Planning A Business? Here's How To Do It Right
This is a review of the book How to write a business plan by Brian Finch (KoganPage Creating Success Series), 4th Edition, 2013.
If you want to start your own business, you should not only have a clear picture of where you want to take it, but also of how to get there exactly. This is one of the first rules that Brian Finch explains in his book How to Write a Business Plan:
The vision is not enough (p.2).
And there is another important rule: Nobody can write your business plan for you. As a founder, you are the one who needs to know the company by heart, to win over investors, employees and customers alike, by convincing them with your knowledge, preparedness and business logic.
That said, Finch takes readers by the hand and shows them exactly how to go about this task. He starts by outlining the typical structure of a business plan and then explains – chapter by chapter – what the corresponding part of your own plan must include. At the end of every chapter he summarizes the three most important learnings, to help you ask yourself the right questions when you are drafting your own business plan.
Importance of the Management Team
Important elements of the business plan that Finch covers are the business background, market situation, operations and management. For Finch, the management team is crucial in winning over other people’s (financial) support:
Research shows that the most important factor for investors in evaluating a proposal is the management team they back (p. 55).
It is important to show that you have a good and able team at your side. And it is also important to have a team at all, since it demonstrates that other people believe in your vision and your ability to make it come true. “Most venture capital companies are reluctant to back one-man or one-woman deals,” says Finch and quotes a venture capitalist saying “Who would put all that money behind one person’s judgement?” (p. 59).
What you need a business plan for
Finch dedicates several chapters to financial planning and forecasting, since “every business plan needs financial information to back up the words” (p. 109). He shows how you can use your business plan to win over investors and other people you need to help you realise your business vision, or to improve your business’s performance by optimizing your planning. In the last chapter, he also outlines how your business plan – with some small adaptions – can help you sell your business.
If you have already founded a business before or are at least very familiar with the subject, you might find this book a little too basic. It is specifically aimed at people who want to “get it right first time”, as is said on the cover. A view into the included glossary illustrates what I mean: it explains words like start-up, break-even, entrepreneur or public domain. Also it is important to know that the book is primarily written for UK readers.
However, if you have just decided to found a business and now need to build a framework around your initial vision, How to write a business plan by Brian Finch is a great book for you. It will give you the practical advice you need and will help you avoid the typical beginners’ mistakes. And even for advanced founders, it should prove very helpful: for checking back on the questions you need to be able to answer when you want people to back you – no matter what stage your company is at.
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