Max Soutter
If you’re in business, you have to plan for success. You
know the old saying, “to fail to plan is to plan to fail.” And of-course, if
you’re actually serious about implementing your plan, you’re going to write it
down. Any business plan not worth writing down is not worth acting on. On the
other hand, just because you’ve written down a plan, doesn’t mean it’s a good
one – or that it’ll convince the bank.
Firstly there are two kinds of business plans
The kind you write because you’re actually planning for your
business.
The kind you write to convince someone else to believe in
your vision.
The worst business plans, the ones least likely to succeed
in actual implementation are the kind written purely for the bank. In other
words, your business needs a plan, not because you’re trying to convince an
investor, but because your vision is real and you’re serious about succeeding.
A common approach in Zimbabwe and in most places is to hire a consultant to
write a business plan for you.
Warning, before you hire a business consultant: beware! Make
sure their process isn’t to simply cut and paste a template, and write the
whole thing for you. It’s faster and easier that way, but it’ll disadvantage
you. Instead your business consultant’s role should be to help YOU write your
own plan, not write it for you.
You see, a mega benefit of writing a business plan is the
incredible mental clarity it brings to you. That clarity will affect your
confidence, decision making and daily agenda is a way that you wouldn’t
believe. Personally going through the process of writing down a full business
plan forces you to crystallize your thoughts and insights in an amazing way.
That kind of mental clarity is what separates top entrepreneurs from the rest
but it’s not for the lazy.
In Zimbabwe now there are very many business consultants
claiming expertise in all kinds of things, be sure that whoever you choose to
hire is made of the right stuff.
Laughing all the way to the bank?
Once you have absolute clarity on your business and your
plan for the business, you need to communicate it to others effectively. If a
business investor or any local bank in Zimbabwe is going to give you a loan, then
they expect several basics from you…
1) Prove that the opportunity is genuine. That means you
need market data. Just because no one else is selling a certain kind of
technology doesn’t mean there’s an opportunity there because they may be no
demand for that particular solution. On the other hand, if you can show an
investor a real, reliable and long-term trend that’s creating a whole in the
market that you can fill…you’re off to a good start.
2) Demonstrate that your team is capable of success. Show how
your team is well able to implement this plan and make a success of this
business opportunity. Talk about relevant experience, past successes and
anything that gives your team the believability you need to reduce the risk in
the mind of the investor.
3) That when they do, the revenue will outweigh the
investment made. At every one of these three stages, you are showing the reader
of your business plan that the risk of giving you the money is low and the
reward is high. Think in these terms, because that’s what it comes down to.
This is where your marketing needs to weigh in. In most cases, I’d consider the
marketing plan the most important part of the whole plan, after all, nothing
else matters if you can’t get a customer.
4) What happens if our plan doesn’t work? There’s a really
high chance that no matter how good your plan is, it may not work. Don’t resist
this reality, embrace it. Perhaps you overestimated the demand, underestimated
the costs or forgot to estimate the competition – for whatever reason your plan
may fail. It’s smart business to have a plan B. The more flexibility or
adaptability your plan has the better and the higher the chances of success.
Smart investors or potential partners want to see this. If absolutely
everything in your plan has to go right for your ultimate success, then you
have a poor plan. Think again.
5) Collateral. Ultimately, if you’re dealing with a bank, or
any conventional investor or money lender, they want to see some collateral.
Collateral basically means ‘what can you offer as a guarantee for your loan’. A
house, a piece of property, some sort of valuables – anything that far exceeds
the value of your loan and can be easily sold to recover the money you’ve
failed to pay back.
Of-course, it’s really collateral that keeps most people
from being able to get a loan in the first place. I mean if you had a half a
million dollar house to guarantee a loan, you probably wouldn’t need the loan
in the first place right?!
For this reason, I urge entrepreneurs to be a little more
creative than just going to the bank. Banks don’t make their money by risking
money to your dream come true, they make it by avoiding as much risk as
possible.
If you’re creative, and educated on how to present and
persuade, then you’ll find that you often have many more options than a bank
loan. Options that will often give you much better and easier pay-back terms.
As far as the actual writing of your business plan goes,
remember the following
Make sure your plan/ idea is well thought out
Write clearly and concisely
Use a clear and logical structure throughout
And that’s it (for now). Using the information above, you
more effectively plan and present a plan for your business.
Yours for smarter business,
Max Soutter is the founder of the Business Setup Group. An
organization dedicated to helping entrepreneurs start-up and grow businesses
the smart way. He blogs at http://bizsetup.wordpress.com where this article
appeared first. Email Max directly on max.soutter@gmail.com for help with your
business setup, internet marketing strategy or corporate marketing efforts
Comments
Post a Comment