The 'perfect' business plan

Those among you of a philosophical mind will argue that perfection is unattainable, but it’s arguable that in a business plan perfection can be defined as attaining the goals which the writer seeks.

In this context, it is self-evident that different plans have different criteria for success/perfection. A business plan for internal management purposes generally seeks to inspire the employees; a plan for raising debt finance can be judged by whether the money is forthcoming from the bank; the success of a plan for raising equity investment depends on both the amount raised and the valuation of the company.

From this simple concept, you can build (at least relative) perfection into your plan. It is easy to write a business plan: there are enough templates, books and software around to ensure that most business people understand the basics of product, market, competition, operations, management  and financials. However, it is really very difficult to write a business plan that stands out from the crowd, and the secret lies not in the business but in the reader. Understand their needs, and the rest will follow. A few headline tips may help:

• Keep it as short as possible whilst covering enough facts to build a full story
• Keep it flowing and not just a series of disconnected sections
• Keep the forecasts and assumptions to reality or, where assumptions are necessary, explain the basis for the assumptions and use analogies with other businesses
• Remember that business is nothing without management
• Explain the risks that are inherent in the business and how they are being addressed

It all sounds so simple. Why then do so many plans fall short of their goal? Often it is because the writer has no experience of producing or presenting a successful plan. They cannot make time available to rewrite the plan, eliminating duplication, formatting it to make it easier to read, identifying weaknesses and plugging gaps.

Most frequently, they are just too close to the business to see it through independent eyes. If you come in this category, ensure that you find someone unfamiliar with the business to provide a critical review. The difference may be that you can move a little closer to perfection.