Management
Many investors and lenders feel the quality and experience of the management team is one of the most important factors for evaluating the potential for business success. A good business plan evaluates the skills, experiences, and resources the management team will need. Addressing those needs during implementation will go a long way towards ensuring success.
Key questions to answer:
- Who are the key leaders? What are their experiences, educational backgrounds, and skills?
- Do your key leaders have industry experience? If not, what experience do they bring to the business that is applicable?
- What duties will each position perform?
- What salary ranges will be required to attract qualified candidates for each position? What is the salary structure for the company, by position?
Management answers the “Who is in charge?” question.
Financial
When all is said and done, numbers tell the story. Bottom line results indicate the success or failure of any business. Financial projections and estimates help entrepreneurs and investors or lenders objectively evaluate a company’s potential for success. If a company seeks outside funding, comprehensive financial reports and analysis are critical.
Most business plans include four basic reports or projections:
Financial answers the “What are the numbers?” question.
A final key point to keep in mind when developing a business plan: Every business faces challenges and opportunities. A good business plan recognizes challenges exist and identifies and attempts to shows ways pitfalls or roadblocks will be overcome. Recognize competition exists and find ways to overcome that competition. If funding is an issue, identify boot-strapping or partnering opportunities. If the management team lacks critical skills, identify those skills and develop a plan to improve weaknesses or bring in advisors or other assistance. Don’t just focus on how great an idea may be; focus on what could derail an otherwise great opportunity and how those challenges can be overcome.
