CONTENTS vii
Contents
About the author v
Acknowledgements vi
Foreword xii
Introduction to the First Edition xvii
Introduction to the Revised Second Edition xx
Introduction to the Third Edition xxii
Symbols used xxiv
1 What’s it all about? 1
Have you heard the one about … 3
Who should read this book 5
A quick x or a longer-term tool? 6
What is a plan anyway? 8
Why bother? 9
Key objectives for your plan 10
Your target audience 12
Ten steps to a successful business plan 13
Don’t trust consultants 17
Who writes the business plan? 18
How to use this book 19
2 A winning presentation 23
A concise communication 25
Computer software 25
Make it feel good 27
First thoughts on layout 27
Creating an outline document 30
3 Getting down to it 39
Why? 41
When you don’t want to be a big sh 42
What to do if you have several businesses 44
viii CONTENTS
Your list of contents 45
The executive summary 47
The conclusion 50
Responsibilities – and the timetable 50
Be a SWOT 52
Where now? 54
4 Know yourself 55
Taking stock 57
Start with the basics 57
The central objective 59
Are you visionary? 61
How did you arrive here? 65
Some numbers to please the bankers 65
Building up value 67
The all-important management team 70
Business organisation 71
Business infrastructure 76
Products and services 77
Core competencies 78
The next step 80
5 Know the world 81
For or against you? 83
The next steps 84
Collecting information 85
Understanding the world at large 89
Business partners 94
The market – what you are ghting for 96
The industry – what you are up against 100
Competitive advantages 103
Now write about it 105
Moving on 105
6 The core of your plan 107
A strategy and an operating plan 109
What is strategy? 110
Portfolio strategy – what businesses should you have? 111
Business strategies to satisfy your desires 114
CONTENTS ix
Strategies for department managers 119
Resource requirements 127
Strategic objectives 127
Documenting the strategy 129
Creating an operating plan 129
Documenting the operating plan 134
Onwards 135
7 About these numbers 137
‘The time has come,’ the walrus said, ‘to speak of other things’ 139
Varying views of the same numbers 140
The way that bean counters think 144
The planning horizon 149
Looking back 152
Estimating the present 152
Crystal ball gazing 153
Software tools 154
Putting it to good use 156
8 Getting to gross prot 159
Breathe easily 161
Forecasting sales volumes 162
The big picture – the economy 165
Up close and personal – industry and product demand 170
Pulling it all together 174
Cost of sales 176
Gross prot 184
Writing it up 184
9 Getting to net prot 189
Where the money goes 191
Capital spending 192
Capital assets that you already own 193
Capital assets that you want 195
Accounting for xed assets 198
Operating expenditure 202
Net prot 211
Other income and expenditure 216
Moving on 218
10 Funding the business 219
Balancing your cheque book 221
Balance sheets and cash ow mechanics 222
Balance sheet headings 228
Producing the paper 232
Watching cash ow 233
Using a surplus 239
Getting it funded 239
Debt or equity? 240
What’s the deal? 247
Putting a price on success 248
Does it all hold together? 249
11 Managing risks 251
Identify risks and improve planning 253
It’s normally like this 256
How many coconuts do you need to sell? 264
Marginal likelihood of shutting down? 267
What you need, when you need it 270
Will it pay o? 271
What if? 279
The economy 281
If the worst comes to the worst ... 281
Grand nale 282
12 Getting it approved 283
Pulling it all together 285
Focus 286
What readers of the plan will look for 288
Those nancials again 293
Final check on the plan 303
They don’t know what’s coming to them 303
Preparing for the meeting 307
At last, the rst meeting 308
Meeting post-mortems 311
Follow up 311
Back to the drawing board 312
Due diligence 313
The contract 314
Cash in the bank 315
x CONTENTS
CONTENTS xi
13 Now make it happen 317
Time for a break? 319
From plan to reality 319
A change of focus 322
Communicating the plan 323
Where do you draw the line? 324
Policies, rules and procedures 325
Who does what? 328
Employee objectives 329
How much freedom? 331
Financial objectives 331
Monitoring other objectives 337
Monitoring the world 338
Conrming and revising strategy and plans 338
Don’t forget the carrots 339
And into the next business plan 340
Trying to catch the tail 340
Appendix A Tetrylus Inc business plan 341
Index 347
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