If you’re in any way interested in business you’ll already consider this exchange from the final of The Apprentice classic TV. Margaret Mountford is grilling Jim:
Margaret: “What would you like to tell me about yourself? And try to say it without using clichés?”
Jim: “I’m exactly what it says on the tin.”
Awesome. But what struck me most about the final – apart from remembering to give Jim a ring next time I’m planning a blog on business clichés – were the business plans that the four of them prepared. I don’t wish to be unkind, but they were simply awful. One about a chair that never mentioned the word ‘chair;’ one where the figures weren’t calculated correctly and one with ludicrous projections. You could see Alan Sugar didn’t fancy handing over 250k to any of them.
What his Lordship clearly wanted to do was tell the super-organised Helen and the super-inventive Tom to work together and come back in a week with a sensible product and a concise, accurate business plan. Sadly the TV schedules don’t work like that. You could hear the Dragons sniggering.
But enough of this sniping. Supposing you need to prepare a business plan to secure some funding, either from a bank or from a potential ‘Dragon’ of your own. What does it need to contain? And how do you need to present it? Here’s an overview – I’ll look at the detail in a future blog.
The cardinal rule is to start by seeing it from the other person’s point of view – it doesn’t matter whether this is a risk assessor in a bank or Theo Paphitis. They’ll be asking themselves the same questions:
• How much does this guy want?
• How’s he proposing to repay me?
• Does he know and understand his market?
• Is he competent to do what he says he’s going to do?
Those are the questions that you need to answer. The first two are relatively straightforward. If you can’t answer ‘yes’ to number three then you should probably stop right there. Number four is interesting.
I have a huge amount of experience in marketing but could I, for example, run a hotel? I’ve stayed in enough hotels – I know the difference between a good one and a bad one. I could get the marketing exactly right. But have I ever worked in a kitchen? Have I ever had a chef walk out on Christmas Eve? Have I ever stood behind a bar at two in the morning thinking, “why don’t you damn people go to bed?”
In short, even if the figures looked good and the marketing plan was brilliant, would I lend Ed Reid the money to buy a hotel? I don’t think so.
What else does your business plan need to be? Three things, and to borrow one of Jim’s clichés, it’s as easy as ABC.
Accurate – the figures have to add up. Don’t ask me how someone can produce a spreadsheet in Excel that doesn’t add up but banking friends tell me it happens all the time. And if you’re quoting stats, they have to be right
Believable – even if you’ve come up with Facebook you’re unlikely to make a million in your first year. Everyone knows the saying, “If it seems too good to be true…” As with so many things in life, under-promise and over-deliver.
Concise – by the time you’re 40, the number of GCSE’s you have isn’t relevant. And contrary to many people’s opinion, bigger does not mean better or more believable. It just means bigger – and more scope to make mistakes.
As another well worn business saying goes, “You get what you want by helping others get what they want.” So if you want some money and the guy on the other side of the table wants a worthwhile investment, make sure your business plans says exactly that – clearly, concisely and accurately.
I’ll return to the nuts and bolts of writing a business plan in a future blog. For now, the blog and I are off to France. If you’re on holiday at the same time, have a great time – and leave the laptop at home. See you on August 5th.