The definitive business plan : the fast-track to intelligent business planning for executives and entrepreneurs

337 Pages·2007·17.08 MB·English

by  Richard Stutely

About the author “Truly a practical guide to better business planning. The book is friendly and Ultimate
easy to read. It is especially helpful in developing the correct thought process,
Richard Stutely has unique insight which is so essential to effective strategic planning. An indispensable guide to
into strategic and operational
corporate tool.”
planning on both sides of the
Peter N. Tan, Senior Vice President, Hambrecht & Quist business
funding desk. He has handled business
plans on every scale – as a manager
“Richard Stutely’s Definitive Business Plan provides the missing link between planning
with HM Treasury (the UK finance
entrepreneurs and venture capitalists: essential reading for those who need
ministry); a stockbroker and member
to bridge the knowledge gap. If this book had been available 30 years ago,
of the London Stock Exchange; and
life would have been a lot easier.” Fast-track advice for executives and
subsequently as general manager of DT
an international bank, where he saw Mike Brooke, Entrepreneur and Private Venture Capitalist entrepreneurs who want to get beyond the
basics and produce coherent, compelling and
business planning from a financial and
EH intelligent business plans.
funding perspective. More recently, “Richard Stutely’s clear, no-nonsense writing style and his mastery of the subject,
as managing director of multinational make this a very valuable book indeed. The relation of the material to non-profit
F Richard Stutely shows you how to:
technology companies, he has organizations has definitely helped me in my role at the Chamber.” E
handled business planning focused Martin F. Brecknock, Director, Canadian Chamber of Commerce of
I • Assess the current status of your business,
on exploiting rapid change.
the Philippines B USINESS
including skills, resources, products, markets
N
Make sure your business plan is a winner. and competition
Richard also runs training courses,
• Define vision, mission, values, the core
workshops, seminars and lectures
objectives and operating objectives
for MBA students and corporate The challenge of preparing and presenting intelligent business plans is one of the IP LAN
• Develop strategic and operational plans
audiences. He has been interviewed
few that faces both entrepreneur and executive alike. Whether your goal is raising T
• Create financial forecasts, cash flow
by newspapers and on radio and
start-up finance for a new business, requesting venture funding from a corporate
projections and operating budgets
television around the world and he
parent or directing operational management, The Definitive Business Plan will help
I • Obtain the necessary approvals and funding
has also written extensively for
you deliver the information that the decision-makers are really looking for.
THE FAST-TRACK TO INTELLIGENT • Value a business and assess return on investment
publications such as The Economist, V
• Pull all this information together into a
The Accountant and The Banker.
Accessible to the newcomer and detailed enough for the experienced planner, B USINESS PLANNING FOR
well-written business plan
this international bestseller explains how to tailor a plan for specific readerships
E • Use the plan to run your business efficiently
Richard Stutely’s books include The and to meet specific objectives. It helps focus your attention on strategic E XECUTIVES AND ENTREPRENEURS
and successfully
Definitive Guide to Business Finance,
planning as well as on operational controls.
also published by Financial Times R ICHARD STUTELY
“Recent turbulent events in the technology
Prentice Hall and Brilliant Business
If you want people to part with their cash, you need a business plan that has the
markets have shown the critical importance
Plan published by Prentice Hall
substance to stand up to close examination without falling over. In this highly
of conventional business planning. This book
Business; as well as The Economist
regarded and comprehensive book, Richard Stutely will help you make sure your
provides a comprehensive, clear and rigorous
Guide to Economic Indicators and
plan is robust enough to start, run or revitalise any business enterprise.
framework for developing and implementing
The Economist Numbers Guide.
a business plan. This is the guide to business

planning in rapidly changing times.”
Lakis C. Kaounides, Director, MBA in the
Management of Technology and Electronic
Business, City University Business School, London
Visit our website at BUSINESS
www.pearson-books.com Visit our website at
www.pearson-books.com
DESIGNED BY
An imprint of Pearson Education r&d&c REVISED 2ND EDITION
TheDefinitiveBusinessPlan_0273711 1 24/10/06 12:02:22
STUT_PRELIMS.QXD 3/11/06 15:55 Page i
the definitive
business plan
STUT_PRELIMS.QXD 3/11/06 15:55 Page ii
STUT_PRELIMS.QXD 13/11/06 2:58 pm Page iii
‘Recent turbulent events in the technology markets have shown
the critical importance of conventional business planning. This
book provides a comprehensive, clear and rigorous framework for
developing and implementing a business plan that sets out an
overall strategy, together with detailed operational and financial
plans. Invaluable for both practitioners and MBA students alike.
This is the guide to business planning in rapidly changing times.’
Lakis C. Kaounides, Director, MBA in the Management of
Technology and Electronic Business, City University Business
School, London
STUT_PRELIMS.QXD 3/11/06 15:55 Page iv
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STUT_PRELIMS.QXD 3/11/06 15:55 Page v
the definitive
business plan
the fast-track to intelligent
business planning for executives
and entrepreneurs
Revised Second Edition
RICHARD STUTELY
STUT_PRELIMS.QXD 13/11/06 3:05 pm Page vi
PEARSON EDUCATION LIMITED
Edinburgh Gate
Harlow CM20 2JE
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Website: www.pearsoned.co.uk
First published 1999
Second edition 2002
This revised edition published in Great Britain 2007
© Richard Stutely 1999, 2002
© Pearson Education Limited 2007
The right of Richard Stutely to be identified as author
of this work has been asserted by him in accordance
with the Copyright, Designs and Patents Act 1988.
ISBN-13: 978-0-273-71096-7
ISBN-10: 0-273-71096-6
British Library Cataloguing-in-Publication Data
Acatalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book is available from the Library of Congress
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The Publisher’s policy is to use paper manufactured from sustainable forests.
STUT_PRELIMS.QXD 3/11/06 15:55 Page vii
about the author
RICHARD STUTELY
During his professional career, Richard has gained unique practical insight into strategic,
operational and financial planning from all angles – particularly preparing, approving and using
business plans.
When he worked at HM Treasury (the British finance ministry), he dealt with business planning on
the grandest scale – relating to the national economy and public expenditure controls. During this
period he was also involved with world economic developments, parliamentary affairs and
corporate taxation, and was a press officer presenting the then-new monetary policy of the
Conservative government.
Subsequently, as a member of the London Stock Exchange, an investment banker and later a
general manager of an international commercial bank, he viewed business plans in connection
with debt, equity and off-balance sheet funding. More recently, as managing director of
multinational technology companies, he has handled business planning focused on exploiting
rapid change.
Richard has been interviewed in newspapers and on radio and television around the world, he
lectures MBA and other audiences, and he has written extensively for publications such as The
Economist, Accountancy andThe Banker. He has also been a governor and treasurer of a British
private school, a member of Mensa and is a member of The Institute of Directors.
Other books by Richard Stutely include: The Definitive Guide to Management Finance (also
published by FT Prentice Hall), The Economist Guide to Economic Indicators(published in America
as The Economist Guide to Global International Indicators), which aids understanding of the wider
environment for business; The Economist Numbers Guide(published in America as The Economist
Guide to Business Numeracyand also in several foreign languages), which covers many major
techniques to assist management decision-making; and Advanced Desktop Publishing, a practical
guide to desktop publishing. He has also contributed to several other business books.
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acknowledgements
An interesting fact came to light during the preparation of this book. I dis-
cussed its content with many senior executives. The people most willing to
contribute were those working in enterprises with effective planning pro-
cedures in place. The least ready to talk about business planning were asso-
ciated with organizations sharing at least one common characteristic.
Their companies were, it transpired, all in financial difficulty. Some of
these are big names in the corporate world. Could it be that there is a link
between poor planning and poor performance? I think so.
Brief encounters with, and flashes of insight related to, these struggling
corporations contributed to this book. An even greater contribution came
from the many friends, associates and business contacts who were willing to
talk or brainstorm about business strategy and planning. To you all, I offer
my most sincere thanks. This book has benefited immeasurably from your
insights and experiences. I am also indebted to those close to me who put
up with my quirks and idiosyncrasies. I would not be what I am, and the
book would not be what it is, however modest, without their love and
support.
My wife made a huge contribution. My son never ceases to amaze me. His
intellect, wit and cynicism helped me enormously when writing this book.
Thank you all.
STUT_PRELIMS.QXD 3/11/06 15:55 Page ix
contents
About the author vii
Acknowledgements viii
Foreword xiv
Introduction to First Edition xviii
Introduction to the Revised Second Edition xxi
Symbols used xxii
1 What’s it all about? 1
Have you heard the one about … 3
Who should read this book 5
A quick fix or a longer-term tool? 7
What is a plan anyway? 8
Why bother? 8
Key objectives for your plan 10
Your target audience 11
Ten steps to a successful business plan 12
Don’t trust consultants 16
Who writes the business plan? 17
How to use this book 17

2 A winning presentation 21
A concise communication 23
Computer software 23
Make it feel good 24
First thoughts on layout 25
Creating an outline document 28
3 Getting down to it 35
Why? 37
When you don’t want to be a big fish 38
What to do if you have several businesses 39
ix