Can entrepreneurs write good business plans? No! – is the short answer.
By their very nature, entrepreneurs are usually visionary, optimistic, positive, self-assured and super-confident, but also frequently wrong about the practicality of what they can achieve within the constraints of time and a finite budget.
But – nor should accountants write business plans! Accountants generally thrive on numbers, order, rationale, logic and justification – indeed most of the attributes that would give an entrepreneur nightmares! But accountants are frequently wrong about what entrepreneurs can achieve!
So what makes a good business plan that investors can believe in? A skilled business plan needs to convey vision, confidence, optimism but also practicality and common sense. The best business plans we have seen in recent years are succinct, visionary, passionate, but also recognise that investors need to fully understand what they are investing in, how the business works, what the market dynamics are, how the business competes against its competitors, why it will grow, what its pragmatic growth prospects are, what the management expertise is and what they want to achieve, but most importantly what the numbers show and the realistic returns an investor can expect on exit. An investors’ business plan should also demonstrate that there is a clear exit strategy in a specified time frame.
So who should write business plans for investors? The simple answer is that a good business plan is a collaborative effort. It needs to encapsulate the vision and passion of the Entrepreneur with the logic and detail of the accountant, but most importantly it needs the pragmatism of seasoned business expertise and an in-depth understanding of the needs and expectations of the investor.
For further information, please contact Ken Graham at Pace Equity.