Being a successful entrepreneur and angel investor, I have seen my share of business plans.
We receive around 600 every month, yet frustratingly, most are incomplete, unrealistic, exaggerated - or the product and market simply have not been researched thoroughly enough.
One has been five lines long; another, 250 pages. But neither told us what we needed or wanted to know.
I'm still waiting to have one land on my desk where I don't have to ask a multitude of questions to get the whole picture.
So where do people go wrong and what can a new business or start-up do differently when putting their plan together?
The first and most important thing is to know your domain. Many people write their plans without understanding the area they are going in to, from the supply chain and licensing laws, to the health and safety procedures entailed. So do your research thoroughly.
It helps if you have worked in the domain you are trying to launch a business in, or show why you are confident of doing so.
I had worked in pensions for four years before going to Peter Hargreaves and Stephen Lansdown with my idea to sell pensions by post, phone and online. I knew the market inside and out and so they had the confidence to back me.
My company, Pensions Direct, grew and was absorbed by the Hargreaves Lansdown group which is now valued at more than £4bn.
Secondly, you must have tested the product and the market. If it's a new drink, will people like it and is the pricing right? It's no good just testing it on friends and family who will say how great it is, you have to know if there's a real market for it.
We see a lot of plans with made up numbers showing how much they think the business is worth, how much they believe it will make over five years, or what percentage of the market they believe they can corner.
Many have unrealistic figures that don't take into account the evolving world or market place. Have you tried things in the market, rather than on a piece of paper?
Having completed 21 deals with companies in the past few years, not one of them has stuck to the original plan that was submitted as they grow after funding.
We want to see people who are adaptable and can anticipate what the market will do and why. In a way, the whole idea of forecasting five years worth of sales is farcical, but that doesn't mean your numbers have to be as well. How will your numbers change as the market does? How are you anticipating this change?
Some of the business plans we receive talk about their MBAs and education as though they will make an entrepreneur sit up and take notice because they're a cast iron guarantee they will succeed.
I know lots of people who have an MBA who are terrible at business. We want to know what you have done, but we want to know how you know the sector more! Tell us what makes you magic!
Finally, don't buy some off the shelf business plan and try to make it pretty. We want to know you can run a business; we want to know you are a hard worker; we want to know you know your domain inside and out. We don't care how pretty your business plan looks.
Seeing so many business plans, there are dozens of things that have me putting them in the reject pile before I've got past the first page.
But there are plenty of things you can do to give yourself the best chance of getting the funding you need.
1) Keep your own salary low: Anyone who asks for a largish salary in their plan shows either they don't have faith in their venture, or that they won't go through pain to get it to work. Asking for £100,000 to fund your business, but £50,000 of that for your own salary, is a sure-fire way to get me to stop reading.
2) Keep it lean: Keep your staff levels low, your office costs low, and the amount you are asking for low. The lower the numbers in these cases, the more likely you are going to be profitable and get someone to invest in you.
3) Don't write about how you hope to capture "X per cent of the market" in your plan.
I see so any plans that say things like "The App market is worth £X billion a year and we don't think it's too ambitious to capture one per cent of it." How many people capture one per cent of a multi-billion pound market? There's a big difference between being optimistic and unrealistic.
So if you're putting a business plan together, or looking for funding to take your business to the next level, do your research, know your domain, don't be greedy, and take your time.
Maybe you'll be in the one per cent who get it right.