Planning – Approvals

There are of course two angles to the approvals issue. Are you approving – or looking for approval?

If you are approving, you are going to asking hard questions – especially those related to the six key pages in a business plan.

If you are looking for approval, try to put yourself in the position of the reviewers. You will be seeking either:

• internal approval for the strategy and plan (perhaps in competition with another department) – which tends to imply automatic funding; or
• external funding

The following figure, extracted from The Definitive Business Plan, suggests an action plan:

Figure 12.1 The fast track to approval

1. Take a short vacation. Visit the health club. Play golf. Go fishing. Do anything to make sure that you are in good shape and ready for a fight.
2. Mentally revisit your intended readers. Make sure that you really understand what they want to read.
3. Make sure that your plan answers the right questions – as completely and concisely as possible.
4. Plan carefully before delivering the plan.
5. Prepare thoroughly for the first and subsequent meetings
6. Give as much assistance as possible to help your readers understand what is in the plan.
7. Follow up promptly with additional information. Make revisions to the plan if necessary and learn for the future. Help recipients through their due diligence.
8. Do your own due diligence. Do not sign anything without checking it carefully.
9. Persevere. Be prepared for delays, disappointments and set-backs.
10. Once the cash is in the bank, go straight to Chapter 13. [Now Make It Happen]

From The Definitive Business Plan, Page 254

If business plans are rejected after passing the first glance (see Figure below), it is usually because they fail to reassure the reader that marketing and sales will bring home the silver. The second most-frequent problem is lack of operational detail – how it will happen. Both of these boil down to a weakness in (explaining) the strategy.

Beyond these factual details, the major hurdle for new ventures is conveying your vision. If you are pursing a new venture, you will often come to think that you are the only person who can see the potential. Don't give up. If it was worth preparing the plan, its worth fighting to get it financed.

Figure 12.4 Ten reasons business plans fail at first glance

1. The presentation is too scruffy or too slick – it feels false.
2. The text is too long, with too many generalizations, too much waffle.
3. The text is too short, too weak and vague.
4. Whatever the length, there are not enough hard facts and details.
5. There are errors of fact (a major sin).
6. Specific omissions suggest that vital skills, resources or knowledge are lacking
7. There is not enough what-if analysis? (What if sales drop 10%? Increase 10%? If interest rates rise one-percentage-point?)
8. The financial projections are unreasonably optimistic, especially if sales or cash flow improve unrealistically smoothly – without seasonal variation or downward blips.
9. The plans are obviously produced to raise finance, not for running the business.
10. The plan was produced by professional consultants, raising doubt about the management's own skills.

From The Definitive Business Plan, Page 259