The business plan (or business plan) is a summary document that aims to convince the interest of a project. In the company, the project promoters submit it to an investment committee, the managers of subsidiaries to the management of their group. The sellers present it to prospective buyers, the chief financial officer to funders.
8 keys to Convince Your Clients
The “8 keys to convince” constitute the frame of the business plan; they allow the project leader to structure his reflection and his presentation.
- The Project is Coherent with the Environment, the Business and the Strategy of the Company
The external strategic analysis describes, in particular, the forces in the market (evolution of demand, study of competitors, regulation, substitute products, etc.) and leads to a statement of opportunities and threats. The internal analysis traces the strengths and weaknesses of the company. It is necessary to convince that the company has the key factors of success to succeed the project.
- Realistic and well-argued Activity Forecasts
They are a realistic goal given the size of the market and the company’s market position. They are based on objective market data (market studies).
- The Business Model is Defined and the Operational Action plans are Mastered
The main action plans of the project (investments, human resources, commercial development,) are mastered. The written support constitutes a summary of the project and obviously cannot contain a detailed description of all these action plans. During the oral presentation, the decision-makers will not fail to ask some questions unexpectedly to test their mastery.
- Different Scenarios Indicate that the Project has been Matured
The different scenarios focus on how the company is organized in different revenue assumptions, high, medium or low. They also relate to different modes of organization: do or outsource. The presentation of different alternatives (production, logistics, marketing,) shows that the project was matured.
- The Project is Economically Profitable
The financial summary follows from the previous points. Before financing, the project’s economic (or intrinsic) profitability meets the investors’ requirements defined on the profitability criteria (payback period, net present value, internal rate of return, profitability index).
- The Financing is Controlled and the Project Profitable for the Shareholder
The need for funding is properly assessed and the project proponents present a balanced financial forecast. The financial profitability resulting from economic profitability and financing choices (leverage effect) corresponds to the level expected by investors.
- The main Risks are Identified, put Under Control & Acceptable
No project without risk (operational, market, regulatory,), so no business plan without risk analysis. The business plan assesses the risks by calculating the break-even point, year by year, a sensitivity analysis, the application of several scenarios and finally the reversibility analysis which gives the value of the “breakage” of the project.
- A Report Aimed at Investors
Finally Investors, internal or external, benefit from a reporting framework allowing them to follow the progress of the implementation of the project and its exploitation.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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