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THE ULTIMATE PITCH

23rd February 2006
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Page 58, 23rd February 2006 — THE ULTIMATE PITCH
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Which of the following most accurately describes the problem?

You know your new company has a fighting

chance — now it's time to convince others.

Louise Cole explains the business plan.

Ever heard of the four Ps? Product, price, promotion and place:These are the four basic points that you need to be able to define and express with complete clarity before you can move forward with your business.

Most of us associate business plans with a presentation to a bank manager, trying to stop our voices from shaking as we ask for large sums of money. But in truth. the business plan is as useful a document for you as for anyone else.

In our first Business Academy (CM 26 January) we looked at a feasibility study. which pinpointed how you will serve your customers, how much you will charge, where you will keep your trucks and how you will pay for it all.The feasibility study gave you a chance to see the holes in your plan — the business plan is your attempt to make those plans bullet-proof.

A business plan is a big document. It shouldn't be more than 30 pages, or people will he tempted to skim it. but it has to be long enough to cover operational, financial, marketing and compliance issues in detail.

It is an opportunity to clarify and communicate your strategy across all these areas—and to forecast problems and success.

Any problems you foresee now shouldn't sound a death knell, but forewarned is forearmed and you can come up with possible solutions well in advance.

Continual assessment

Kelvin Briggs, head of sales al \ II iance and Leicester Commercial Finance, says:"If you look at your business plan regularly you can review your performance. update your plan and always know where you stand in terms of meeting your goals. It's a tool for sitting down with the bank manager to discuss continued investment."

You should also set some financial targets for the first quarter and the first year so you can measure success.And take some time to consider where you want your business to be five years down the road.

Paul Tomkinson. director of start-up agency M&i UK,says the people his business helps fall into two categories: "There's the guy who simply wants his independence — his own truck and his own work.That's his dream. Then there are the entrepreneurs.They're the ones who say: in five years I want a grown business that I can leave to my children one Define your personal objectives and lay out

exactly what your firm will do. Make this plan clear enough for the layman to understand. It might include, for example, an undertaking to provide a reliable LOV driver with so many years' experience and a 480hp 44-tonne tractor. Then look at your business vision and long-term objectives.

From there. your business plan should analyse the market you are entering: how big it is. the number of competitors you face,and how you expect to win a share of the work. You need to know what rivals are offering and for how much, as well as what potential customers want and how you can offer that service better or more cheaply.

Demonstrate that you are aware of,and can act on, market trends.

Now look at marketing.This is the area most people feel least comfortable with selling ourselves doesn't always come naturally.

This is the point at which you might dissociate yourself from the firm, if it helps. Imagine you work fora large company a household name. You would have no problem selling this well-known firm.one you believed in -wearing the uniform.speaking positively to customers.or handing out business cards and leaflets at depots.Often people are embarrassed at the thought of marketing their own firm because they identify it closely with their own ego.

So divorce yourself from your firm. It isn't you: it's a great company you represent.

Now write down all the ways you are going to reach those potential customers. from livery to wa.,1,site.

are prepare to matc

Operational requirements

Look at your operational requirements: trucks, maintenance, premises, fuel cards, insurance. Will you have staff'? If so, you need to include a page on staff responsibilities, costs and management.

Down to the nitty-gritty. How much money do you need, and why?Tom kinson say: our experience,after a good business p banks are prepared to match customer investment pound for pound."

But your savings-account statement enough. Be prepared to show your per working budget,cash-flow projections, balance sheet. Do a break-even analysi show the minimum of work you would do to cover your costs.

We detail the key variables: how mt worked per week and weeks worked p and the average mileage driven in a da: "Ibmkinson."We'd then insert a one-pa 12-month budget showing a break-eve per mile."

You will also want a section on busin risk s.The reader needs to know that yo thought ahead and have troubleshooti strategies in place should things go wrc Address any specific concerns they ma about the firm,such as an over-depend a certain client, or partnership difficult: Remember before anyone invests in you, you need to inspire confidence that means being able to answer any q lions you are asked, Answering them i yourself in the business plan is a good preparation for any subsequent cony( tions with financiers, clients or staff. •


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