Michelle Rodger: Put your heart into an idea and it might go according to plan

WRITING a business plan is one of the hardest parts of starting and growing a company. You'd be forgiven for wondering if it's really worth your while - and you wouldn't necessarily be wrong.

Unless you are looking for funding, then your plan may well sit in a drawer or filing cabinet, gathering dust. Business and markets change so quickly that many plans are out of date before the printer ink even dries and you may, therefore, wonder what's the point. The real value in writing a business plan is actually in the thinking and writing bit, the process of forensically examining what you are doing, why, for whom, how, and for what benefit.

But it doesn't have to be a cumbersome tome, and drafting a plan shouldn't prevent you from working on your business at the same time.

Harvard Business Review quotes Tony Tjan of Cue Ball, who says that most successful inspiring companies didn't start with a formal business plan. Steve Jobs (Apple) and Ray Croc (McDonalds) didn't have a massive book of PowerPoint slides before they got their businesses started.

Tjan says the plan needn't be a thick book, but it does need to be flexible and he insists you must believe with every fibre of your body in your idea if it is to grow into a great business.

Think big, start small and scale fast is Tjan's second tip. He puts his advice into a concise framework, using the acronym PIMM; People - who's on the team, what will they do and bring to the idea? Idea - why is it different, what makes it the best idea in the world? Model - how are you going to really generate revenue? Market - what's that initial, realistic market you will go after, not the eventual bigger one.

But he also insists you need to understand trade-offs; people always trump ideas as does model over market. A great business model is more important than a theoretical market or financial plan.

What nobody really tells you, though, is that the plan isn't the be-all and end-all. There are elements external to the plan that can make or break it.

Ask serial entrepreneur and technology investor Jane McCracken what she thinks about business plans and she brooks no nonsense. A business plan must be exciting, the executive summary has to grab you right away, it must be written to the level of understanding of the reader, and the numbers have to add up.

But at the same time, American-based McCracken - best known in Scotland for her roles at Axis Shield, VIS Entertainment and all-hotels.com - appreciates there are external considerations that can make all the difference.

Investors receive dozens, maybe even hundreds of business plans for consideration and it's vital to encourage them to read your plan. The sexiest summary in the world won't help if the plan is wedged at the bottom of a pile of plans still waiting to be read.Connections are key and McCracken recommends appointing non-executive directors to your board or even appointing a separate advisory board. A great board will not only help with the strategic part of the plan, but should also be able to make the necessary introductions to potential investors.

Says McCracken: "At all-hotels.com I had two extremely important, very senior people from the hotel industry on my board. Not only did they help with experienced advice, but also with connections and introductions.

"A non-exec or advisory board member should be able to tap into relevant expertise and fill in the gaps in knowledge. A board shouldn't be appointed just to raise money, there's got to be a bigger business benefit."

McCracken also suggests going to where the investors are. Find the top conferences, events and exhibitions that attract investors, attend and raise your profile. "Stand up and ask a question, demonstrate your knowledge and your passion," she says. "Make yourself known to the key people in the investment community."

And finally, but equally importantly, make sure you can convey your business opportunity in a brief but compelling elevator pitch. If you do manage to get yourself in front of an investor or someone who can influence an investor to read your plan, you had better be able to communicate what, why, who and how much, all wrapped up in the "wow factor", or everything else has been a wasted effort.