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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

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

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22 мая 2014 г.


The Standout Business Plan is an immensely practical and readable guide that shows you how to create a business plan that not only speaks directly to investors and lenders but also makes it easy for them to say yes.

At the beginning of every successful business is a well-thought-out and exceptionally prepared business plan that was written with one audience in mind--investors. However, too many budding entrepreneurs have written their business’s bible with a focus on details most important to managers or employees or even themselves, completely avoiding the questions most crucial to those who determine the fate of the business’s genesis…its potential backers.

Renowned leadership expert Brian Tracy and business strategy consultant Vaughan Evans share case studies and examples of both what to do and what not to do when developing a plan for your business.

In The Standout Business Plan, Tracy and Evans reveal how to:

  • Include the vital information backers need, while leaving out extraneous fillers 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

Your business plan is too important to not get exactly right from the beginning. 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.

22 мая 2014 г.

Об авторе

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

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The Standout Business Plan - Vaughan Evans


Make It Irresistible—and Get the Funds You Need for Your Startup or Growing Business





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Library of Congress Cataloging-in-Publication Data

Evans, Vaughan, 1951–

The standout business plan : make it irresistible, and get the funds you need for your startup or growing business / Vaughan Evans and Brian Tracy. — 1 Edition.

       pages cm

Includes index.

ISBN-13: 978-0-8144-3411-6

ISBN-10: 0-8144-3411-8

1. Business planning. 2. Stockholders. I. Tracy, Brian. II. Title.

HD30.28.E937 2014



© 2014 Vaughan Evans and Brian Tracy.

All rights reserved.

Printed in the United States of America.

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Printing number

10 9 8 7 6 5 4 3 2 1

To Barbara, Kamontip, and our families



Chapter 1: The Groundwork

The Purpose

The End Result

The Gorge Inn Business Plan: Executive Summary

The Preparation

Thinking Out of the Box: Creating Wealth

Chapter 2: The Business


Thinking Out of the Box: Planning for Success

Business Mix by Segment

The Blues: IBM and Business Mix

Segmentation in a Startup

The Gorge Inn Business Plan: The Business

Chapter 3: Market Demand

Market Size and Marketcrafting

Market Growth

Stalling: Movie Theaters and Market Demand

App-reciation: Mobile Apps and Market Demand

Market Demand for a Startup

Thinking Out of the Box: Identifying Your Target Customer

Market Demand Risks and Opportunities

The Gorge Inn Business Plan: Market Demand

Chapter 4: Competition

Your Competitors

Who Said Mature? Groceries and Industry Competition

Competitive Intensity

Block-Busted: Movie Rentals and Industry Competition

Competition in a Startup

Thinking Out of the Box: Competing Strategically

Industry Competition Risks and Opportunities

The Gorge Inn Business Plan: Industry Competition

Chapter 5: Strategy

Competitive Position

Tasty: Samuel Adams’ Differentiation Strategy

What Is Your Strategy?

Cheap and Cheerful: Southwest Airlines’ Low-Cost Strategy

Strategy in a Startup

Thinking Out of the Box: Pumping Up Profit

Strategic Risks and Opportunities

The Gorge Inn Business Plan: Strategy

Chapter 6: Resources



Thinking Out of the Box: Magical Marketing

Bullish: Red Bull's Marketing Resources

Operations and Capital Expenditure

Confronting China: Rodon's Production Resources

Resource Risks and Opportunities

The Gorge Inn Business Plan: Resources

Chapter 7: Financials and Forecasts

Historic Financials

Market-Driven Sales Forecasts

Competition-Driven Margin Forecasts

Funding the Plan

Full Financial Forecasts

Forecasts in a Startup

Thinking Out of the Box: Basic Budgeting

Financial Risks and Opportunities

The Gorge Inn Business Plan: Financials and Forecasts

Chapter 8: Risk, Opportunity, and Sensitivity

Meet the Suns & Clouds Chart

What the Suns & Clouds Tell You

How Material the Girl? Madonna and Risk

Sensitivity Testing

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

Thinking Out of the Box: Succeeding in Business

Chapter 9: Conclusion and Executive Summary


The Gorge Inn Business Plan: Conclusion

Executive Summary

The Gorge Inn Business Plan: Executive Summary

Investment Highlights

The Gorge Inn Business Plan: Investment Highlights

Chapter 10: Monitoring and Evaluating

Monitoring Your Plan

Evaluating Your Plan

Beware These Characters!

Epilogue: 12 Hot Potatoes

Appendix A: Deriving Competitive Position

Appendix B: Structured Interviewing of Customers

Appendix C: Templates for Creating Your Own Plan

Appendix D: Sample Business Plans

The Gorge Inn and Oriental Spa



About the Author

Free Sample Chapter from Raising Capital by Andrew J. Sherman


YOU HAVE A terrific idea for a new business. Everybody loves it and offers encouraging words, but words are cheap. You need cash. You don't have enough in the bank to launch a start-up yourself, nor does your family. You need a backer, perhaps an angel investor or venture capitalist, possibly a banker. For whomever, you need a business plan.

Or you may run your own company. You need to expand. You could just about finance it from your balance sheet or through your existing bank facilities, but you could do with some extra cushion. You need a backer, most likely your bank. You too need a plan.

Or maybe you're planning serious expansion, possibly acquisition. You'll need backing from a development capital house. You need a plan.

Perhaps you work for a company and your boss collars you at the water-cooler: Charlie, we need a business plan. Can I leave it with you? You're pretty good at your job in marketing or finance. But you've never written a business plan. Where do you start?

Or maybe you're planning a management buyout. Boy, do you need a plan! And it will have to be robust, nay, rock solid, because your backers will hold you accountable if the deal goes through.

In all these cases, let The Standout Business Plan be your guide. It is written from the perspective of a backer. Every word on every page is designed to help your business get the backing you seek.

You don't need an encyclopedia for a business plan. And you don't need an encyclopedic guide to help you write one. Your backer would walk out of the room if you presented her with such a plan. She wants the meat; having to chew through the fat will make her back off, not back you.

It's the message that counts, not the detail. Size is not important.

You need a plan that is clear and concise, easy for your backer to read and understand. You need a plan that is coherent, consistent, and convincing, furnishing your backer with the evidence and the argument needed for the go-ahead.

You need the essentials of a business plan.

This is the book for you. It is tailored to meet the needs of your backer. Many business planning guides lead you through the process from the perspective of what you, as a manager or entrepreneur, would wish to say about your business.

Not this guide. It is customer-driven, not supplier-driven. It works backward from the backer to the planner—from what your backer needs to know about your business to what you need to research and analyze to address your backer's needs.

And who is this book for—that is, who is this planner? It's anyone who has to produce a backable business plan. You may be an entrepreneur starting out on a new venture. You may be a manager in a medium-size business who's been handed the task by the managing director. Or you are the owner of a smaller business and you have delegated the task…to yourself.

You may even be a manager in a large company who wants to cut to the chase and draw up a short, sharp, backable plan, rather than a long-winded, interminable tome complete with pages of spreadsheets that will be out of date by the time the report lands on the boss's desk.

This book is laid out in a format designed carefully to help you write a backable business plan.

Chapter 1 is about what you need to do before you get going on your business plan, in terms of purpose, research, and organization; Chapter 1 of your plan meanwhile will be an executive summary of your Chapters 2–9.

Chapters 2–9 of this book have exactly the same titles as Chapters 2–9 of your business plan will have; this book's Chapter 3, for example, is titled Market Demand, as will be Chapter 3 of your business plan; likewise for subsequent chapters on competition, strategy, resources, forecasts, and risk.

Chapter 10 of this book is about what you will need to do having written your business plan, namely, its future monitoring and evaluation.

This book also has highly practical appendices on how to derive your competitive position and how to undertake structured interviewing of customers. Appendix C has a set of template slides for you to copy and fill in for your own business plan. And, finally, Appendix D sets out in slide format two exemplary business plan case studies—one for a startup in manufacturing and the other for an established business in the service sector—indeed, the very same business, The Gorge Inn and Oriental Spa, that features as the central case study through every chapter of this book.

Appendices in your business plan will of course differ from those of this book. No two business plans will have the same sets of appendices, but most should contain further detail on your products/services, the markets they serve, the company's positioning, customers, marketing, facilities, IT, management etc. It is up to each planner/writer to assess what elements of further detail should best be placed in an appendix—with the sole and specific purpose of transferring further evidence and comfort to the backer.

FIGURE I–1. Your backer wants to see your ducks in a row.

Finally, and importantly, remember that your business plan will have every chance of winning the backing it merits if it is coherent, consistent, and credible—if all your ducks are in a row (see Figure I–1).

If your ducks are all over the place, incoherent, inconsistent, and incredible, your backer, as he or she has done on hundreds of previous such occasions, will show you the door (see Figure I–2).

This book will show you how to get your ducks in a row. It will guide you on how to write a business plan that will wow your backers and get you the funding you need for your business to succeed.

FIGURE I–2. If they are all over the place, you have no backer.



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, multi-divisional, 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

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