Saturday, 25 October 2008

Simple communication is essential

When communicating your financial strategies or a business plan for a new start-up business or expansion to your existing business you need to keep it SIMPLE. Simple is an acronym for a few key elements that you need to bear in mind when writing your financial strategy paper or business plans.

Solutions to problems: It is important to address business problems in your business plans to demonstrate to the reader that you are prepared for these problems and that their capital will be protected if the problems arise.

Interaction: When preparing your business plan you need to pay attention to the relationships between facts and figures related to your business. Most of these are logic i.e. when you employ more people you would expect running costs to increase, but there are some that are not necessarily logic i.e. you would expect additional cash resources if profits increase but this might not be the case if the cash resources are invested in assets to increase future production or if the cash is used to repay debts. Knowing the interaction between figures in your business plan will help you later to take the right action to correct problems.

Possibilities: When highlighting the possibilities of the business you need to remain realistic and relevant to ensure the reader of the business plan remain interested. The business plan must be realistic in order to convince the reader to invest in the business.

Language: It is important to keep the language in your business plans professional yet understandable. Be aware of technical jargon. While using industry jargon demonstrates your knowledge of the industry it might be wasted on the reader of the business plan. The business plan reader is often a person outside your industry and might not understand all the jargon used in your plan. Make sure jargon is minimised and explained.

Every case is unique: When submitting your business plans it is a good idea to add a cover letter to ensure you add a unique and personal touch to the submission. The cover letter will introduce your business plan to the reader and highlight why you think the business plan will satisfy the finance provider's lending criteria.

The key message is to keep the communication in your business plan simple and factually correct to ensure the reader remain interested. If you need help writing your business plan, why not consider using the coaching service of SA Business Plans.

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