Refining Your Plan

The is the twelfth and final article in a series of posts focused on deconstructing the essential elements of creating a Business Plan. 


Business Planning Articles:


Business Plan Introduction

The Executive Summary

General Company Description

Product & Services

Marketing Plan

Operational Plan

Management & Organization

Startup Expenses & Capitalization

Valuation & Ask

Financial Plan


Refining Your Plan



Refining Your Plan


After the completion of your business plan, the final task entrepreneurs should consider is reviewing and editing the plan so that it is consistent across all section and adequately suits the intended audience of the document. 

Investors, potential partners, banks, lenders, government, and other institutions will all have different perspectives and expectations about your business plan. 

Therefore, it is essential that your business plan be correctly structured and the narrative your present modified to suit each particular audience.

Here, we cover a variety of insights entrepreneurs should consider depending on who they are presenting their business plan to. 


For Raising Capital




Investors are primarily looking for significant growth opportunities that present little or minimal risk. 

Their expectation is to share in the economic rewards of their investment into your company at a future date, so it is vital that you demonstrate to them a positive outlook and a road-map of how they can get a significant return on investment. 

Entrepreneurs should consider including and expanding upon the following items:


  1. Funds needed in the short-term.

  2. Funds needed in two to five years.

  3. How the company will use the funds and what the strategy will accomplish for growth.

  4. Estimated return on investment.

  5. Desired exit strategy (Buyback, Sale, or IPO).

  6. Precent of equity ownership you are willing to give up to investors for their capital.

  7. Milestones and/or condition that you will accept from investors.

  8. Financial projections.

  9. History & profile of founders.

  10. Desired involvement of the investors on the Board of Directors or in management. 


When courting investors it is important to keep in mind that the relationship you are trying to form is a partnership. Investors will want to be involved in the strategic direction of your business, and you should be open to their guidance and insights. 

Investors will rarely give you money and not involve themselves in the business, and entrepreneurs should in many cases avoid such possible arrangements. 

Investors are not only sources of money, but they can also be valuable sources of knowledge that can be very impactful on the long-term performance and success of your business. 




Banks are different from investors in so far as they don't intent to be directly involved in your business or receive equity ownership for their capital. 

The primary concern of the bank is the assurance of receiving orderly payments on the loan you secure from them. 

If you business is intended for bankers to receive a loan, consider including and expanding upon the following items:


  1. Amount of the loan.

  2. How the funds will be used. 

  3. What will the strategy accomplish, how will it grow and/or become stronger?

  4. Collateral offered, and a list of all existing liens against the collateral. 

  5. Requested repayment terms. 


Terms typically include the number of years to repay, the repayment amounts, when         repayment starts, and the interest rate attached to the repayments. 

Early stage businesses typically do not have much negotiating room on the interest rate applied to the loan, but have greater flexibility on negotiate the longer or shorter repayment terms which can have positive effects on your cash flow. 


Negotiating with banks is a much more straight forward negotiation, however you will be required to show ample evidence that your business is financially strong enough to make the demanded repayments and terms. 

Startups and early stage business typically lack the financial strength, operating infrastructure and sales performance to secure a loan, so the financial vehicle is primarily suited to established small and medium size businesses as well as large corporations. 


Type of Business




Entrepreneurs who manage manufacturing business should consider including the following items in their business plan:


  1. Planned production levels.

  2. Anticipated levels of direct and indirect (overhead) production costs, & how these costs compare to industry averages.

  3. Prices of products, and per product line.

  4. Gross Profit Margin, overall and for each product line.

  5. Production/capacity limits of existing or planned physical plant.

  6. Production/capacity limits of existing or planned equipment.

  7. Purchasing and inventory management procedures.

  8. New or anticipated products under development.


With manufacturing companies the most important metric is the Gross Margin. It is important, therefore, that entrepreneurs very clearly describe the financial metrics of their business in clear terms. 


Service Businesses


Entrepreneurs who manage service based business should consider including the following items in their business plan:


  1. The intangible assets of the business.

  2. Clearly defining the solution differentiation from competitors.

  3. Labor costs.

  4. Solution Prices.

  5. Methods to set prices.

  6. System of production management.

  7. Quality control procedures, and how they compare to industry standards.

  8. How labor productivity is managed.

  9. Percentage of work subcontracted to other firms, and profit margin from subcontracting.

  10. Credit, payment and collections policies & procedures.

  11. Strategy for retaining client base.

  12. Customer support systems.


With service based companies it is essential that entrepreneurs clearly describe the secret sauce that makes them unique and better than the competition. This sometimes requires describing the Human Capital and expertise of your team.  


Technology Businesses


Entrepreneurs who manage Technology business should consider including the following items in their business plan:


  1. Economic outlook of your particular sector of the industry.

  2. The information systems you have in plan to design and manage rapidly changing, prices, costs, and markets?

  3. How cutting edge your product and service is compared to the competition?

  4. What the status of your research & development efforts is? And, what is required to: Bring your product/service to the market, and keep your company competitive. 

  5. How does your company achieve the following:

    A. Protect Intellectual Property?

    B. Avoid Technological Obsolescence?

    C. Supply necessary working capital?

    D. Retain key personnel?


One of the challenges of managing a technology compare is operating the business for a significant period of time, sometimes called a runway, before achieving any sales and generating sustainable profit. 

To secure investment, you must tell you story very well, and provide clear strategic plans that are supported by sound financial forecasts to show when you expect to generate profit. And, all your assumptions must be clearly defined and reasonably argued. 


Retail Businesses


Entrepreneurs who manage Technology business should consider including the following items in their business plan:


  1. Company image/brand.

  2. Explain pricing, markup polices, and why your prices are competitive, will generate profit and aligned to your brand. 

  3. Explain your inventory, how you select raw materials, and why it is consistent with your brand. 

  4. Describe your inventory level and how it compares to industry averages. 

  5. Annual Inventory Turn Over Rate; calculated by multiplying your initial inventory investment by the average turnover rate of your industry. The result should equal your projected Cost of Goods Sold for the first year. If the result is negative you may need to budget more for your startup inventory.  

  6. Customer service policies, and how they align with your brand. 

  7. Location, is it convenient for your customers, makes sense for your company, and whether if offers you the exposure that your brand needs. 

  8. Your marketing and promotion methods, and whether it is consistent with your brand.

  9. Credit policies, and whether it is necessary to extend credit to your customers, and if you factor the cost of credit into your prices. 


With retail businesses one of the main challenges is proper inventory management. Entrepreneurs should carefully describe how they plan to build up their inventory and the costs associated to the effort to match the seasonality of sales and customer trends. 




When developing your plan, it is important to keep a realistic perspective of what you are intending to propose. 

Readers will be quick to doubt your business proposal and your intentions if you try to stretch reality too far and present a proposal that lacks grounded reason and objective foresight. 

When creating your plan there are a few lasting insights to consider: 


A. The Rule of 2 and 3

It will often take twice as much money and 3 times as long to achieve your objective compared to when you initially design your plan and establish your goals. 


B. Flexibility

While developing your business plan many other ideas will emerge about your solution, the market and strategies to achieve your goals. Take the time to explore them so that you become convinced of your strategy and informed of all the approaches you may want to consider. 


C. Revise

Revise your plan often, and have others read it over to make sure that it is clear and consistent across all of the sections. Leverage the feedback of others to improve your plan and re-examine your goals. 


Because the business planning process is tedious and time consuming it is important to be disciplined. 

Perhaps above all, persistency is important. Test and retest your assumptions, your strategies and your financial models. Cover every question and examine all possible options to discover the right solutions and prepare yourself for all possible questions.

To make things easier, structure your time in intervals or sprints, and allow for breaks to keep your creativity alive, because without it will be impossible to discover the impactful solutions that can make your company and business plan work.

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