NAME: Max Clifford

DOB: 6 April 1943

Intro: Maxwell Frank Clifford was born in April 1943 in Surrey.  Max Clifford has been in the business of public relations protecting and promoting a wide variety of clients for well over 40 years.  He has in the past worked with the likes of Mohamed Al-Fayed, David Copperfield and today continues to work with the likes of Simon Cowell, Peter Jones, and Pimlico Plumbers.

Businesses: Public Relations: In 1970 Max Clifford created MCA,   (Max Clifford Associates Limited).

Business Achievements:

Max Clifford Associates has been responsible for over 170 front page exclusives within the last 18 months.

Columnist with ‘Surrey Life’

Things that interest me: A life-long fan of Jaguar cars, he now drives a Bentley Arnage T.

Your motto would be: “Got a lot out and put an awful lot back”- that would be my epitaph.

How do you define PR?

I suppose promotion and protection, when I started out in the early sixties, with the Beatles and Motown and all of those people it was mainly promotion, now it’s more and more about protection. And we have a wide range of clients from stars, to property companies, to banks, health and beauty, you name it. But because of the changing media particularly in this country, because they are more savage it is more and more about protection than it is about promotion.

What’s the importance of PR to a business?

Well you are known by your image. We are the people that create those images. So if your PR campaign is successful it’s a very economical way of achieving an awful lot. Compared to advertising you could spend a million pounds on advertising and £100,000 on PR. And if the PR campaign is successful because it’s editorial it’s far more influential and has far more impact. Then you can achieve a lot more than spending ten times more on advertising. We have demonstrated over the years in lots of different areas.

Is there a particular time you fell when a business should implement PR?

It just depends on the circumstances and also your financial position. In a perfect world you would employ PR from the very beginning. The PR people assuming they know what they are doing would help you prepare to put the foundations in place which are going to help you months and years ahead. You might make mistakes; you may not understand the way it works, the way the media works, the way it would be best to protect yourself. So the earlier the PR person gets involved the better.

Does PR and marketing go hand in hand?

There is a difference but they tend to go hand in hand in my experience. What we do is use the media to get a message across, and obviously marketing is about understanding what the best message is across. In other words for your particular company, business, and product, this paper, this television, this radio whatever is best for you. Working together in PR and marketing, hopefully you understand the right market, the best market and the best way to get that message across.

Do ethics have a place in PR?

Not really no, because it is all about success. ‘Did Freddie Starr eat a hamster?’ “No”, But, ‘Did he sell out theatre tour and make him millions of pounds?’ “Yes”. ‘Was it Ethical?’ “No”, ‘Was it Successful?’ You take every situation on its own merit of cause; this is light relief, its entertainment. I would not be so flippant if I was dealing with a couple things; I’m involved in children hospices and things like that, different thing all together. But sometimes you got to look at every situation on its own merit.

What advice would you give an entrepreneur who wanted to set up their own PR Company?

I suppose it’s really what it is you are going to try and achieve. ‘Is it something that you’re good at?’ ‘Is it something that you’re better at than other people?’ ‘Is it an area that you understand?’  ‘Do you have the practical knowledge to be able to make it work?’  You could for example have a great idea for a television program. But if you got no contacts in television and got no way of getting in, it is not pointless but it will be a struggle. So you try and realistically assess the potential of the individual and give them guidelines accordingly.

Have you ever implemented a PR campaign that a client has not been happy with?

Yes, I mean in forty odd years of course. Freddie Starr wasn’t happy about that and he didn’t want me to do it but I ignored him. As I do all my clients, I do what I think. Simon Cowell didn’t think him ‘being him’ would work in America, I disagreed and when we went to America to launch American Idol I told him you better stick to the person you are because you start watering it down it doesn’t work. Fortunately for us it’s now the biggest show in the world.

What motivated you to set up Max Clifford Associates Limited and who were your first clients?

It came about because I was a local journalist, started a record column just to get free records which I use to review in the papers. Head Hunted by EMI records. Joined EMI in 1962, joined the press office. Was giving an unknown band to launch called the Beatles that did quite well. And then we launched Motown with Stevie Wonder, Marvin Gaye and all of those people. And it was just the right place, right time. There was no PR industry in this country. So when the chief press office at EMI went out formed his own company and asked me to go with him it was a natural thing. And again we were working with some of the Motown acts again individually as personal clients and then a lot of other people came along.  It was just the right place, right time.

Do you feel your childhood made you what you are today?

Obviously your mum and dad have a huge influence. My Dad was very musical he was a classical pianist. Mum was just very warm and took care of us all. But I think they both taught me, my brothers and sister to just be yourself. You are as good as anybody, your not better than anybody else, but you are as good as anybody and that was their kind of attitude and it has always been mine. Back your judgment. I played a lot of sport as a youngster, football, water polo and things like that. I think that gave me a lot of confidence as well, because sports is one of the few areas that you cannot hyper yourself to winning Wimbledon  or World Heavy Weight Champion you got to be good.

How do you give back?

I’ve been involved in the ‘Royal Marsden children Leukemia Unit’ for about 35 years, taking stars up there raising funds and raising awareness. I patron one of 4 children charities one called ‘The Chain Switches of Children Hospice’ near Guilford, ‘The White Lodge’ which is a disabled centre for kids. ‘The Oasis’ which is a centre that looks after children from broken down families and drug related problems and I help to raise them money. And ‘Why?’ “Because I like to and I can, and I suppose, because I want to”.

How would you describe your self in 5 words?

Gets a lot out and puts a lot back.

If you did want to get in to the PR industry where would you recommend going to socialize and network?

I’m not a very good person to ask because I’m isolated; I don’t mix and mingle with them. I’ve got no interest in them. They kind of take themselves too seriously for me. I’ve never pitched for an account in my life. Probably you would get PR Week and I don’t know.

Do you meet people randomly and do business with them?

Yes, people come up to me all the time all over the world. I’ve just come back from Spain. I was part of a big charity golf weekend down there and during the course of that time two or three different people came up to me with this company and asked ‘Will you do PR for me?’

How do you select the clients you work with?

Just if I like them really.

Could you pick a random person from the streets and make them a star?

Yes, it gets easier all the time because of the people you know. And also because of the system and the way the media is.

Why do you feel people crave fame?

Fame equates to being successful rich and happy to most people, plus people like to be looked at like to stand.

Do riches equal happiness?

I think it is highly overrated. The happiest ones are the ones that see it for what it is. Whenever anybody comes I let them know there’s a lot of down side to fame. Try and make sure people that have been your friends for years, stay your friends. Because you get a lot of new ones that come along that are not interested in you but just your money.

Do you feel that you have left certain friends behind and can you still be friends with them?

Most of my mates are lads that I was at school with, or lads I played football with, or I played tennis with. One of them is a plumber, another is a local builder, one is retired etc. They are the real people. I don’t spend time with the people in this world (his work industry).

What is the biggest struggle you faced?

No, I’ve been very lucky. I mean everyone has dramas. My wife dying suddenly of cancer about 5 years ago, we been together 40 years and suddenly she wasn’t there. To kind of continue running whatever that was, probably the most difficult months of my life. In terms of clients, when you spend a lot of time as I do with kids that are dying that are 2 and 3. You can’t take all this seriously, you can’t worry too much because someone has got a huge ego, because they are worried, because someone didn’t applaud them or the ratings of their TV show are dying. Get a life.

How has the PR industry changed from when you first started till now?

It didn’t exist when I first started, but it is obviously a huge thing world wide now. It is far more sophisticated, far more complicated. You got the internet all these areas. But I think it’s a much bigger sea. When I started out, you knew 20 people and you had the country covered. Now there are thousands of people doing all kinds of things to do with the media. And of course we work on a worldwide basis as well, so it got far bigger than it was, far more complex, far more fast moving. There are so many more aspects to it. So I suppose it’s just a lot more complicated than it used to be.

You manage many people image’s how do you cope?

In an ever changing scenario, it’s like a game of chess; you are in the middle of a dozen chess board at any time, playing different games, because of all the different accounts, and different people you represent. But it is never boring.

How do you cope with knowing so much information?

It’s easy I forget most of it. It kind of pans out and works out. I’ve been lucky and I love it.

We met up with serial entrepreneur Jessica Huie, the CEO of ‘Colour Blind Cards’ and Founder of ‘Jessica Huie Public Relations’ in Westbourne Grove. She talked to us about herself, her business and how she over came prejudice. At just 29 years old she has achieved so many things from being her own boss to awards such as  ‘Enterprising Young Brit Award 2007’,  Evening Standard ‘Most Inspirational Entrepreneur Award 2007’,  ‘Precious Entrepreneur of the Year Award 2008’.

How would you describe yourself in three words?

Dynamic, driven, and kind.

How did your childhood shape the women that you are today?

I am the person that I am because it didn’t come on the plate, I mean by getting pregnant at a very young age forced me to either become a stereotype or do the complete opposite. I think if I hadn’t had the obstacles that happened in my life I would not be here today. (Laughs)

You said that your dad told you that you will become a statistic when you got pregnant. How did that make you feel at the time?

I felt guilty that I’ve let him down because he worked so very hard. Also as the eldest child of the family, he had big dreams for me like going to university. To say getting pregnant as a teenager is every parent’s nightmare. At the time I probably believed him and it was a statement that led me to act as a catalyst in me going to achieve things and back to education.

How did you get into PR?

I did my degree in journalism and decided to experiment with public relations. So I contacted Max Clifford who is the biggest publicist I heard of as a teenager. And I was lucky enough to get a work placement. After I graduated I went onto paid work as a journalist and worked for Pride Magazine for 3 years. I also worked on BBC London Radio and Choice FM for over a year. Then I went to work for Max full-time. I spent about 7 years there before launching my own company.

How old were you when you got in touch with Max Clifford?

I was 19 years old.

Who have you worked with over the years?

–Oh my goodness. (Laughs) Simon Cowell, Samuel L. Jackson, Mariah Carey… Prime Minister, there is so many.

Who was your favorite?

–Well, I enjoyed working with Simon because he’s a very down to earth and inspirational. (Humm) There are lots of different people just for loads of different reasons.

What skill do you feel you need to posses to work in PR?

You need to have good communication skills and be able to think outside of the box. I also find my journalism background really helpful because it helped me to know what I wanted to get out of a story, which of course helps me promote it in the way I want.

Tell us about your two businesses?

‘Color Blinds Cards’ (Laughs) is a multicultural greetings cards company; we are stocking in Clintons and we also have American distributions. The other one which is called ‘JH Public Relations’ is a PR company where we are looking after businesses, celebrities and lifestyle kind. It’s a very new company and we’ve had a great first year.

It must have been a big decision to leave your job with Max Clifford. What was the motivation behind it?

It was kind of a natural evolution, I’ve been there for a long time and I had secured some great relationships in the media which is really what PR is. (Humm) Relationships. Also my other company was taking off and I wanted more freedom to go to my daughter’s school assemblies and take holidays when I wanted to, so in order to do that, I needed to be my own boss full-time.

What is your greatest achievement?

My greatest achievement is my daughter being head girl.

What’s your motivation?

My daughter is and also I love life, I enjoy life so I strive on the next opportunity and the next experience.  And I am really blessed to have increasingly enjoyable experience.

Do you believe there are any secrets to your success?

I believe it’s a mixture of luck, hard-work and blessings.

What advise would you give to anyone starting their own business?

They will need to do some researches and make sure that there is a need for it. Make sure what you do is better than the services or whatever that’s already provided or you are doing something new. It’s either of the two. They will also need to have lots of self-belief.

What do you like to do away from work?

I like working out and also travelling. I also like reading and dance. I’ve got lots of different hobbies really.

Where’s the best place you’ve travelled to?

(Laughs) Wow I love Cape Town, Monte Carlo there’s so many.

What is your favorite food or dish?

(Laughs) I like strawberry cheese cake, Haagen-Daz ice-cream. (Laughs) Does this count?

What does the future hold for you?

We’re launching a US office for the Pr Company in 2011 and we are also about to launch a real exiting new line for ‘Colour Blind Cards’ which is set to make it a global US recognize cards. I can’t say too much about that. But there’s also a gift line which is new territory.

Christelle Dasse

At 12.30pm today, Tuesday 22nd June 2010, Chancellor George Osborne announced details of the coalition government’s first budget designed to tackle the UK’s deficit.

Here are some of the key points that will affect your finances:
Tax Income Tax

• The personal allowance threshold will increase by £1,000 to £7,475 in April 2011.
• Higher rate tax payers will not benefit from this increase.
• The higher rate income tax threshold will remain frozen until 2013-2014.

VAT

• The standard rate of VAT will rise by 2.5% to 20% from 4th January, 2011.
• The VAT exemption on zero rated items – such as children’s clothing and certain foods – will be upheld throughout this parliament.

Council Tax

• Council tax will be frozen for 1 year from April 2011.

Capital Gains Tax

• CGT will remain at 18% for those on low and middle incomes.
• Higher rate tax payers will see the rate at which they pay CGT rise to 28% from midnight tonight.
• The annual CGT exemption threshold will remain at £10,100.

Fuel duty

• There will be no increase in fuel duty.

Alcohol & tobacco duty

• There will be no increase in duty on alcohol and tobacco.
• The recent increase in duty on cider will be reversed.

Some people think that mixing business and pleasure is a good idea as sometimes work can get boring and a little frolic and fun will not do any harm. Others think it is a bad idea as people can get emotionally involved. Work starts to become a soap opera where emotions start to become a part of the workplace, which could affect the business.

The fact is we practically live at work for most of our time. The people we interact with the most are not our friends and family but are actually the people we work with. The true ingredients to the successful relationships which happen around us are communication and things which you have in common.

In logical aspects it starts to make sense to have a rendezvous with one’s work colleague! Logical sense as in they would know exactly everything that happened in the working environment on that day and would be more understanding and sympathetic if you had a hard day at work.

However there are some businesses, which strictly enforce the rule of no fun; where work is strictly for work! However, with rules like this enforced, as humans do we not have that rule in our head where ‘rules are there to be broken’. It is what we are not allowed to do, which sometimes tempts us the most.

The unfortunate thing is that we are only human and pleasure is a part of our human nature, which cannot be helped, including in the business world. The fact is there is just too much fraternising where human interactions are concerned. Business or no business! So should business be strictly kept to business? Business and pleasure, is it really a good idea to mix the two together?

Article by C-Jay Micu

Inside Success investigates to find out what people really think.

‘It’s a pretty basic understanding with most that whilst being at work there is a strict line between being professional with your colleagues and being sexually intimate with them. Mixing business with pleasure is taboo talk in the office and is usually in most cases scrutinised. It’s advisable that a person shouldn’t get involved with a co-worker, as it could implicate and jeopardise your work status and rapport with others in the work place. In saying that, I’ve met a handful of people that have benefited from relationships in the work-place, managing to bond with contractors.’

Reia Espiratu – Apple

‘Yes, you can mix business with pleasure, but you have to make sure that you have a balance. As with everything in life, having too much of one thing is not good for you.’

Maria Maca – Business Link

‘Yes, providing you both know where you stand – as in if you are in an exclusive relationship or not, if other people know you are together or not. I wouldn’t think it would suit people who are more on the emotional side though.’

Charlotte Brown – Barclays

‘I think you can mix business and pleasure if you have a plan and stick to it.  Look at all the power couples that are around us … it’s inevitable that we spend more time on our business and the people in our network’

Andrea 24, CEO of  Playvybz.com Radio and Training Academy

The very first thing you should do when you plan your business website is define its purpose. What objectives do you want your website to achieve? In other words, what do you want our visitors to see, to read and to do. To do is the most important set of objectives so you want your website objectives to be action oriented. Do you want them to sign up on your list, get your RSS feed, buy a product or take a survey? Any of these can be objectives. Just make sure your objectives are clearly defined.

Never create a website without having strategies and tactics in place to reach your business objectives

Once you know the objectives of your website you want to create strategies around how you’re going to accomplish these objectives. Strategy gets into how you’re going to do what you’re setting out to do with our business website. The more thought out and researched your strategies, the more likely your marketing and your website, overall, will be successful. From a strategy comes our plan of action, which gets us into tactics.

If you’re like most people, you’re pretty good at thinking about what you want to do with your business website. Often, where the trouble begins is when you have go from thought to action. That’s where tactics come in.

Never create a website without an action plan for visitors

We said earlier that your website should have clearly defined objectives. Once you’ve identified what your objectives are, it’s likely they require an action by your visitors for you to achieve. So tell them to take the action. Make it exceptionally clear that if they’ve gotten this far in your website, that ‘this is the action step you want to take next.’ Could be a list sign up, a free report, a set of articles – doesn’t matter (as long as it’s toward your business objectives). Just be sure you’re hyper-clear about what action steps you want your visitors to take.

Never create a website without having measure to assess your progress

The good thing about the internet is that if it happens on your business website, you can measure it. Which means, you can find out amazing detail about how your visitors as seeing, reading and using your website. So the only question is, are you recording that information?

What’s sad is that I see so many small business owners who aren’t even looking at their most basic website statistics. Yet, it’s so much easier to know how effectively your building your list, for instance, if you know how much traffic you’re getting. And from knowing that, you can make a plan for increasing you list sign ups.

Never allow information to be come outdated

Don’t make the mistake of leaving dated content on your website. Keep the information on your site current. Remember to update phone numbers and take off dated special offers or coupons. Make sure someone on your staff is responsible for the site’s information and checks and updates it routinely.

Never let you website go down.

It is funny how many small business websites are here today, gone tomorrow, then are back up again next Tuesday. It’s vital that your site is available when customers look for it. Many customers will come back to a site several times before actually making a purchase- if it’s disappeared, you can kiss the client goodbye. Make sure your site is up by either assigning an employee to check it several times a day, or using a service to notify you if it goes down.

Article by Simon Davis

Marketing is one of the functions of business that is often misunderstood and therefore is not being used properly within a business. You will discover that the businesses and people that need marketing the most are often the ones that don’t do it. On the other hand the businesses that many a layman would say do not need marketing as they have succeeded already have grown and perhaps dominate the market.

Another one of the problems I have noticed especially amongst small businesses is that marketing is too often mistaken for so many things it is not. For instance:

• Marketing is not promotion
• Marketing is not advertising
• Marketing is not leafleting
• Marketing is not PR
• Marketing is not selling
• Marketing is not getting a product to market

Then what really is ‘market’? The simplest definition of marketing is getting the right product at the right price through the right promotion to the right place. Marketing is a function that contains all these things and not just one of them.

In fact the reason that a lot of people with potentially good business skills are not in business is because of their lack of understanding and proper use of marketing. For instance one of the key questions that face anyone in setting up a business is ‘do I have the right products or service?’ It is a question every businessperson asks themselves. And their inability to tell or not often creates cold feet and the business is never launched. But likewise the reason why a lot of businesses are facing problems is because of a lack of a well-developed marketing function, which small business often see as optional and an area for cost-saving. For instance you have a lot of businesses that will set up without considering whether or not the product or service is right. There are a lot of people out there who are conceited and programmes like X-Factor and Dragons Den clearly prove this. Don’t rely on your Gran and your Mam! Or you may very well end up short of a few bob and even owing.  However, as I have stated earlier marketing is not just about getting the right product, or right place etc. but all of these things.

If you ask or look at any successful business about the marketing function in their business they will tell you it is a consistent and constant function of their business. Not just for launching their products or services and increasing sales but also maintaining marketing share.

Any one of these factors could cause your business to fail.

For instance if you feel something is a very high price then you are likely to have low sales.

Again if you advertise in the local newspaper and your client group only reads the Telegraph you are not likely to get the impact you desire.

However this is a very simplistic view of how these factors may influence business, which was used to drive home the significance of each of the 4 P’s of marketing to your business (using just two of them). Things are a little more complex than this – for instance it is not strictly true that the higher the price the lower the demand. In some cases the higher price could increase the demand for a product. It depends on who you are selling the product to. Hence in dealing with each factor you need to consider the others as well.

The 4 P’s of marketing, otherwise known as the marketing mix, is an important business tool major companies use to achieve their marketing strategy. By offering a product or service with the right combination of the 4 P’s you can improve the effectiveness of your marketing.

The marketing mix can be likened to making a cake – there are basic ingredients to making all cakes: flour, milk, eggs and sugar. However, a child’s birthday cake will require a different recipe from a wedding cake. The marketing mix works in the same way, with the key ingredients being product, price, place and promotion but how you use these ingredients will differ depending on the product or service you provide.

James Kemsey (JK) Wilkinson opened his first Wilkinson Store in Charnwood Street, Leicester in 1930. In 2005 Wilkinson launched its Internet shopping service, offering over 800,000 product lines for sale online. Wilkinson currently has over 300 stores, which carry an average of 25,000 product lines. 40% of these are Wilko ‘own-brand’ products. The company’s target is to see this element grow and to have over 500 stores by 2012.

The question however is how did Wilkinson go from being a corner shop into a major supermarket brand despite the huge amount of competition?

Wilkinson built a successful brand by marketing currently getting the right product at the right price through the right promotion to the right place.

Here are recent examples of Wilkinson using the 4 Ps to increase the penetration of their brand and shops: they targeted the student population, knowing their prices would appeal and their product had already gained acceptance. The issue however was how to get to market and make the most awareness of their products.  Many businesses at this stage would have thought ‘throw money at it’ in the local press or student press, however research showed the best channel to market in was the fresher fairs.

Hence saving a whole lot of money on wasted promotion and big splashes on TV.

Introduction

The importance of business planning is widely documented; however, guidance as to what constitutes good business planning is less clearly defined. This article aims to redress that imbalance by describing 10 of the most common mistakes that occur in business plans.

While the business-planning process is in itself a very worthwhile pursuit, most business plans are produced for a specific purpose. The plan is used as a means to convey an idea with a view to achieving a specific goal, e.g. securing funding. Hence the plan needs to be tailored with the audience in mind, and good knowledge of their requirements will help shape a winning plan. For example, the requirements a Venture Capitalist will have in assessing a plan seeking to secure a million-pound investment will differ considerably from those of a local bank manager who needs a plan to support a small-loan application. While the former will be primarily looking for capital growth, the latter will be more concerned with security. Regardless of the specific purpose of the plan, these following business plan lessons will apply.

1. Incredible Financial Projections

One of the key areas business plan readers will focus on will be ‘the numbers’. Specifically, they will concentrate on the projected Income Statement or Profit & Loss. The fact that numbers are projected does not mean that those figures can be included without due rigor or process. They need to be credible, defensible and consistent. Of course forecasting is not an exact science, and the use of proxies can help the author ensure that the figures included are plausible and consistent with the story being told in the other areas of the business plan. The figures must also show an ability of the company to generate free cash flows so that the business can be run profitably while satisfactorily servicing their debts at the same time.

All costs should be recorded including salaries to owner managers who run the company. It is not credible to generate P&L projections where expenses such as salaries are omitted to demonstrate managerial commitment or to artificially reduce losses, etc. By the same token, no investor will be prepared to fund a business where the projected salary payments are excessive. While dealing with finances is not everyone’s strong point, there has to be someone on the management team who is cognizant with the maths. A business plan will need to include everything from break-even projections to proposed return on investments to cash flow forecasts, and one of the key players will have to converse on these subjects in a convincing manner.  They will also need to justify the numbers.

2. Lack of a Viable Opportunity

A business plan needs to not only describe an opportunity, it must also detail how the opportunity can be exploited profitably and demonstrate the company’s ability to deliver what is required.  In recent years there has been a significant increase in plans that are inaccessible to the average reader because they are couched in technical jargon and unfamiliar terms. If the reader of the plan cannot fully grasp who the prospective customer is, how that customer will be targeted, and the prospective benefits from the proposed solution, the reader will not invest. In an increasingly time-pressed world, people crave simplicity. Many business plan recipients will only scrutinize the Executive Summary and the financial, using these as the decision points as to whether to read further or not. Hence it is of paramount importance that both the executive summary and the wider plan describes the opportunity in readily understood terms, such as:

• What is the issue or pain point?

• What is the proposed solution?

• What are the benefits of the solution?

• Why are these benefits compelling?

• Who will benefit the most from these?

Once these are detailed, there will be greater transparency regarding the viability, or otherwise, of the proposed opportunity in terms of the company’s ability to profitably serve the target market.

3. No Clear Route to Market

All opportunities are only prospective ones without evidence that the target market can be accessed profitably. Many entrepreneurs are inherently product focused, concentrating their energies on ‘the idea’ to the exclusion of many other important elements such as how they intend to access their customer base. The growth in popularity of the Internet has certainly helped niche producers find geographically dispersed customers, making many more ideas commercially viable. However, it does not come without its challenges, as creating awareness online is both costly and intensely competitive. The business plan must include a comprehensive and credible analysis of how the company intends to secure access to their target market in a cost-effective manner. The low cost and barriers to entry for websites have resulted in the creation of hundreds of thousands of sites. Ensuring that a site stands out from the crowd is easier said than done. Knowledge of who the customer is and how they buy is very important, but identifying them and accessing them on an individual basis is much more challenging and costly.

4. Overestimation of Revenues

Another key element of the plan will relate to the size and value of the opportunity. Does the business plan describe a small local business-to-business opportunity with limited scalability/ return or is it a concept with widespread or even potentially global consumer appeal? While the description of the market opportunity will undoubtedly be couched in positive terms, an obvious danger relates to the innate optimism of entrepreneurs and their tendency to exaggerate every business opportunity. Hence the general interpretation of sales forecasts is that they will be optimistic but not excessively optimistic. Admittedly what constitutes ‘excessive’ is subjective, but the numbers will need to be justified and if it emerges that the figures are mere fantasy, the author will lose all credibility and it will significantly undermine any confidence the potential investor might have in the plan.

It is important to guard against this by use of proxies and conservatism when it comes to sales projections. Placing some rigor around the process of deriving credible revenue figures also serves the entrepreneur well by enhancing their awareness of some of the key drivers for revenue growth in their business. It will also help them to produce a more plausible business plan and will ensure that the author is confidently able to answer questions regarding the market opportunity – questions that will top the list of any prospective investor or bank manager. Statements like “the Market is worth £10 billion and growing and we are focusing on capturing just 1% of it” set off alarm bells in the minds of prospective investors.

A more appropriate method is to calculate the number of customers the business intends to capture and their average revenues. These two inputs are easier to calculate and also to justify in a wider discussion. For example, a restaurant can easily use comparables from other restaurants as reference points to calculate average spend per person. Hence the focus turns to predicting the number of covers likely per week which can then be scaled up to obtain projected monthly revenue figures.

5. Lack of Appreciation of the Importance of Good Cash Flow Management

A critical subtlety of any new business is the ability of the entrepreneur to understand the differences between cash and profits and to accept the fact that insolvency is probably the most significant threat to a business. Many businesses fail, not because they are unprofitable, but because they ultimately become insolvent (i.e., are unable to pay their debts as they fall due).

Good cash flow management is vital when businesses pursue investment opportunities where there are significant cash flows out, in advance of the cash flows coming in. The start-up phase of a business is an obvious time when cash flow is under stress with uncertain income streams sitting alongside a raft of certain and often overdue bills.

This tension is exacerbated if there are delays to the income streams, e.g. if a restaurant fails to open on time.

Once up and running a company can bank the income immediately if they are a ‘cash-only’ business; however, if they sell on credit, they receive the cash in the future and hence may need to pay some of their own expenses before that income hits their account. This will put a further strain on the company’s solvency. A well structured business plan needs to reflect reality with likely losses in the first months of trading being expected and with financing provisions, e.g. overdraft limits, being put in place in advance of the predictable cash squeeze. A contingency figure should also be added as it is important to leave breathing space for the unexpected costs and overspends that always occur when least expected.

6. No Clear Objective

What is the main purpose of the plan? If it is to seek investment in the business, it is important to clearly describe the investment opportunity. As mentioned previously there is a tendency amongst entrepreneurs to focus myopically on ‘the product’ or ‘the idea’. This is where they expend most energy but alas that is only one part of the process. While the plan describes the concept in detail, it must also address the purpose of the plan. If it is to secure investment, one needs to recognize that investing is the investor’s area of expertise and they will be seeking an appropriate risk/ return for their investment. Their primary interest will quickly shift from the product once they ‘get it’ and ‘like it’ to assessing the ability of the company (including management) to generate free cash flows to enable the business to grow while also returning cash to them. They will also seek to understand:

• Why they would be better off investing in this business rather than leaving money in other asset classes?

• When will they recoup their initial investment?

• What is their expected return on investment?

• Is the investment merely cash or do they need to bring additional things to the table?

Once the primary objective of the plan is clear, the author will be able to ensure that the key requirements of the reader are met.

7. No Evidence of Real Demand

Another main area of interest when planning (linked to Point 4) is justifying the sales forecast or demand levels for the product or service. There are two main elements to forecasting – the use of facts and the use of subjective assessment/ judgment. However, no matter how unique a concept is, if the market is defined widely enough, it is likely that figures from alternative offerings (facts) can be used to help assess likely demand levels (judgment). The aim of sales forecasting is to come up with some revenue figures that can be considered to be credible in the wider context. While earlier we countenanced against excessively optimistic estimates, here we are delving deeper to ensure there is, in fact, real demand for the offering. Prospective investors will not want to invest at the very start where the risk is highest. Is there poof of concept in the guise of sales or firm orders? Have some sales occurred already? If not, why not?

Unless there is verifiable demand for the idea, the risks grow out of all proportion, particularly if the initial start-up or investment costs are high. Is it possible to test the idea in real time, either by identifying comparables in other geographic areas or analyzing Google search logs or selling via eBay? Again the business plan has to convincingly address the issue of demand rather than concentrate in isolation on ‘the idea’. For some investors, firm orders or evidence of sales will be the level of proof required and allusions to proxies or comparables will not be sufficient. Conversely if there are already strong sales volumes of the product and the company is facing financing or resource constraints which have forced them to seek investment, then the power shifts from the investor to the plan author.

8. Business Plan Inconsistencies

A business plan needs to be consistent throughout as all the various strands are brought together into one single entity – the plan. If there are multiple authors of the plan the risks increase that certain inconsistencies will emerge. Similarly any presenters of the plan must be fully cognizant of all facts and stay ‘on script’ so as to ensure that a cohesive story is being told. The numbers must also be consistent with the broader content so that there are no contradictions between them.

9. Playing Down the Competition

There is always competition. Yet the number of times the phrase “there are no main competitors” appears in plans is considerable. No matter how unique the proposition, there will also be some other business competing for the same scarce resource, i.e., people’s money. While competitors may not always be obvious in product terms, competitors emerge upon assessment of the key needs the product fulfills.

By broadening the definition of the market, substitute products emerge as ultimately all products and services serve to satiate a defined set of needs, be they physical or emotional. If competitors can not be identified then the search has simply not been diligent enough. Finally it is also important to consider the threat of entry. What will the competitive landscape look like in a few years? Are there significant barriers to entry, or is it likely that a successful entry will be followed by better-placed competitors with greater resources, etc. What will emerge as the bases for competition and will the company be well placed to compete on these bases?

10. Rushing the Output

The plan needs to be right the first time and the content needs to be accurate, clear and also without spelling or grammatical mistakes. More often than not business plans need to be completed by a certain date and hence the final stages can be rushed. Consequently, in many instances the final output does not do justice to the plan. Attention to detail at the end is vital, so it is important to ensure the following:

• The plan is printed on good quality paper and bound where appropriate.

• Tables and Charts have been edited to ensure they are formatted correctly.

• Content of the plan has been edited down to a digestible size (Addendum can be provided on request).

• Someone removed from the process has independently proofed the plan.

• If a presentation is part of the process, it should reflect the Executive Summary.

Summary and Conclusion

In summary, business plans generally have a purpose of communicating a course of action so as to garner support for the plan. Support inevitably means resources with the primary aim of the plan often being to secure financial investment. With this comes a certain obligation on the business plan author to ensure that the plan is prepared in as thorough a manner as is possible. By ensuring the above lessons are adhered to, the chances of the plan objectives being met increase substantially.

Alan Gleeson is the Managing Director of Palo Alto Software, Ltd., creators of Business Plan Pro® 11.0. He holds an MBA from Oxford University and an MSc from University College, Cork, Ireland. For further information on business planning visit www.bplans.co.uk and www.paloalto.co.uk

Why not try to implement some of the following techniques:

Indulge in a hobby – Many of us have interests we’ve been too busy for years now to develop. But there’s no more healthy way to take your minds off work than immersing yourself in some fascinating pursuit.

Do you love to be outside during the warmer months? Try your hand at gardening, even if it’s just in planters on your balcony. Have an eye for design? Take woodworking lessons and make your dream chair. Learn to create gourmet meals through cookery books or by taking a class. Take up a musical instrument. Do some volunteer work. The trick is to find something you love doing, and then – within your time and budget – throw yourself into it.

Take up a sport – Sport is a good way to clear the mind from the stress of work. Whether it is an individual or team sport, sport works the whole body and requires full attention. It can be a complete diversion away from work.

Eastern forms of relaxation – These have become a very popular form of relaxation in today’s society. So if sport is not for you why not try your hand at one of the following: yoga, tai chi, martial arts or meditation.

Be a connoisseur – Of course over-indulging in drink can have its downsides but a glass of wine or a few beers is seasoned practice after a long day at work. And if done right can be reasonably healthy.

Vent – Arrange with your spouse, partner, friend or someone who will allow you to offload for 15 minutes after a hard day. All they have to do is listen. Once the 15 minutes is up you must agree that work is done for the day.

Plan evening meals – Plan to have regular leisurely well-cooked evening meals with family and friends. A planned evening like this can open the mind to relaxation.

No work no matter what – This can prove difficult, but set yourself times where there will be no work no matter what. For example Tuesday and Thursdays 5 p.m. – 10 p.m. And let you work colleagues know. Make the practice become a religion for yourself.