required length. I've seen a lot of people say around 26 pages in the main document with details in appendices but I don't think there is a hard and fast rule on this.

I really don't think many people read the whole plan. The financials are the most important part because they show whether or not the purpose of the plan is being fulfilled (if you're writing the plan for yourself you want to know is the business viable, if your're writing for an investor they want to see will they make a profit and when, if you're writing it for any other purpose then just find out what the other people want to hear and say it).

In your own plans you need to be honest and realistic. You're kidding noone but yourself if you invent pie in the sky sales forecasts.

You really need to include in your plan:

1. executive summary - includes everything else in the plan on one or two pages and sells the whole thing. Write this last.
2. details of your management team - all the people involved in making the business a success. Investors invest in people not ideas, if they don't think you've got what it takes to make it work they won't invest in you however good your business looks.
3. very short description of your business. Don't be technical. Show the customer problems you're solving, these are the needs you are fullfilling without which you have no market
4. market details - total size of market, list of competitors, market share of each, barriers to entry, how much of the market you think you can capture, how the market will react to your entry
5. fullfillment - how you're going to make what you do work, premises, staff, resources, suppliers, lead times etc
6. financial review - cash flow/profit and loss forecasts for the first two years (some people look for 3 or 5 years but that's just waving your finger in the air. If you can show how you get from now to the end of the year and then stick to it you're doing well. Obviously if you're looking to impress an investor you need to show the path from now to the exit and provide believable valuations at that stage so they can see what they can make.
7. action plan - very important and useful tools, action plans give you a route forward. You shouldn't make this all "airy-fairy", start by asking where you want to be in 5 years and what you need to get there. You should then be able to say where you want to be in 3 years and what you need to do to get there. Repeat the process at 2 years, 1 year, 6 months, 3 months and 1 month and before you know it you've got a plan that says what you need to do in the next 30 days in order to reach your goals in 5 years time...in essence...

We have two business plans. One for us which is pretty much purely financial and ties in to the sales plan and the marketing plan and is fed information from our operational plans to (project and production related stuff). It's purely internal, never gets printed and is used basically to show us where we're going to have cash issues and as a sanity check to show if/when the business stops making sense. Businesses often do stop making sense but without some sort of financial plan the people running the business don't notice until it's all too late.

If you're not comfortable with the financials then get some professional help. You can learn the basics quite quickly and in time you will become more familiar but there's no point in agonising over something you don't have a thorough grasp on so get someone who knows what they're doing to do it for you. They'll give you the spreasheets if they're any good and you can tinker with them yourself.

Any one of the "how to write a business plan" books and websites can give you a contents list for a reasonable business plan, the rest's up to you.