Writing a business plan

Without a solid business plan, no serious lender will be prepared to put money behind an enterprise, however good the underlying idea might seem.

Bank managers, business angels, venture capitalists and even canny family members will insist on evidence that the proposal is workable and, above all, profitable before they agree to offer backing. Committing plans to paper will also help clarify exactly what knowledge, money and market conditions will be needed to start and run a successful business. The process also helps entrepreneurs to understand what financial and personal ambitions they want to achieve, and whether those goals are realistic.

There are no unbreakable rules about how long a business plan should be or exactly what it should cover: the aim is simply to create a convincing case for the venture's viability and eventual success. What is vital, though, is to present your idea in the best possible light, so it is worth spending time making the document look professional. Always type the plan and never compress your thoughts and calculations into too small a document. At the same time, avoid unnecessary technical detail or if you cannot bear to omit it, include it in an appendix. Few financiers are fascinated by engineering or internet wizardry: what they are interested in is the bottom line.

Make sure potential backers have copies of the plan in advance of your meeting so that they have had time to consider your hard work and talent properly. Anticipate what questions or reservations might be raised and have answers prepared. It might also pay to find out what particular interests your backers have in case your idea fits with their enthusiasms.