Business Plan or Fundraising Tool ?

Are you building a business or just trying to get funding ?

From time to time I have come across individuals who seem to think that a Business Plan is just a tick the box item for gaining venture capital funding. Well the horrible truth is that it is not...... It is meant to be the credible blueprint by which your concept will become commercial reality.

There is a fantastic term which I probably overuse. Originally came from a great Private Equity guy - Rupert Harrington - at Advent Private Capital in Melbourne Australia. I have been fortunate to work with Rupert a couple of times now (www.adventprivatecapital.com.au ).

The term is 'DEFEND'. Can you defend your business plan. Plain and simple. Is it something that if a third party brought it to you - you would invest your own money in ?

If it is just a fundraising document you are going to find it pretty hard to get people to believe the core data, because you probably don't believe it yourself.

So when you are spending your valuable time cooking up your next great idea I encourage you to think at every stage with every key element - can I defend it ? How will I prove that this assumption is credible ? What third party evidence can I bring forward ?

If you can defend it you are on the right track of a business plan. If not - perhaps think about saving yourself a little embarassment by spending more time working through the fundamental assumptions so that it is defendable.