The Standout Business Plan: Make It Irresistible--and Get the Funds You Need for Your Startup or Growing Business

The Standout Business Plan: Make It Irresistible--and Get the Funds You Need for Your Startup or Growing Business

by Vaughan Evans, Brian Tracy


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The Standout Business Plan: Make It Irresistible--and Get the Funds You Need for Your Startup or Growing Business by Vaughan Evans, Brian Tracy

Too many business plans focus on the details most important to the managers or business owners writing them. . . and fail to address the questions most crucial to potential backers. This immensely practical and eminently readable book shows readers how to create a business plan that speaks directly to investors and lenders and makes it easy for them to say yes. Featuring case studies and examples of both what to do and what not to do, the book reveals how to: Include the vital information backers need, while leaving out extraneous filler that gets in the way Address key factors such as market demand, competition, and strategy Spell out the essence of your business proposition Outline resources and financial forecasts Assess risk from the backer's perspective Evaluate and improve the plan to ensure its success With the easy-to-follow guidance in The Standout Business Plan, now anyone can present a clear, concise, and convincing case that will win them the funding they need to succeed. Note: This book is designed for readers developing business plans for the U.S. and Canadian marketplaces.

Product Details

ISBN-13: 9780814434116
Publisher: AMACOM
Publication date: 05/22/2014
Pages: 272
Sales rank: 628,967
Product dimensions: 9.00(w) x 7.30(h) x 0.80(d)
Age Range: 18 Years

About the Author

VAUGHAN EVANS is a highly experienced consultant specializing in strategy and business planning for corporate clients and strategic due diligence for private equity.

BRIAN TRACY is the Chairman and CEO of Brian Tracy International, a company specializing in the training and development of individuals and organizations. One of the top business speakers and authorities in the world today, he has consulted for more than 1,000 companies and addressed more than 5,000,000 people in 5,000 talks and seminars throughout the United States and more than 60 countries worldwide. He has written 55 books and produced more than 500 audio and video learning programs on management, motivation, and personal success.

Read an Excerpt


Make It Irresistibleâ?"and Get the Funds You Need for Your Startup or Growing Business



Copyright © 2014 Vaughan Evans and Brian Tracy
All rights reserved.
ISBN: 978-0-8144-3411-6



The only thing we know about the future is that it will be different. —Peter Drucker

BEFORE YOU start to write your business plan, you must do some essential preparation. This means gathering the information you'll need to impress your potential backers and getting things organized so that you can prepare a plan that is clear, concise, and convincing. But let's start with the most basic questions concerning a business plan.

The Purpose

What's the purpose of a business plan? Why do you need it? Who's it for? Some guides devote page after page to all the possible permutations of the answers to those questions. That's a waste of time. The essential answers are straightforward: You need a business plan to obtain backing. It is written for your backer.

It's as simple as that. If you are in need of backing, for whatever reason, a business plan is essential. And you'll craft that plan to address all the key issues likely to be raised by that backer.

You may need backing because you are launching a startup. Or your company is set for a liftoff in growth. Or it is facing rough times and needs a cash injection.

In each case you need backing, so you'll need a business plan. Of course, it can be more complicated than that, but only a little. Here are some purposes for a business plan worthy of special mention:

* For a startup

* For raising equity finance

* For raising debt

* For board approval

* For a joint venture partner

* For sale of the business

* For differentiating from a project plan

* For use as a managerial tool

Let's look briefly at each of these purposes in turn.


This plan is not that different from a business plan for an established business seeking growth finance. The chapter headings will be the same, but, as you will see later in this book, certain additional questions must be addressed—for example, the identification of prospective customers, the crafting of a distinctive value proposition, a pilot survey, and an assessment of competitive response.

The business plan for a startup (or an established business) will be tailored according to whether you are seeking equity or debt finance.


Your backer is an investor. Investors look for a return on their investment—as high a return as possible with as little risk as possible. Investors place as much emphasis on opportunity to exceed plan as the risk of falling short of plan. Each chapter of your business plan must be written with that perspective in mind, exploring upsides creatively but realistically.


Your backer is a banker. Bankers will be looking to earn fees on the transaction and interest on the loan extended. They want assurance that your business will generate sufficient cash to cover interest payments. And bankers will want some form of guarantee, some security, that they will get their money back, all in one piece, at the end of the loan period.

And remember this: Your banker may not make the decision. That may be for the bank's credit committee members, and they won't meet you. They won't have the benefit of hearing your upbeat version of the future. They'll just examine a cold document: your business plan. So you had better address all the downsides in your plan and convincingly dismiss them. The credit committee won't be remotely interested in the upside—that won't benefit them one penny. They only want to know what could go wrong, with what likelihood, and what you will be able to do to mitigate the damage once things have gone wrong.

The whole tenor of a business plan for a banker will be different from a plan written for an equity investor. You will be conservative, cautious, and risk averse. Forecasts must be readily achievable. Risks to such unambitious forecasts must be extremely unlikely.

One of the authors worked in an investment bank for a number of years and had many a memorable session with credit officers. Take it from experience: No matter how conservative you are in your downside case, the credit guy will always go a shade or two more conservative—however unlikely it is. So be prepared and well-armed with the counterargument.


The majority of business plans fall into this category. You can imagine the scene in the boardroom a month or two beforehand, with the chairman expostulating: "Charlie, you and your team have so many exciting ideas for moving this wonderful company of ours forward—but, you know, I'm a bit confused. Where are we going to aim first? Where are our best bets? Which is the more risky path? What could go horribly wrong? Will we have enough cash to fund all this expansion? We need a plan!"

The circumstances may differ, but the business plan itself, when written for board approval, will be no different from a plan written for an external investor. The board is effectively an investor—an internal investor—and should be treated with the same respect.


Joint ventures are like any relationship, commercial or personal—success rests entirely on both parties continuing to benefit from it. If one party obtains a seemingly unfair advantage over the other upon formation of the alliance, it will not last and the breakup will be painful on both sides.

Thus the initial success of a JV depends on the terms agreed on at the outset—and these terms, in turn, depend on both parties drawing up and exchanging robust business plans. These plans will be written as if for an investor, because in effect your partner is investing in your business and you are investing in your partner's business.


Many business plans are written for the sale of a business, but too many plans read as if written purely for an equity investor. That's fine if the buyer is a "trade buyer" (that is, another company in the same or related line of business), a joint venture partner, or a venture capitalist.

But it's not so good if private equity firms are among the prospective buyers. They will want to structure the transaction with as little equity as they can get away with, and with as much debt as possible without endangering the financial stability of the company.

This means that the financing will require the approval not just of the investment committee at the private equity house, but also the credit committee at the bank—and maybe also the credit committee at the mezzanine provider (i.e., a financier of high-yield unsecured debt with an equity kicker). So, in this circumstance, the business plan should be written to address both the upside for the investor and the downside for the banker. It needs to be cleverly balanced.


A project plan is similar to, but differs from, a business plan. A project plan makes the business case for a specific investment project. It isolates revenue streams and costs directly attributable to the project and recommends "go" or "no go" decisions accordingly. The decision is typically taken at the board level and is separated for external finance only rarely and on very large projects.

A business plan considers the future of the whole business. That business may be a division or subsidiary of a much larger company, but it has its own income statement and will be forecast in full.


Annual business planning, while often a most useful discipline in large, multidivisional, multinational organizations, is largely a waste of time for small and medium-size businesses (SMBs). In theory, it is a great idea. Every year the managing director appoints a capable manager to review last year's three-year plan and prepare this year's plan. Lessons are learned and steps taken to improve performance.

In practice, insufficient time and effort will be invested in the market research and strategy development parts of the annual plan, rendering the three-year forecasts unsubstantiated, often wildly optimistic, and potentially misleading. The only part of the plan for which managers will be accountable (and that's typically reflected in their pay package) will be the next-year budget numbers. So why invest serious time every September producing robust three-year forecasts against which you are not going to be monitored?

The authors have seen medium-size businesses turning over $150 million preparing rolling annual business plans that are meaningless. No manager believes in them, not even the managing director, but some adviser, some time ago, told them that annual business plans are a useful discipline. They are not, unless they are done properly.

And doing an annual business plan properly means investing time and effort—resources that are in short supply in a thriving SMB and generally better directed toward serving customers and improving performance.

The time for an SMB to do a business plan properly is when there is a specific need, such as when the board asks for one, when an investor seeks one, when the bank demands one, or when the business is for sale. Otherwise, management time is better focused elsewhere.

For whichever of these purposes you are writing a business plan, this book will be your indispensable guide. It is a guide designed to address the needs of different types of backers.

The End Result

What should a good business plan look like? Let's get the answer to that question firmly planted in the brain before we delve into other details.

Where do you need to get to? What is the end result of this process? What does a good, winning plan look like and how does a good plan differ from a bad, losing plan?

In short, what is the essential outcome?

Let's look at the outcomes under two scenarios:

* A plan for an established business

* A plan for a startup business

We'll start with the established business, because it's easier to gather the necessary facts and figures for an ongoing enterprise. The business has a track record, both operational and financial, achieved within a historical, recorded context of market demand, industry competition, strategic positioning, and resource deployment. Forecasts will be based as much on fact as judgment.

If you are planning for a startup, you should still read this section because it will help you become familiar with the various components that go into creating a strong business plan. And keep in mind that an established business scenario is where you are aiming to be in a few years' time, when your startup has made a reputation for itself and is poised for the next level.


What does a successful business plan look like for an established business?

We'll take a fictional case study of The Gorge Inn and Oriental Spa and run with it throughout this book. Hopefully it will be a case you can relate to, because we're confident everyone has felt the urge, now and again, to flee the rat race and set up a business in some idyllic patch of this earth.

This particular piece of North American paradise is located in the Columbia River Gorge, which carves its dramatic, imposing way between Washington State and Oregon. The Gorge Inn and Oriental Spa is owned and run by Rick and Kay Jones. Rick is a former management consultant, and Kay is a stress management counselor of Eurasian heritage.

The business has been operating for three years and has just started to turn a profit. Rick and Kay have secured planning permission to build a 16-bedroom extension and swimming pool—an investment they believe will transform the profitability of the business. But they have run down their personal funds over the last few years and need a further injection of external finance.

In short, they need a backer. So they need a plan. Here's their executive summary, where you'll see that in a mere couple of pages most of the key questions a backer needs to know can be satisfactorily addressed.


The Gorge Inn and Oriental Spa ("The Gorge") is a destination with a difference. It is set overlooking the stunning Columbia River Gorge in the Pacific Northwest of the United States and yet offers visitors a touch of the Orient in its room decor, cuisine, and spa. It has 17 rooms for rent, most with views over the canyon, with spa and restaurant facilities offering a menu of Western and Oriental selections to both overnight and day visitors.

It turned over $513,000 in 2013, having grown by 36 percent/year since 2011, and the operating margin is expected to top 20 percent in 2014. Further investment of $1.05 million in a 16-room extension and swimming pool is forecast to double sales by 2018 and boost operating margin to 34 percent. Opportunities to exploit a proven concept outshine risks of cost overrun or slower buildup of occupancy.

The Gorge has three main business segments—rooms, catering, and spa. Room revenues have been growing fastest, at 45 percent/year, with spa revenues (20 percent of total) slower (at 18 percent/year) because of the increasing patronage of nonresident visitors from the start and subsequent capacity limitations, to be eased with the planned Phase II development.

The overnight visitor market in the Columbia River Gorge has bounced back from the 2009 downturn to an estimated $86 million in 2013 and is forecast to grow at around 4 percent/year to $105 million by 2018. Key long-term drivers are the growth in the U.S. population and per capita incomes, the propensity of Americans to take multiple short breaks, investment in state visitor attractions, such as scenic road and off-road cycling routes, and targeted marketing spend led by Travel Oregon. The main short-term driver is the economic cycle.

There are many excellent resorts, hotels, inns, B&Bs, and spas throughout Oregon. The industry is competitive, with low barriers to entry, but with the most highly differentiated businesses thriving and enjoying repeat customers. Occupancy rates in Columbia River Gorge hotels are a shade higher than elsewhere in Oregon. Spa facilities are not widespread in rural Oregon and are found primarily at the luxury resorts, but there are many good spas in Portland, the "City of Roses," which is just 35 miles from The Gorge. Restaurants offering Oriental cuisine, particularly Chinese, Thai, and Vietnamese, can also be found in Portland, along with its famed food cart pods and microbreweries.

The Gorge Inn is distinctive in two main ways: It enjoys a spectacular location atop one of the most beautiful canyons in North America, and it has an Oriental theme. The theme is understated, with a hint of the Orient applied to the bedroom decor and Oriental treatments available, in addition to standard ones, at the spa. Oriental cuisine is offered in the restaurant, but so too is Western fare. The customer is given the choice. In the three years since opening in December 2010, occupancy rates at The Gorge have grown from 39 percent to 56 percent to 71 percent and are budgeted conservatively for 75 percent in 2014. Restaurant take-up by overnight visitors has risen to 35 percent of visitor nights and spa occupancy 26 percent, both above budget.

Rick and Kay Jones bought the property in 2009 for $715,000, against which they took on a mortgage of $500,000 and spent a further $280,000 of their own funds on renovation. The owners work full-time in the business and employ a staff of three full-time workers, with part-time help added as appropriate. Spa professionals are contracted as required.

The business broke even at the operating profit level during 2012, the second year of operations, and achieved a profit before tax of 11 percent in 2013, budgeted to rise to 15 percent this year. The owners believe that profitability will be greatly boosted with the planned Phase II expansion, costing $1,050,000 for a new building with 16 rooms and an outside heated swimming pool. Overheads, other than financing costs, will rise by 50 percent, but revenues, once occupancy rates return to today's levels by (conservatively) 2018, will have almost doubled. Operating margin, assuming no change in directors' remuneration, is forecast to reach 34 percent by 2018 and profit before tax 24 percent. The speed of growth will continue to yield challenges of cash flow, and the owners will look to their backer to provide the necessary flexibility of finance.


Excerpted from THE STANDOUT BUSINESS PLAN by VAUGHAN EVANS, BRIAN TRACY. Copyright © 2014 Vaughan Evans and Brian Tracy. Excerpted by permission of AMACOM.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Introduction 1

Chapter 1 The Groundwork 5

The Purpose 5

The End Result 9

The Gorge Inn Business Plan: Executive Summary 11

The Preparation 17

Thinking Out of the Box: Creating Wealth 24

Chapter 2 The Business 28

Background 29

Thinking Out of the Box: Planning for Success 31

Business Mix by Segment 35

The Blues: IBM and Business Mix 38

Segmentation in a Startup 39

The Gorge Inn Business Plan: The Business 40

Chapter 3 Market Demand 42

Market Size and Marketcrafting 43

Market Growth 47

Stalling: Movie Theaters and Market Demand 48

App-reciation: Mobile Apps and Market Demand 54

Market Demand for a Startup 55

Thinking Out of the Box: Identifying Your Target Customer 57

Market Demand Risks and Opportunities 59

The Gorge Inn Business Plan: Market Demand 60

Chapter 4 Competition 65

Your Competitors 66

Who Said Mature? Groceries and Industry Competition 68

Competitive Intensity 69

Block-Busted: Movie Rentals and Industry Competition 74

Competition in a Startup 75

Thinking Out of the Box: Competing Strategically 77

Industry Competition Risks and Opportunities 80

The Gorge Inn Business Plan: Industry Competition 80

Chapter 5 Strategy 84

Competitive Position 86

Tasty: Samuel Adams' Differentiation Strategy 88

What Is Your Strategy? 89

Cheap and Cheerful: South-west Airlines'" Low-Cost Strategy 94

Strategy in a Startup 96

Thinking Out of the Box: Pumping Up Profit 98

Strategic Risks and Opportunities 103

The Gorge Inn Business Plan: Strategy 104

Chapter 8 Resources 110

Management 112

Marketing 115

Thinking Out of the Box: Magical Marketing 117

Bullish: Red Bulls Marketing Resources 120

Operations and Capital Expenditure 122

Confronting China: Rodon's Production Resources 125

Resource Risks and Opportunities 130

The Gorge Inn Business Plan: Resources 131

Chapter 7 Financials and Forecasts 133

Historic Financials 134

Market-Driven Sales Forecasts 136

Competition-Driven Margin Forecasts 140

Funding the Plan 143

Full Financial Forecasts 145

Forecasts in a Startup 152

Thinking Out of the Box: Basic Budgeting 155

Financial Risks and Opportunities 158

The Gorge Inn Business Plan: Financials and Forecasts 158

Chapter 8 Risk, Opportunity, and Sensitivity 164

Meet the Suns & Clouds Chart 165

What the Suns & Clouds Tell You 167

How Material the Girl? Madonna and Risk 170

Sensitivity Testing 174

The Gorge Inn Business Plan: Risk, Opportunity, and Sensitivity 176

Thinking Out of the Box: Succeeding in Business 178

Chapter 9 Conclusion and Executive Summary 182

Conclusion 182

The Gorge Inn Business Plan: Conclusion 184

Executive Summary 184

The Gorge Inn Business Plan: Executive Summary 185

Investment Highlights 187

The Gorge Inn Business Plan: Investment Highlights 189

Chapter 10 Monitoring and Evaluating 190

Monitoring Your Plan 190

Evaluating Your Plan 191

Beware These Characters! 193

Epilogue: 12 Hot Potatoes 196

Appendix A Deriving Competitive Position 206

Appendix B Structured Interviewing of Customers 223

Appendix C Templates for Creating Your Own Plan 227

Appendix D Sample Business Plans 236

The Gorge Inn and Oriental Spa 237

PermaRoll 255

Index 271

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