As celebrations go, it wasn’t much to write home about. In fact, as he emerged from Lord Sugar’s offices, Tom Pellereau looked about as excited as a man who’s just won a free holiday in Skegness; even Tim Henman would have punched the air more passionately than he did at the end. After all the drama and turmoil of the last few weeks, this was a fairly flat way to end this year's Apprentice series.
But then, that stiff-upper-lip sensibility is all part of Tom’s charm. He’s a bit of a throwback to a pre-celebrity age, when men stood up to greet a lady entering the room and footballers celebrated goals with a firm handshake. In a way, his self-effacing celebration was slightly refreshing.
And few would deny that the final was compelling television. Tom, the old-fashioned underdog, overcame runaway favourite Helen Milligan, and amidst the tension, we were treated to some fascinating lessons about business planning – a crucial skill for any entrepreneur looking to pitch to a bank or investor.
Drawing on the successes, and failures, of last night’s contestants, here are five tips to help you create a winning business plan:
Define your product
As Shortlist founder Mike Soutar pointed out last night, Tom’s business plan was based on a new type of chair, and yet his plan made no reference to chairs at any stage. If Sugar had been less enamoured with his character and creativity, this glaring shortcoming would have scuppered his chances.
If you’re pitching a new product to an investor, make sure you devote some time, early in the plan, to defining exactly what it is and what it does. If an investor doesn’t understand the product, they’ll have real difficulty judging whether it’ll work or not.
Jeremy Webb, founder of business planning consultancy Sat Nav 4 Business, told Startups: “Without an idea of what the plan is all about, you would question why anyone should be bothered to read it.
“In a business plan, one would normally expect an executive summary setting out what the plan is about, and explaining why somebody should be interested in reading it, together with a small number of highlights aimed at capturing the interest of the reader. It’s also important to establish the terminology you’re using, so the investor understands what you’re pitching and can relate accordingly.”
Don’t use clichés
As Jim Eastwood would doubtless say, when it comes to business plans, you’ve got to cut to the chase. There’s no point beating around the bush. You’ve got to grab the cat by the tail, keep it short and sweet, and let your facts do the talking.
Or, to put it in a non-cliched way, it’s vital that you use clear and simple English at all times, stick to the facts, and make sure your presentation doesn’t degenerate into a swarm of buzzwords and sales speak.
Jeremy Webb says: “Ideally the plan should be written in simple, factual language which everyone can understand. Use bullet points, coupled with short, sharp, one-sentence paragraphs whenever possible. The summary certainly needs to be bullet points and short paragraphs.”
Meanwhile Charles Brooks advises entrepreneurs to “write their plan in the third person, because this arm’s length approach provides a discipline in terms of your language, and helps you avoid slipping into ‘I’m doing that, we’re doing this’. Flowery descriptive language is to be avoided, and always bear in mind that someone reading your plan isn’t reading it because they’ve nothing else to do.”
Get real
If you wanted to create a business plan guaranteed to fail, you’d combine Jim’s phraseology with Susan Ma’s financial projections. As the experts pointed out, Susan has entrepreneurial experience; sadly, this wasn’t reflected in her figures. If her business plan had talked about a miraculous new hang glider which could fly to the moon, it wouldn’t have been any less credible than the one she actually delivered.
It’s important to be optimistic in your business plan, but always within rational limits. Think about the context of what you’re saying - putting on a small event might be a source of incredible pride for you, but this achievement won’t wow an investor used to dealing in millions, rather than thousands of pounds. Likewise, earning £1,500 selling your products at the weekend market doesn’t quite extrapolate into a business worth £4.5m (with a £1m profit) in year one, as Susan would have it. If you want your plan to be taken seriously, make sure you use concrete research and statistics as a grounding for the sales forecasts you offer.
To work out sensible projections, Charles Brooks says, “You have to do your research in the market, know who the players are, and make a set of assumptions which you can defend and justify. From those assumptions you should be able to flow a series of sales forecasts, and go on to things like profit and loss (P&L) and cashflow from there.”
Don’t use flattery
During this series, Jim showed that charm and flattery can get you a long way; but, ultimately, it won’t impress a ruthless investor. Jim tried to tailor his plan to Lord Sugar and pander to his ego – he even came up with a name with the letters ‘AMS’. Sugar threw Jim’s ego-massage back in his face, and gave him the finger for his troubles.
While you should always frame your business plan in the language of your target audience, and explain in detail why they would benefit from your venture, attempts to charm an investor, or bank manager, are almost certainly going to fail.
Charles Brooks said: “If you’re trying to write a plan that relies upon an individual, you’re going to write it to that individual. But Jim didn’t realise he wasn’t supposed to be doing this. He wasn’t supposed to be writing it for Lord Sugar – he should have written it so any investor could read it.”
Draw on previous experience
If Helen had entered any previous series of The Apprentice, she’d have won by a landslide. But, as Sugar pointed out repeatedly, the object of this year’s exercise was setting up a business, not getting a job.
Helen’s willingness to try her hand at anything, which had helped her win so many tasks, tripped her up at the final hurdle. She believed she could start a business without any previous experience of that industry, and, as Charles Brooks pointed out, “she had nothing to bring to the table in terms of knowledge and contacts.”
If your venture is based on an industry you’ve never previously experienced, it’s pretty much inevitable that an investor, or bank manager, will turn you down – so make sure you stick to what you know.
For more advice about business planning, click here.