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Start Your Own Business – How a financier reads a business plan

A continuation of our ‘Start your Own Business‘ series,   In an extract from his book in Sunday Business Post 25/4/2010, Starting a Business in Ireland, Brian O’Kane continues on with advice on how Lenders  and how they asses the worth of your Business Plan.

How a financier reads a business plan

How financiers read a business plan depends on what kind of financier they are. There are two types of financier: the lender and the investor. The lender is typically your bank manager.

Lenders will invest money in your business if they think it worth doing so by their criteria, in return for interest on the capital. The professional investor, on the other hand, will invest equity in your business and share in your risk as owner of the business.

Professional investors will postpone their return for a period -typically three to five years – but will look for an above-average return for the risk involved in doing so.

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Start your own Business – A standard Business Plan format

A continuation of our ‘Start your Own Business‘ series,   In an extract from his book in Sunday Business Post 25/4/2010, Starting a Business in Ireland, Brian O’Kane continues on with advice  on the format of your Business Plan.

A standard business plan format
Each business plan is unique. However, those whom you seek to convince to invest in your project have come to expect certain information in a broadly standard format that presents information in an easily digested logical sequence.

For a very small or simple business, the following intuitive format – adapted from Applying the Rules of Business (Steps to Entrepreneurship series), by Ron Immink & Brian O’Kane, Oak Tree Press – may be sufficient.]
You need to cover all the information that a reader of a business plan is likely to want to know in order to come to a decision on the plan. and ensure that you have fully thought through all aspects of your business.

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Start your own Business – Business models and projected figures

A continuation of our ‘Start your Own Business‘ series,   In an extract from his book in Sunday Business Post 25/4/2010, Starting a Business in Ireland, Brian O’Kane continues on with advice on Business Models & Projected Figures.

A financial model of the business is effectively a set of accounts, represented on computer spreadsheets or in a dedicated modelling package for ease of manipulation – for example, Business Plan Pro from Palo Alto Software.

While a financial model is useful for businesses of all sizes, it is essential for a business of any complexity. Your model should enable you to change certain variables – such as the number of units of product sold, the price at which you sell them or the cost of supplies – and discover what the effect will be on the business.
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Start your own Business – Who should write your business plan?

A continuation of our ‘Start your Own Business‘ series,   In an extract from his book in Sunday Business Post 25/4/2010, Starting a Business in Ireland, Brian O’Kane continues on with advice on writing your business plan.

Very simply: you.

No one else. You may receive offers from consultants, many of them highly reputable and professional in their work, to write your business plan for you.

They will quote their extensive experience of business, of raising finance for start-up businesses, of presenting financial information – all valid points and, in many cases, true.

However, whatever experience consultants may have of business in general – and drafting business plans in particular – they lack one essential ingredient: your intimate relationship with your business.

You are the one who has spent your waking hours – and many of your sleeping ones, too – dreaming, planning and guiding your tender and frail creation to this point.

You know what makes you tick, what makes your team tick and what will and won’t work for you.

Only you can assemble these thoughts. Therefore, the first draft of the business plan is your responsibility. Do it yourself. Refine and redraft it – again, and again, if necessary – until it’s finished. Then – and only then – should you entrust it to someone who can put the right gloss on it. But let them do only that. Don’t let them put their words on your pages.

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Start your Own Business – Establishing the viability of your project

A continuation of our ‘Start your Own Business‘ series,   In an extract from his book in Sunday Business Post 25/4/2010, Starting a Business in Ireland, Brian O’Kane asses the viability of your project and the role a business plan has to play in this.

There are plenty of ways of researching whether your project will succeed. All, however, finally require an act of faith from the entrepreneur when the time comes to commit to the business. Before this point is reached, a great deal of planning and careful thought should have been completed.

A well prepared business plan will assist immeasurably with that process simply through the discipline it imposes. Too often, entrepreneurs are carried away with their own enthusiasm. They neglect the most cursory checks on the viability of their idea. (more…)

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