Business Plans

Overview

A business plan sets out where a business is today, where it intends to go and how it will get there, together with the resources and funding that journey requires. Investors, lenders, boards and management teams all use it, but for different reasons, so it has to stand up to scrutiny from each of them.

A credible plan connects its strategy to its numbers. We prepare plans in which the market analysis, the operating assumptions and the financial projections are consistent with one another, so that every claim in the narrative can be traced to a forecast and every forecast to a reasoned assumption.

What the service covers

The plan is structured around the questions that readers will ask, and typically includes:

• An executive summary giving the proposition, the opportunity and the funding requirement.
• The business model, products or services, customers and revenue streams.
• Market overview, competitive position and the assumptions about demand and pricing.
• Strategy and growth initiatives, with milestones and timing.
• The operating plan, covering people, capacity, technology and capital expenditure.
• Integrated financial projections for profit, cash flow and balance sheet, with scenarios.
• Funding requirement, use of proceeds and, where relevant, debt service capacity and the expected return to investors.
• Key risks and the actions that mitigate them.

Key activities and deliverables

Key activities

• Agree the audience, the purpose and the funding objective of the plan.
• Work with management to define the strategy, the targets and the operating model.
• Gather market and benchmarking evidence from credible published sources and test the demand and pricing assumptions.
• Build the financial model from operating drivers and calibrate it against historical results.
• Draft the narrative, the supporting tables and the charts, in a consistent voice.
• Review the draft with management and update it for challenge, including questions from investors or lenders.

Deliverables

• A complete business plan document, formatted for its intended readers.
• A supporting financial model with scenarios and a summary of key outputs.
• A schedule of assumptions with their sources and rationale.
• A funding summary, showing the requirement, timing and use of funds.
• A shorter summary version, where a first-stage submission or a board paper is required.

Our approach and methodology

We begin with the decision the plan is meant to support. A plan for a bank supports a credit decision and so concentrates on cash generation and repayment capacity. A plan for an equity investor concentrates on growth, scalability and return. A plan for a board focuses on strategy and resource allocation. The content and emphasis follow from that purpose.

Assumptions are management's, and we make sure they are evidenced and realistic. We compare them with historical performance and with external benchmarks, we challenge those that look optimistic and we present downside as well as base cases. The result is a plan that readers can test, rather than one they are asked to take on trust.

Benefits for clients

• A clear, consistent case for funding that stands up to detailed questioning.
• Alignment between strategy, operations and financial targets within the management team.
• Credibility with lenders and investors, gained through evidence-based assumptions and a visible downside case.
• A realistic funding requirement and timetable, avoiding raising too little or too late.
• A living reference document that can be used to track performance against plan.

Who needs this service

A well-prepared business plan helps:

• Growing companies seeking equity investment or debt financing.
• Founders and management teams preparing for a funding round, a buy-out or an expansion.
• Boards setting strategy and approving a multi-year budget.
• New ventures and new business lines that need to demonstrate viability.
• Companies applying for grants, facilities or licences that require a supporting plan.