Thursday, July 12, 2012

Business Plan Advice

I recently received a call from a lady interested in starting her own business, and was looking for someone to help put together a business plan. She had a small amount of primary research already conducted, some of the financials completed, and a crappy business plan that a friend had produced for free to help her.

To my surprise, she had mentioned calling a few of the larger business firms in Vancouver looking for help and was turned away. I later learned that she had her first meeting with a potential investor in just under a month and wanted to pump out a business plan in time for the meeting (most business plans take 6-8 weeks to prepare and allow for revisions). My company is of course always up for interesting challenges and took on this project, no problem.

During my experience as a consultant, I have come across many interesting entrepreneurs and small business owners eager to get their share of the market. I wanted to dedicate this morning’s blog to sharing some advice with those who might be interested in starting their own business.
  • A business plan is a key essential element to helping any business succeed. You can of course operate without one, but this really helps clearly define your businesses roadmap, and where you expect to be in 6 months, 1 year, 3 years …
  • I say this to my clients all the time, most of the business plan is just filler, what investors are most interested in is your financials, and how they relate into your business plan (ie bottom line, will you make money). 
  • For companies with a larger fixed cost, you must have a clear understanding of your break even analysis
  • If you are a service based company, understand how you are going to work in the cost of HST.
  • If you don’t understand how to read a financial spreadsheet, I would recommend bringing someone with you that can answer investor questions. It really does help. 
  • Know your financial ratios, what they mean and how that relates to your business
  • It is very easy to inflate your financial figures, I like to work on a more conservative level to combat the what if situations. 
  • MAKE SURE TO HAVE A SOLID MARKETING PLAN. Marketing is a key area for any business (especially a new business), but some thrive off marketing more than others.  
  • Remember that it’s ok to not know what you are doing at first, that is what a business coach is there to help with.
My last piece of advice that is quite important is the quality of your business plan itself. Primary data is key, as it shows the ability of your company to sell to the general public (of course depending on your industry). During my career I have come across some pretty terrible business plans that show such things as the inventory turnover, a financial ratio that shows the company’s ability to move inventory. Although this is a great financial ratio, this shouldn’t show up in a business plan for service based companies with no inventory.

Please do make sure to leave a comment, and if you have any questions shoot me an email

Michelle Bucher
Marketing Consultant and Social Media Marketer

1 comment: