Article provided by Discovery Business Insurance
Alexandra Fraser is a consultant, academic and entrepreneur who is passionate about building a sustainable entrepreneurial ecosystem. She reveals the secret of a strong business plan and the most common misconceptions of strategy.
“To me a business plan is not a Word document that you have paid a consultant to write for you and then sits on a shelf and gathers dust. It would be outdated by the time it is even printed. A business plan should be a living document,” she says.
What should a business plan entail?
“It should be the embodiment of the fundamental elements of your business. It should include really detailed information on your business strategy,” she says. Include the following:
- What are the activities and tactics that you need to do in order to implement that strategy?
- What resources do you need to run that strategy?
- What is your business model?
“It should be an understanding of how your business model will work, and how your business will grow and become sustainable. Importantly, it should be a living document,” she says.
“The best business plan I’ve seen was a PowerPoint presentation, in a PowerPoint deck. That is such a great format because you’re trying to create a summary and then, as you needed more information, you could pull up more information,” she says.
“You could add detail, slot in new slides, change things around, and it becomes a real living document. It should be iterated, it should be shared. The last thing you also want to do is give them a business plan that is already two years out of date and your strategy might have changed,” says Fraser.
“If you have these living documents, you can update them quickly. You can share them with your board, you can share them with your advisors, you can use them when you’re fundraising. So for me, I would say to any entrepreneur, create something that is useful to you and that will be a tool that will enable you to grow your business. As an internal team or your board of advisors, understand what the roadmap is for the business in the next two to three years,” she says.
“If you are looking at writing a business plan for investment, also consider what type of information your investors would be looking for,” she says.
Fraser adds that understanding the purpose of the business plan is that it is a snapshot in time. “Because your business is not a static entity; it will continually change and grow and it’s operating in a changing market as well,” she says. “It should also validate the potential product or solution. Information needs to be interrogated. Are you making assumptions and do those assumptions need to be tested? Or do you have data to back up the data? And I think that’s also a critical element of our business plan.”
Considering the minutiae
Fraser is actually a scientist turned consultant and entrepreneur: ”I studied molecular biology. I loved the lab and working on different projects. But it also was incredibly frustrating and I thought, do I want to spend my life working on one, very small, but potentially significant thing? Or do I want to be on the other side, outside of the lab but working with innovators and entrepreneurs and scientists to try and commercialise and realize the potential of these amazing discoveries?,” she says.
“That led me to study entrepreneurship and then actually work in biotech and medical device investing. I realised also that I see businesses almost as puzzles. To figure out a business, you need to look at all the different components and see how they fit together and where the gaps are and how they work. And I find that fascinating,” Fraser adds.
Part of the finite details she works on, is strategy. “When I think about strategy, I think about it from the lens of a small business owner or a start-up, not from the lens of a corporate. If you are in a start-up, you are in a resource-constrained environment. So you have to use these resources to pick the best opportunity and to then prove your business case against that,” she says.
“Step two of creating a strategy for me, is understanding what you have to work with, looking internally and externally. What are your resources, and what are the partnerships you could potentially leverage? Then looking at the opportunity in the market, the size of the opportunity,” says Fraser. “Essentially the philosophy then is to build, test and learn,” she says.
Listen to the full episode here:
The 15-episode The Healthy Business Show is brought to you by Discovery Business Insurance. For more insights from Alexandra Fraser, listen to her podcast below.