06 March 2006

The perils of planning

We were recently asked to review a plan for a business importing a manufactured product for a leisure application. The company had spent some time on developing the plan and had been disappointed that it had not generated any interest from lenders or equity investors.

As soon as we started to read it, we could understand why it hadn't generated a response. The plan had a number of issues which provide a neat illustration of the problems that can be encountered in writing one:
  • there was only a single plan although it was being sent out to two different audiences – indeed, it wasn’t clear which audience it had been written for since it didn’t appear to meet the needs of either a banker or an equity investor
  • the document had been produced by more than 1 person and the different sections didn’t relate easily to one another
  • although the business model appeared sound (buy at £x and sell at £y), the sales plan relied on a sales channel with a high degree of risk

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