How to evaluate a good business plan
Do not expect that all of your plan’s initial assumptions will be correct. Bios and brief highlights of each executive’s strengths and expertise should accompany standard business information such as headquarters and corporate structure. Are you aware of changes in the industry — including our customers and our competitors — that should be addressed in our business plan?
Review the potential and the pitfalls inherent in the business to make an informed decision and increase your chances of success. In particular, since you should provide feedback and reports at meetings of your steering committee or overall coalition, find out ahead of time how often they’d like updates.
Spell out your strategies on how you intend to handle adversities. Define your unique ability and seek out others who turn your weaknesses into strengths.
Base your business plan on a wonderful concept. Some of them have sales objectives, selling an idea, and a team, and a market, to investors. While blue-sky strategy is great or might be, maybe , good planning depends more on what, when, who, and how much. It sets out what evaluation is, and what the benefits of good evaluation are. Same thing with your researchers and evaluators: Be optimistic on the low side in estimating future costs.
What are the types of stakeholders? William Shakespeare The Value Proposition Many times teams discuss value with language that is bold and grand, powerful yet ambiguous. All that glitters is not gold.
Better yet, find out what sort of information you’ll need to have for any future grants you’re considering applying for. To us, and this is where it gets controversial, this means that the fine points of external reporting and specialized sporadic financial transactions are to be understood at a high level by the CFO, but that is not a primary focus of the role. Concrete Specifics add substantially to the discussion. Formulate and Reformulate Your Business Plan Donald N. Remember, evaluation is more than just finding out if you did your job.
Promoted by Understand the business environment. Session 2 of our Business Expansion course, Getting Your Team in Place , provides detailed recommendations on delegating authority, employee motivation, training and other key management tools. So people in charge have to know and understand the plan. Too often, long-range planning becomes meaningless because the reality of your business can be different from your initial concept. Perhaps even more disturbing is observing a hiring trend where the CEO is surrounded by junior people.
It clearly identifies assumptions This is very important because business plans are always wrong. In addition to the financial functional areas, any time spent in operational functions was great experience. Here is a brief overview of some common evaluation methods and what they work best for. At an early stage, most companies will not have this depth in the operational chair, and because of this we are looking more for a staff that simply understands what is missing and how they will fill it, both in the short and long term.
What is required by funding? Avoid language or explanations that are difficult to understand. Look for experience, integrity and passion in the executive team. Assessing attainment of objectives: This is best done through member surveys.
Have any of your strategies caused people to cut down on risky behaviors, or increase behaviors that protect them from risk? Interviews with key participants Key participants – leaders in your community, people on your staff, etc. When do feedback and reports need to be provided? Shortly after the end of the project – usually when the final report is due.
The main product you’ll want to come up with is a report that you can share with everyone involved. Examine the company strategy for capturing its market. Evaluate the market opportunity. While what ultimately happens to the business has yet to unfold, we have a deep confidence that the entrepreneur will ultimately assemble a highly qualified team that will be cohesive and rapidly work through problems.
One way to do this is to make a table of program components and elements. There are a lot of branches on that tree. Test and refine your business model before expanding your operations. Use the business plan templates furnished in each session. Define and describe your intended business and exactly how you plan to go about it. Of course, you will provide feedback and reports at the end of the evaluation, but you should also provide periodic feedback and reports throughout the duration of the project or initiative.
For these reasons, evaluation is extremely important. Great performers in this area consistently demonstrate a very fluid ability to find ways to meet the needs of the application, or customers, within what is technologically achievable. At some point, take the plunge and test your product or service on a small scale in the real world through customer research, test marketing, or prototypes. Because of this, we judge the CEO and senior team to be the most important piece of any new business venture.
Consider what sort of decisions you and your stakeholders will be making. Some are supposed to support loan applications. Founder or co-founder of several others, ranging from successful to failure and in-between. Member survey of goals: For example, if you lack the ability to train staff, include an explanation how you will compensate for this deficiency.
What sort of standards should you follow? Ensure that the financial projections are both promising and realistic. Write out the plan yourself, in your own words. My favorite business plans are about managing: Try to stay focused on the specialized market you intend to serve. These are very different plans.
They are able to articulate how the market is segmented, where they will compete, and what market segments they will avoid. The second measure of good or bad in a business plan is realism. Up above, where I suggest that the qualities of writing and editing are not essential for all plans, and I reference cryptic bullet points that only the team understands: It has to bring the planning process with it, meaning regular review and course correction.
Support Finally, evaluate the amount of support you expect to receive from your family and the community. Success comes to those who start businesses with great economics and not necessarily great inventions. When should evaluation end? However, the people that the entrepreneur brought to the table were all first-rate, and they had enough self-confidence to listen well and think about the ideas expressed. How much and what kind of a difference has the program or initiative made for its targets of change?
A plan that ignores a fatal flaw is not a good plan. Is there diversity among participants? Here are a few reasons why you should develop an evaluation plan: Product A concise description of the product or service, focusing upon what it does and how it meets the needs, or solves the problems, of the customer. How much and what kind of a difference has the program or initiative made on the community as a whole?
As a rule, people who specialize in a product or service will do better than people who do not specialize. Focus on how your prior experiences will be applicable to your new business. Member surveys about the initiative When Ed Koch was mayor of New York City, his trademark call of “How am I doing? You can download the business plan template included in this session, fill it in and print.
Plan to hire people who have the skills that you lack. We recently saw this well demonstrated in an early stage company. Community groups will probably want to use the evaluation results to help them find ways to modify and improve your program or initiative. Don’t commit yourself too early. Theory and Practice, 8 3 , Include biographies of all your intended management. Part of a financial assessment includes the amount you have in personal savings to add to the initial investment.
This section should include the regulatory environment and mention any costs or necessary delays associated with regulations. Health promotion planning, 2nd Ed. If your initiative is working perfectly in every way, you deserve the satisfaction of knowing that. Take some time to make a list of your project or initiative’s stakeholders, as well as which category they fall into.
Financial data is always at the back of the business plan, but that doesn’t mean it’s any less important than up-front material such as the business concept and the management team.