Preparing a Business Plan

Most small business gurus (you know the types - the ones who've recently been made redundant having spent most of their corporate lives killing careers with PowerPoint presentations and now want to sell their perceived skills to small business entrepreneurs) will have us believe that the most important reason for having a business plan is so that we can borrow money for our businesses.

And their angle on this? To write one for us, for which of course we will have to pay them a fee.

Let's get one important thing clear about business plans - you don't need to have someone write one for you. Even if they've been Richard Branson's personal business planner for the past 20 years, the only person that can really write a truly winning business plan for your business is you.

The 10 elements of a winning business plan

1. A well-researched business idea which includes information on what products and services you intend to offer, who your target customers are, details of your competitors and a general assessment of the market you are proposing to work in.
2. A clear idea of how much it's going to cost you to start your business.
3. A clear idea of how long it is going to take your business to become fully operational.
4. A personal survival plan detailing how you will survive during the initial period when your business is not actually earning you money, but costing you.
5. A contingency plan for what to do in the event that something unforeseen happens to either your business or you.
6. Details of how you intend to fund your business and, if you intend to borrow money, the plan should include details of those who you are hoping to borrow this money from together with anticipated repayment periods.
7. Profit and loss forecast where you work out how much your business is going to cost to run versus how much you're going to achieve through sales.
8. Cash flow forecast. Essential for every business because you work out how quickly and often you will receive cash into your business versus how much you will have to spend to continue trading.
9. Operational details for your business, which will include:
   - details of where your business will be based, including any additional business premises that you may need to rent (for example additional storage space for stock etc);
   - information on how many staff (if any) you will need to hire, where you intend to get these staff from and how much you're intending to pay them. (You should never rely on the goodwill of friends and relatives who offer to work for you for nothing. This is wholly unrealistic and if your business relies on others supplying their labour free of charge then you should be asking yourself if your business is really viable.)
10. SWOT analysis - what are the strengths, weaknesses, opportunities and threats facing your business?

Presenting your business plan

The golden rule when presenting your business plan to prospective lenders is that you must be completely confident with the facts, figures and projections.

Your presentation should be:

•  Clear and to the point: free of superfluous and distracting things such as jokes, anecdotes and over-familiarity.

•  So well-rehearsed that it doesn't actually sound rehearsed.

•  Convincing. Remember you're asking someone to invest money in your business, which means they are sharing in your risk. They need to be convinced you know what you're doing and that above all else you are confident that you can achieve what you are saying.