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FAQ'S
 
   
     
     
     
     
     
     
     
 
   

FAQ'S

Business Planning

What is a Business Plan?
Why do I need a Business Plan?
What sections are typically included?
What if I don't have all the information?
How long is a Business Plan?
How often do I need to review my Business Plan?
When should I write a Business Plan?
Can I get by without a Business Plan?
What are the elements of a good Business Plan?
What are some of the reasons an investor might reject an opportunity based on the Business Plan?
Should I hire someone to write my Business Plan for me?


What is a Business Plan?
Every business, big or small, is charged with generating a return to its shareholders. A Business Plan details how a business will maximise these returns. More than just a document however, a Business Plan is a plan of action, clearly describing where a business is heading and how it will get there.

Why do I need a Business Plan?
It is easy for management to get bogged down in the day to day operations of a business. Going through the process of Business Planning helps businesses take a strategic position to capitalise on opportunities, neutralise threats and outcompete rivals in the marketplace.

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What sections are typically included?
This depends on the particular opportunity and stage of development but a Business Plan typically includes:
Executive Summary
Company objectives and profile
Product or service description
Industry and market analysis
Marketing (sales and distribution)
Management team and track record
Production and operations
Realisation plan, risks and assumptions
Financial planning
An offer (if seeking external investment)

What if I don't have all the information?
The business planning process helps identify the in your knowledge about the opportunity. If some sections of the Business Plan are underdeveloped, this indicates there are areas that require further investigation before moving ahead or seeking external investment. It is impossible to have all the required information and therefore strategic planning must be based upon assumptions made using the best information available; the strength of those assumptions determines the strength of the strategy moving forward. The more that these assumptions can be based on thorough and accurate market research, the stronger they will be and the more confident the business can be in planning its strategy.

How long is a Business Plan?
The length of a business plan is highly dependent on the type of opportunity and stage of development. It is critical that the business plan is comprehensive, without being overly detailed or onerous to read. Most business plans are around 40-50 pages in length.

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How often do I need to review my Business Plan?
Business plans should never be written and then left on the shelf. The plan should be used to monitor and track the performance of a business. As new information comes to hand that impacts on strategy, this should be incorporated into the plan. Practically, this means that business plans tend to require updating quarterly or half yearly, and should never be left untouched for longer than a year. The more frequent and/or dramatic the changes that occur in relation to the business, the more often the plan will need to be revised.

When should I write a Business Plan?
Anyone considering starting a business should first write a business plan. Furthermore, any existing business entering a new market, launching a new product or facing major changes to their market or industry should have an up-to-date business plan. Going through this process can help avoid costly mistakes caused by lack of planning and is useful to identify weaknesses in your business that may need addressing before you proceed too far.

Can I get by without a Business Plan?
While it may not be absolutely necessary to have a business plan and many ‘lifestyle’ businesses operate without one, businesses attempting to commercialise new technologies should not neglect this planning process. Commercialisation of new technologies is particularly high risk, often requires substantial capital investment from third parties and there are many potential pitfalls along the commercialisation pathway that can only be avoided through careful strategic planning. The planning process will identify many of these risks and allow to the business to put strategies in place that avoid or mitigate them where possible. Furthermore, engaging with key members of the management team during the process ensures the business, as a whole, is aligned in terms of its direction and goals.

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What are the elements of a good Business Plan?
Good business plans are those that clearly communicate the uniqueness of the product or service and the action plan that will be used to bring that product or service to market. Good plans demonstrate that you have both the passion and the skills necessary to be a success. Finally a good plan clearly demonstrates the potential for strong financial returns within a reasonable timeframe, along with a plan for mitigating potential risks along the way.

What are some of the reasons an investor might reject an opportunity based on the business plan?
The vast majority of Business Plans submitted to investors don’t lead to the business getting funded. Typical reasons for rejection include:
Poor presentation giving a poor first impression
Undeveloped opportunity and poor understanding of the market
People – an incomplete or inadequate team
Unrealistic company valuations and control issues
Unrealistic revenue projections
Lack of a sustainable competitive advantage
Unrealistic budget and timeframes
Lack of transparency

Should I hire someone to write my Business Plan for me?
A Business Plan must reflect the unique nature of your business and reflect your goals. It is almost impossible for someone who has no knowledge of your business to write your business plan for you, without substantial input from you. That being said, business planning is a complex process and one that can benefit immensely from external assistance from consultants who are familiar with the commercialisation process and its many pitfalls! Commercialisation consultants can also evaluate your opportunity more objectively than someone who is directly involved in the business and are typically more in tune with the criteria professional investors use to evaluate business plans.

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