Evaluate Your Business Plan
The following questions will help you evaluate your business plan.
- Do you show relevant Industry and business experience?
- Are you clear as to which products or services the business will sell?
- Have you confirmed a reliable supply of materials, products, and services?
- Have you surveyed potential customers to confirm demand?
- Have you confirmed the number of customers and the size of the market?
- Are you clear as to why a customer would buy the product or service from this business rather than from the competition?
- Are there credible pro forma financial projections, and do they show enough headroom (gross profit margin) for the business to survive, pay the bills and make a profit?
- Have you communicated a clear understanding of the Industry?
- Have you created a credible marketing plan to get the goods to the customers?
- Have you carried out both primary and secondary market research?
- Has the product or service been tested or proven by you or others?
- Are all product and service prices realistic and competitive?
- Do you have a clear understanding of your competitors?
- Have you researched and engaged an accountant, a lawyer, and a bookkeeper?
- Do you understand the major risks or threats to your business?
- Have you identified the number and type of staff required?
- Do you have the knowledge and skills to operate the business?
- Do the credit checks reveal a positive history for managing finances?
- Have you completed a detailed cash flow projection for the first 12 months?
- Have you indicated a reasonable rate of growth for Years Two and Three?
- Have you proven the business case?
- Does the plan show that you can get enough money to make the business work?
- Do the financials show that the business can repay any loans?
- Are you committing enough personal investment to the business?
- Is the available security sufficient to attract the amount of funding requested?
- Have you stated credible sources for the factual and numerical information?
- Do you or your team have enough capacity to implement this business plan?
- If you were the lender or investor, would you invest your money in this business?
- After reading this business plan, is your confidence in it high or low?
- If you were a prospective customer or client, would you purchase these products or services?
The answers to the questions above will guide you or – in the case of business plan coaches – your client, to areas that need further development, while confirming what’s already done. The answers of “no” may lead to areas that need more research or writing, depending on the reasons for doing the business plan. For example, a business plan written for one’s own learning can be less exacting, while a plan created for the purpose of attracting funding will need to be of higher quality.