Thursday night's episode of BBC One's The Apprentice centred on often the most "Aggghhhh!!! How are these people even getting selected?!" part of the Apprentice process - the presentation of business plans.
While many people will have simply enjoyed rolling their eyes and laughing at how ill-prepared the candidates were, others will have been feeling empathic anxiety.
Five-year plans. Business plans for businesses you haven't launched yet. Can't get support for a concept without a business plan, but how do you plan an idea? A fast-changing world doesn't allow for 'plans', yet people are still demanding not just that they exist, but that they're flawless - how is anyone supposed to cope?
The Productive Pessimist's Strategic Consultancy can help answer the question "what should be in a business plan?" (or a five-year plan, or any other kind of plan.)
There are also plenty of templates available online, often for free.
Let's take a look at some key questions just now:
1. How do I create a plan for an idea? I don't have any financials, or profit and loss, or anything like that
An idea without a plan is just a thought.
An idea with a plan is a concept. People can, and do, support and invest in concepts.
You won't have profit and loss accounts - but you should have a solid idea of how much it's going to cost you to pay for everything you're going to need to get started (premises, products, a website, marketing materials, professional registrations, staff, your own basic salary), and evidence-backed assumptions of how much you can sell your goods and services for (you can evidence this by citing your competitors, and justifying how you can either charge less, but will sell more, or how you can charge more).
You're not being asked to run a business with nothing until you have financials to include in a business plan - you're being asked to prove that you know what you're getting into, and how much it's going to cost, and that you are able to be rational about how much income you're likely to be able to make.
You're being asked to make sure you've shown how you're going to survive the first year, in which you may not have much, or any, income - but still have to meet your expenses.
Your being asked to prove that you genuinely understand how little of the market is going to be available to a new, unproven business.
2. What do I definitely need to do to create a great business plan?
Check on everything you've had to outsource to someone else.
Provide evidence for every assertion you make, whatever it's about.
Research the person or company you're presenting to - what have they most often supported? Are there any sectors they don't seem to support? Read their books, journal articles, blogs, and LinkedIn posts - what are they most often complaining about? What seems to impress them? Do they often talk about being busy, or complain about shallow presentations?
Tailor your business plan.
While many people will have simply enjoyed rolling their eyes and laughing at how ill-prepared the candidates were, others will have been feeling empathic anxiety.
Five-year plans. Business plans for businesses you haven't launched yet. Can't get support for a concept without a business plan, but how do you plan an idea? A fast-changing world doesn't allow for 'plans', yet people are still demanding not just that they exist, but that they're flawless - how is anyone supposed to cope?
The Productive Pessimist's Strategic Consultancy can help answer the question "what should be in a business plan?" (or a five-year plan, or any other kind of plan.)
There are also plenty of templates available online, often for free.
Let's take a look at some key questions just now:
1. How do I create a plan for an idea? I don't have any financials, or profit and loss, or anything like that
An idea without a plan is just a thought.
An idea with a plan is a concept. People can, and do, support and invest in concepts.
You won't have profit and loss accounts - but you should have a solid idea of how much it's going to cost you to pay for everything you're going to need to get started (premises, products, a website, marketing materials, professional registrations, staff, your own basic salary), and evidence-backed assumptions of how much you can sell your goods and services for (you can evidence this by citing your competitors, and justifying how you can either charge less, but will sell more, or how you can charge more).
You're not being asked to run a business with nothing until you have financials to include in a business plan - you're being asked to prove that you know what you're getting into, and how much it's going to cost, and that you are able to be rational about how much income you're likely to be able to make.
You're being asked to make sure you've shown how you're going to survive the first year, in which you may not have much, or any, income - but still have to meet your expenses.
Your being asked to prove that you genuinely understand how little of the market is going to be available to a new, unproven business.
2. What do I definitely need to do to create a great business plan?
Check on everything you've had to outsource to someone else.
Provide evidence for every assertion you make, whatever it's about.
Research the person or company you're presenting to - what have they most often supported? Are there any sectors they don't seem to support? Read their books, journal articles, blogs, and LinkedIn posts - what are they most often complaining about? What seems to impress them? Do they often talk about being busy, or complain about shallow presentations?
Tailor your business plan.
For example, Alan Sugar's team are very focused on financials - even if you're at concept stage, make sure you've covered these in depth, and that you understand them. Ensure you present "best case", "most likely case" and "worst case" - because Alan Sugar's advisors are also looking for a solid grasp of reality.
If your target investor or partner often talks about being busy, keep your presentation short, immediate-impact, and highly relevant. Start with the financials.
If they frequently complain about shallow presentations, go as deep as you can without losing your own grasp on the facts.
If your target investor or partner often talks about being busy, keep your presentation short, immediate-impact, and highly relevant. Start with the financials.
If they frequently complain about shallow presentations, go as deep as you can without losing your own grasp on the facts.
Don't present something your target won't support - despite his own entrepreneurial background, Alan Sugar rarely supports unproven concepts, and he's not a 'personality' backer - he focuses on what you can prove, not what you can do through your own persuasion.
3. But I don't understand all this finance stuff!
Then don't present your business plan until you can afford to pay someone who does understand to help you out.
Essentially, however, 'all this financial stuff' is very simple:
. How much is it going to cost to do what you want to do, at the level you want to do it at?
. How much money could you make in the best case, worst case, and most likely scenarios?
3. But I don't understand all this finance stuff!
Then don't present your business plan until you can afford to pay someone who does understand to help you out.
Essentially, however, 'all this financial stuff' is very simple:
. How much is it going to cost to do what you want to do, at the level you want to do it at?
. How much money could you make in the best case, worst case, and most likely scenarios?
. How much will go in tax and other mandatory costs? (Gov.UK is a good, free resource for information on tax, employer National Insurance contributions, and other mandatory considerations)
. How much of your income will be needed to pay essential costs - wages, rent, business rates, utilities, supplier costs, debt repayments? (Google 'average cost for...' to find utility costs, send enquiry emails to potential suppliers to get costs for them, use property sites to get ideas of rent for the type of premises you want, local authority websites will usually provide details of business rates)
. How much do you have left over?
. How are you planning to keep everything going if you don't bring in any business in your first year? (Part time job, savings, family support?)
4. I'm no good at putting things in writing - once I get talking to people, though, they always come on board. I don't need a business plan, I just need to get in front of decision makers.
Combine a business plan (which you pay someone else to produce for you) with a video presentation. Make sure you cover the financials that have been provided for you! This is your 'first contact' package, which shows not just how persuasive you can be, but also how skilled you are at identifying the team you need to support you (a core aspect of succeeding in business.)
5. But what do they even want?! These people just keep putting out posts about how everyone they ever meet is a total timewaster - it's terrifying! I don't know what to do to make sure they don't blast me for something!
What anyone who is reviewing your business plan wants is actually very straightforward.
. They want to know that you know what you're doing.
. They want to know you're aware of the market realities, and prepared for surviving them.
. They want to know that this is going to be a business (ie, it will bring in enough income to cover its own costs, including mandatory costs, as well as pay you at least £1,500 a month (the UK Government's 'Minimum Income Floor' for the self-employed when assessed for Universal Credit support) - if it can't do all of the above, it is considered a 'hobby', and you will need to explain how you're going to fund that hobby, and your basic living costs, until the hobby becomes a viable business.
If you're asking for investment - the investor/s want to know how and when they're going to get their money back.
Are you going to sell the business after a certain period?
Are you going to return their investment through other means, if you don't intend to sell?
If they want their money back, how long is the minimum period of time they'll need to wait before they can get that money?
What will the profit be for them, on their original investment?
Investment isn't a professional version of GoFundMe. Investors aren't funding your business because they like you - they're giving your business an amount of money because they believe it can become successful enough to return them significantly more than that initial investment.
If you're not 100% certain that you can create a viable business which can return a profit on top of investment, then you need to reconsider the 'investment' you're asking for.
Perhaps it's not money, but insight.
Maybe you need an injection of connections, rather than capital.
Know what you most need, and ask for that.
If you're asking for money, provide evidence that your business, in your hands, will be a good steward.
Appreciate what is being asked for in return for the investment; if an investor wants a stake in your whole business, and is offering everything you need to move forward with a new business concept - give them that stake. Because what they're seeing is that the concept doesn't yet have legs, but they could give it legs, if they were invested in the wider, more successful, business, which is likely to give them their return.
A considerable number of people who talk about how hard raising investment is are also very keen to see a 'Universal Basic Income' - often, an investor is giving you more than a UBI would provide; they have the right to take an immediate consideration in return for the risk they're prepared to take in funding your business or concept.
And Universal Basic Income isn't 'free money' - that's the government investing in people in exchange for a likely increase in tax revenues, or, in Ireland's Basic Income for the Arts case, a country (Ireland) investing in a marketable product (people go on holiday to visit art galleries, people purchase art, artists move to 'friendly' countries, where they purchase property, establish businesses, employ other people...)
Welfare assistance (such as Universal Credit in the UK) isn't even 'free money' - it's the government hedging against additional, far higher, expenses managing homelessness and its associated health problems, as well as an investment in higher VAT returns - the more VAT-rated items someone can afford to buy, the more money the government makes.
Nothing is 'free money.' Everyone who gives you anything is doing so because there's an upside for them.
When you present a business plan, you make that upside as clear and accessible as possible.
Interested in support from The Productive Pessimist Ltd now you've read this post? Email us: theproductivepessimist@yahoo.com
. How much of your income will be needed to pay essential costs - wages, rent, business rates, utilities, supplier costs, debt repayments? (Google 'average cost for...' to find utility costs, send enquiry emails to potential suppliers to get costs for them, use property sites to get ideas of rent for the type of premises you want, local authority websites will usually provide details of business rates)
. How much do you have left over?
. How are you planning to keep everything going if you don't bring in any business in your first year? (Part time job, savings, family support?)
4. I'm no good at putting things in writing - once I get talking to people, though, they always come on board. I don't need a business plan, I just need to get in front of decision makers.
Combine a business plan (which you pay someone else to produce for you) with a video presentation. Make sure you cover the financials that have been provided for you! This is your 'first contact' package, which shows not just how persuasive you can be, but also how skilled you are at identifying the team you need to support you (a core aspect of succeeding in business.)
5. But what do they even want?! These people just keep putting out posts about how everyone they ever meet is a total timewaster - it's terrifying! I don't know what to do to make sure they don't blast me for something!
What anyone who is reviewing your business plan wants is actually very straightforward.
. They want to know that you know what you're doing.
. They want to know you're aware of the market realities, and prepared for surviving them.
. They want to know that this is going to be a business (ie, it will bring in enough income to cover its own costs, including mandatory costs, as well as pay you at least £1,500 a month (the UK Government's 'Minimum Income Floor' for the self-employed when assessed for Universal Credit support) - if it can't do all of the above, it is considered a 'hobby', and you will need to explain how you're going to fund that hobby, and your basic living costs, until the hobby becomes a viable business.
If you're asking for investment - the investor/s want to know how and when they're going to get their money back.
Are you going to sell the business after a certain period?
Are you going to return their investment through other means, if you don't intend to sell?
If they want their money back, how long is the minimum period of time they'll need to wait before they can get that money?
What will the profit be for them, on their original investment?
Investment isn't a professional version of GoFundMe. Investors aren't funding your business because they like you - they're giving your business an amount of money because they believe it can become successful enough to return them significantly more than that initial investment.
If you're not 100% certain that you can create a viable business which can return a profit on top of investment, then you need to reconsider the 'investment' you're asking for.
Perhaps it's not money, but insight.
Maybe you need an injection of connections, rather than capital.
Know what you most need, and ask for that.
If you're asking for money, provide evidence that your business, in your hands, will be a good steward.
Appreciate what is being asked for in return for the investment; if an investor wants a stake in your whole business, and is offering everything you need to move forward with a new business concept - give them that stake. Because what they're seeing is that the concept doesn't yet have legs, but they could give it legs, if they were invested in the wider, more successful, business, which is likely to give them their return.
A considerable number of people who talk about how hard raising investment is are also very keen to see a 'Universal Basic Income' - often, an investor is giving you more than a UBI would provide; they have the right to take an immediate consideration in return for the risk they're prepared to take in funding your business or concept.
And Universal Basic Income isn't 'free money' - that's the government investing in people in exchange for a likely increase in tax revenues, or, in Ireland's Basic Income for the Arts case, a country (Ireland) investing in a marketable product (people go on holiday to visit art galleries, people purchase art, artists move to 'friendly' countries, where they purchase property, establish businesses, employ other people...)
Welfare assistance (such as Universal Credit in the UK) isn't even 'free money' - it's the government hedging against additional, far higher, expenses managing homelessness and its associated health problems, as well as an investment in higher VAT returns - the more VAT-rated items someone can afford to buy, the more money the government makes.
Nothing is 'free money.' Everyone who gives you anything is doing so because there's an upside for them.
When you present a business plan, you make that upside as clear and accessible as possible.
Interested in support from The Productive Pessimist Ltd now you've read this post? Email us: theproductivepessimist@yahoo.com
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