There are major “traps” to avoid when preparing your Business Plan whether you are an expanding, successful business or launching a start-up, no matter the size of your expectations. Our experienced business consulting team will guide and coach you to avoid these traps and more, thereby limiting the time and money you spend to achieve your goals.
1) You may use templates, which usually provide too much unnecessary information, when Sections and Subsections of the Business Plan would better fit your business. When companies hire business consultants to finish their Plans, editing, removing, and/or inserting appropriate language in the Sections can often involve as much if not more work than starting from scratch. While templates are better than nothing, they typically fall far short of your business needs, resulting in a Business Plan that does not reach the company’s goals, which typically involve funding.
2) When seeking access to capital, most investors or lenders only want to read an Executive Summary, and then, if interested, they will ask for the complete Business Plan. For start-ups and existing companies with established relationships and a good existing bottom line, an Executive Summary and a short version of the Business Plan are often enough. The complete Business Plan and more specific details can follow if needed.
3) Business Plans from Green Business Plans to Technology Business Plans are often too long and are missing a concise Executive Summary, which needs to be a standalone document that can be separated from the Business Plan.
4) You are so close to your business that it is easy to assume others know the same important details about your industry and company. Thus, you may not appropriately or sufficiently define items such as the competition or industry resources in your Business Plan or Executive Summary.
5) Internal financial projections usually fall far short in meeting the needs and expectations of either a senior executive at a lender and his “bean-counter” or an investor and his trusted accountant. See Forecast and Financial Presentation and Uses of Funds for more information on the expectations of investors and lenders.Projections almost always have to be revised a number of times based on input from lenders, investors, and their accountants and consultants. Utilizing the appropriate format and providing sufficient details and notes on the utilized assumptions will allow edits and revisions on an expedited basis that can suit a single investor or bank and result in a quick turnaround once there is an expressed interest. We will ensure that you avoid the trap of insufficient detail and inappropriate formatting in Excel worksheets and customize the data to present your strengths to the best advantage...and convey your financial message.
6) Market Share, Market Penetration and Competitive Analysis almost always fall far short of the type of depth analysis investors expect in plans we receive.
7) When you have collateral and are seeking debt, it is usually straightforward. However, equity placements, where there are potentially many investors, require an experienced consultant and a securities attorney of substance. If you are targeting a single or few investors, the rules and the content of the Business Plan change. Sections of the Plan such as ROI, Exit Strategy, and Risk Factors often fall far short, leaving you at risk of insufficient disclosure.
8) “How much of the company do I need to give up in order to raise the capital that is needed to accomplish my business goals or mission?” That is a tough question, and few answer it correctly because they are either too close or too confident to properly analyze the risk factors and thus do not offer enough equity to get funded, or, worse yet, they offer too much when their plan dictates otherwise.
9) About Your Team - We have seen many companies offering new technology, existing services needed in a defined market, or other viable businesses that are led by a “One Man Band,” a sole proprietor who either does not have key employee support to grow the business or lacks even key man insurance. Then there are established companies that are seeking to grow their business into new markets or offer new products or services without sufficient new staff reflected in their Projections or Business Plan supported by bios and/or attached resumes. Ask us to help you complete your senior management team.
10) All lenders and investors have varied expectations about when and how they receive an initial package of information. It might include an Executive Summary only, an ES with Uses for Funds Schedule and Summary Projections, or a complete Plan that may include a Market Study and many other Exhibits. Do not overwhelm interested investors or lenders with too much information. An ES and BP can easily be structured to be provided on a staged basis depending on the expressed interest level. They can be provided in hard copy and/or PDF files, depending on the wishes of an interested party.
