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how to present a business plan

1. What is a Business plan?

Preparing a solid business plan is the key to securing funding. A robust business plan helps potential lenders or investors understand the vision and goals of the business. It also brings focus to management’s understanding of the business strategy. It helps them understand the risks inherent in the strategy and the impact of any deviations from their plan – particularly
when it comes to funding.

2. Purpose of a business plan

A business plan’s main purpose when raising finance is to market your business proposal. It should show potential investors that if they invest in your business, you and your team will give them a unique opportunity to participate in making an excellent return.

A business plan should be considered an essential document for owners and management to formally assess market needs and the competition; review the business’ strengths and weaknesses, and identify its critical success factors and what must be done to achieve profitable growth. It can be used to consider and reorganise internal financing and to agree and set targets for you and your management team. It should be reviewed regularly

how to present a business plan

3. How to write a Business Plan

Bear the following points in mind when you are writing your business plan.

(a) Readability

Make the plan readable. Avoid jargon and general position statements. Use plain English – especially if you are explaining technical details. Aim it at nonspecialists, emphasising its financial viability. Avoid including unnecessary detail and prevent the plan from becoming too lengthy. Put detail into appendices. Ask someone outside the company to check it for clarity and “readability”. Remember that the readers targeted will be potential investors. They will need to be convinced of the company’s commercial viability and competitive edge and will be particularly looking to see the potential for making a good return. How to present a business plan.

(b) Length

The length of your business plan depends on individual circumstances. It should be long enough to cover the subject adequately and short enough to maintain interest. For a multi-million $ technology company with sophisticated research and manufacturing elements, the business plan could be well over 50 pages including appendices. By contrast, a proposal for $500,000 to develop an existing product may be too long at 20 pages. It is probably best to err on the side of brevity – for if investors are interested they can always call you to ask for additional information. Unless your business requires several million pounds of private equity and is highly complex, we would recommend the business plan should be no longer than 25 pages. How to present a business plan.

(c) Appearance

Use graphs and charts to illustrate and simplify complicated information. Use titles and sub-titles to divide different subject matters. Ensure it is neatly typed or printed without spelling, typing or grammar mistakes – these have a disproportionately negative impact. Yet avoid very expensive documentation, as this might suggest unnecessary waste and extravagance. How to present a business plan.

4. What to include in a business plan?

The information to be presented in a business plan will depend on the target audience, but it should generally incorporate:

  • an executive summary, highlighting the main points, designed to grab the attention of potential lenders or investors;
  • details of key personnel, their responsibilities, skills and experience;
  • market analysis of the company, its products or services and its competitors;
  • details of current and intended client base;
  • a marketing plan targeting new or existing customers;
  • historical financial information covering the last three years of trading (if available)- accounts (audited if available), and key accounting ratios;
  • cash-flow data, including information about standard payment terms and typical debt turn;
  • financial forecasts for the next three to five years, presented as historical information, and highlighting the key underlying assumptions;
  • cash-flow forecasts covering the next two to three years (or in the case of a start-up or turnaround, until the business moves into profit), clearly highlighting the amount of funding required;
  • how creditors, capital expenditure, debtors and stock will be managed over the forecast period;
  • additional ‘flexed’ forecasts showing the impact of key downside scenarios, such as sales targets not being met or cost savings taking longer to come on stream, may also be included, or if required, must be included; and
  • how equity investors can exit or refinance the business, and realise their investment.
5. Owner capital commitments

It must be clear how much of the existing owner’s money is committed to the business. If a lender or investor thinks the existing owner does not have enough ‘skin in the game’, securing a loan or investment is likely to be more difficult, if not impossible. The business should consider whether investors would be eligible for tax relief and ensure that it communicates this in the business plan. The amount of any backing already received from other banks or investors must be clearly stated. This can demonstrate the attractiveness of the business as an investment.

6. Debt financing scenario

If a business is looking for debt finance the plan needs to demonstrate how the business will be able to both meet interest payments and repay the capital element over the period of the loan. A repayment schedule linked to the forecasts will make this clear. And when looking for equity, the plan will need to show how the potential shareholder would receive dividends and how the value of the business and therefore their stake would grow.

The plan should always be ‘fully funded’ – with sufficient headroom so that the whole process will not have to be revisited too soon. Whether it is short-term debt finance or long-term growth capital, different equity investors and different debt providers will all have specific requirements when it comes to the content of business plans.

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