The business plan is a summary document that aims to convince them of the value of a project. In business, project sponsors submit it to an investment committee, heads of subsidiaries to the direction of their group. The assignors present to prospective buyers, the CFO to providers of funds.
The “7 Keys to convince” constitute the framework of the business plan, it allow the wearer project structuring thinking and presentation.
The project is consistent with the environment, business and corporate strategy
The external strategic analysis describes particular strengths in the market (demand trends, study competitors, regulation, substitute products …) it leads to the statement of opportunities and threats. The internal analysis traces the strengths and weaknesses of the company. It should be satisfied that the company has the key success factors for a successful project.
Realistic and well-argued activity forecasts
These are a realistic goal given the market size and positioning of the company on the market. These are based on objective market data (market research).
The operational aspects are controlled
The main project action plan (investment, human resources, business development …) are controlled. The presentation of different alternatives (production, logistics, marketing …) shows that the project has been matured. The written material is a summary of the project and can obviously contain a detailed description of all these action plans. During the oral presentation, decision-makers will however not fail unexpectedly ask some questions to test the control.
The project is economically viable
Financial synthesis arises from the preceding points. Before financing, economic profitability (or intrinsic) the project meets the requirements of investors defined on profitability criteria (payback period, net present value, internal rate of return, profitability index).
The funding is controlled and profitable project for shareholders
The need for funding is properly assessed and the project leaders have a balanced financial forecast. Financial returns arising from the cost-effectiveness and financing choices (leverage) corresponds to the level expected by investors.
The main risks are identified, brought under control, acceptable
No project without risk (operational, market, regulatory …), so no business plan without risk analysis. The business plan assesses risk through the calculation of neutral, year by year, a sensitivity analysis of the application of different scenarios and finally the analysis of reversibility which gives the value “case-sensitive” of the project.
Reporting for investors
Finally, investors, internal or external, have a reporting framework enabling them to monitor the progress of the project implementation and its operation.