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“Opinion” Why it is Imperative to Have a Well Written and Organized Business Plan


Michael Kavanagh of Ariem received a business plan from a business that was in the Greater Toronto Area. The company was looking for funding to open two new sites in various parts of the world, substantial funds to cover operating costs at these two sites, and working capital for their existing operation. The plan was originally forwarded to a major mergers and acquisition firm but was subsequently transmitted to Kavanagh as it was a funding request rather than a request to purchase or sell a business. The did forward the plan to several lenders as a favour to the client, but the response was negative.

The plan was a prepopulated form from a government lending company ironically touting itself a bank for entrepreneurs. The form was completed by the firm’s outside accountants and was over 60 pages with colour graphs and very nice pictures. Near the end of this lengthy plan, the financing program was outlined with very little detail.

Kavanagh and Shamit Khosla of Ariem jointly reviewed the plan and noted there was not much thought put into the program and little interaction between the company and the outside accountants in putting the plan together. The request for financing was scattered and, quite frankly, made no sense.

The prepopulated nature of the form also made it difficult for a proper layout. Sections were scattered so that personal net worths were followed by business forecasts. The forecasts were not realistic having no actual basis in historical results. It was not surprising that the lenders’ response was negative.

Kavanagh noted that this is hardly unique. We have seen other business plans that have been prepared and are not cohesive. The commonality to all is that they did not achieve the goal of acquiring the needed funds.

Banks and lending institutions have accelerated cost reductions to maintain or increase profitability. This drive to increase profitability is driven partly by the increased costs of regulation and scrutiny. The cost reductions are across the board staff reductions. The remaining staff are then tasked with managing more portfolios while carrying out other duties including business development. Time, which was previously in short supply, is in even shorter supply, now.

Why is this important? Account managers’ time, as noted above, is very limited. They do not have time to read disjointed, poorly organized business plans. In addition, sending a disjointed proposal to the risk management department seriously erodes the account manager’s credibility for future deals. Account managers who have poor credibility will be on the chopping block when the next rounds of cuts are planned. Therefore, there will be little or no consideration or review of a poorly prepared business plan.

Khosla advised that a clear, concise, well-organized business plan greatly increases the chances of the funding requests being approved. It also important to take the time to prepare the report including a clear outline and why the program is being presented. Before forwarding to the lenders, take the time to revisit. In addition to the basic items, care should also be taken with respect to spelling and punctuation, making sure there are no inconsistencies, especially in the numbers and, of course, proper layout is essential.

Firms, such as Ariem, that specialize in assisting businesses and preparing plans, are your best bets for your projects. These firms can provide an independent look, and can help in covering areas that are not readily noticeable to the owners who are usually too busy running their businesses.

These firms typically employ experienced people who have worked at banks or financial institutions for many years. They know what is needed to satisfy the risk management department and secure the needed funds.

Businesses need money to meet day-to-day obligations and to fund growth. Given the importance of this critical aspect, it is surprising that businesses do not treat the request with more concern and urgency as evidenced by half-thought-out business plan presentations. While there is considerable pressure to lower or keep costs constant, saving money on the preparation of a poorly prepared business plan will end up costing more than any cost to write up a plan.

It should be noted that plans don’t need to have glossy paper or multiple pages of colour photographs. The facts laid out in a logical order with the story of the business and the program will be sufficient.

With almost everyone carrying smartphones, anyone can take a picture. However, it takes a professional photographer, with the right lighting, positioning, and equipment, to present the best picture. With such a critical component for your business, seek experienced professionals that can properly present your business’s crucial request.

Remember, you don’t get a second chance to make a good first impression.


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