When Writing Your Business Plan, It's Important to Include Your Risks
In January, The Travelers Institute® held a special symposium at the London Science Museum. Part of the Small Business - Big Opportunity series, it was an opportunity for business leaders to discuss today’s small business challenges.
One of the questions discussed was about strategies for accessing capital in today’s lending environment. An important part of that is the writing of a business plan and the following are some of the key insights shared:
Start with a Reality Check
As Conrad Ford, CEO and founder of Funding Options, explains: “The first question you should ask yourself is whether you actually believe your business plan around growth? After all, you’re the one who’s seen the numbers, the metrics and the customer behavior.” He went on to say, “It’s tempting to tell investors what they want to hear but you should worry more about what you believe.”
Then Address the Risks
Matt Cooper, CCO of Crowdcube, views thousands of business plans every year and says that one of the first things investors in early stage businesses look at is the approach to risk: “If you’re a digital cloud-based business, are you protected against cyber-attack? If you work in financial services, what happens if you lose customer data?”
He also believes there’s room for improvement. “Time and again risk management and insurance are kicked to the bottom of the priority list because they’re not very ‘sexy’. But when you get to later stage funding rounds, investors will want to see that you have things like appropriate D&O and PI cover in place.”
Make No Mistake, Every Entrepreneur Should Dream Big About What Their Business Could Achieve
But if you want your investors to share that optimism, you need to anticipate their doubts. And, besides, your dreams will be sweeter when you’re relaxed enough to get a good night’s sleep.
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