Derbyshire First Investments Ltd

Business Plan

It is essential that we be supplied with a well-thought-out and realistic business plan to assist us in assessing whether we should invest. While this is not an exhaustive listing, we would expect the business plan to cover:-

Management overview

- Key points of the plan

Business and management

- Age of business, results to date (last three years), borrowing history, existing commitments, current accountants, bankers, lawyers

- Key personnel, their experience, knowledge of the industry, age, education and training

- Shareholding structure, involvement of major shareholders in other ventures

- Number of current and future employees by category

- Reporting structure, internal organisation, skills level by department

- Profit share or bonus schemes

- Successes, failures and lessons learnt

Product or service

- Current product range

- Current customers, existing customer contracts

- Status of product development - percentage of new product in current sales

- Any patent, trademark or copyright protection

- Market size, structure and growth over five years, major competitors

- Product / service trends

- Distribution outlets / service supply points

- Sales forecasts, promotional and pricing plan

- Current and future competitive advantage with relevant market research

Objectives and strategy

- Business goals - general

- SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)

- Short-term and medium-term objectives - specific targets of gross profit, return on capital, new product development, personnel targets

Information system and frequency of reporting

- Accounting methods - cashflow, profit and loss, balance sheet, financial ratios

- Production, marketing, personnel, new product development, efficiencies

Production / service supply system

- Equipment, age, sophistication, layout

- Product certification

- Supplier agreements

- Warehousing, physical distribution, order processing

Projections stating assumptions of future performance for at least one year in detail and two further years in outline, to include:-

- Estimated turnover, balance sheets, profit and loss accounts, monthly cashflow projections

- Capital expenditure budgets

- Sensitivity analysis to show effects of say 20 per cent increase in sales and 30 per cent decrease

Assumptions

- Main assumptions underlying the plan

- Risk assessment and contingency planning

Action plan

- Responsibilities

- Time scale and key tasks by month - milestones, success criteria

- Project plan for major investments, with critical path

Finance required

- Purpose

- Level of return on the investment (for large scale investments a Net Present Value calculation or some other discounted cash flow)

- Total funding required based on projections

- Repayment assumptions

- Security available

- Assets available / assets used as security elsewhere

We prefer the business plan to be largely produced by managers rather than accountants or other professional advisers. Great technical or other detail is best kept to appendices.

Derbyshire First Investments Limited
Bridge House Riverside Village Hady Hill Chesterfield Derbyshire S41 0DT
Tel: +44 (0) 1246 207390
Fax: +44 (0) 1246 221080
Email: info@dfil.co.uk
Registered in England Number 2116432.

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