Three key elements in B-Plan writing

A business plan or B-Plan as it is popularly referred to as, is an essential starting point for any venture. It is meant to describe the idea, context (need, assumptions, competition etc) along with the delivery model and the requirements for the model.

The B-Plan is often mentioned in the context of a new venture and that too from a fund raising perspective. However the B-Plan can have many other utilities other than fund raise. Irrespective of the fund raise objective, a B-Plan can certainly help crystalize the thoughts of the entrepreneur, bring out an agreement amongst co-promoters and articulate the vision, business model and fund requirements in a cohesive manner.  In that context, a B-plan is also relevant for any existing venture or any expansion project.

What constitutes a good B-Plan? There a number of templates available on the net and each person may have a different way of presenting his or her concept including the financial projections. However, the design or format is important to the extent that it is comprehensive, easy to present or understand and impressive & effective for the purpose it is made for.

In the fund raising context, I have often seen people commenting that a particular B-Plan lacks vision. Or it is too limited, not very exciting etc. Or it is too bold, creative or imaginative.
If the key objective of the B-Plan is the articulate the promoter’s vision, communicate the business requirement and convince a potential investor, then a good B-Plan is a function of the following three factors

Imagination: The entrepreneur needs to imagine the future. He or she should be able to envisage the various possibilities or directions to which the venture can progress. Indeed it is true that as you walk few steps, new pathways emerge. However, failure to imagine the possibilities can deprive the B-Plan about the vision, size and the most coveted thing in a fund raising situation – ‘valuation’.

Articulation: Imagination has little meaning until is properly articulated. Since the purpose of the B-plan is to communicate the vision and create a consensus, effective articulation is very critical. Converting a ‘gut feeling’ to a proper written concept requires good language skills and research. At times, the promoter has very good ‘sense’ about the opportunity based on his experience and insight. However, unless, he or she articulates the ‘opportunity’ in all its dimensions, it will not make an impact. The business potential needs to be expressed in terms of the products, markets, customers and expected revenue & costs over a certain period. This requires a good amount of research, experience and skill.

Defendability: This is final gate which acts like a control and guide for the ‘Imagination’ and ‘Articulation’. An uncontrolled imagination can create a very idealistic dream world. Imagination has no boundaries. Hence it needs to be subjected to rigorous questioning and analysis in order to make it ‘defendable’. People are often looking for proof points or evidences to draw a trend. Or they need a ‘business-model’ to comprehend and judge if and how the vision will reach the reality. Unless, the promoter defends the b-plan from all sorts of logical and at times illogical questions, he or she will not be able to convince the other person.

Defending a b-plan can be quite a frustrating experience for the promoter. Many people will not be able to understand or relate with or believe in the vision of the promoter. This is quite natural and expected because the ‘idea’ is new, unique and not tried before. Hence all the proof points or answers are not likely to be there. Plus the ‘analysts’ have a bias for evidence while the entrepreneur is not bound by the past. He or she is envisioning and creating the future.  And in order to do so, he or she needs to use his articulation and convincing ability to bring consensus amongst his co-promoters, team members or investors.

The feedback of the team members and investors is an important ingredient for making the b-plan better and better. Each feedback can trigger further ‘imagination’, improve the ‘articulation’ or suggest points for ‘defending’ it better.

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