How To Analyze A Business Plan

Evangeline Marzec is a management consultant to small high-tech companies, and has been in the video games industry since 2004.As a published writer since 1998, she has contributed articles and short stories to web and print media, including e How and Timewinder.Look for experience, integrity and passion in the executive team.

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The most common reasons to perform a business plan analysis are to determine whether the business is a good investment or lending risk, or even whether to pursue the business.

Investors need to know how much risk the business represents, financially and operationally.

The plan must clearly describe the problem the company is solving or need it is meeting for customers, and then propose a solution.

Closely examine the alignment between problem and solution. This evaluation must take into account the product or service being offered, the operational capacity and efficiency with which the business actually can produce its product, and the quality of the proposed marketing efforts. The business plan should describe the competitive landscape in which the company operates, preferably by referencing Porter's 5 Forces or another well-established tool.

Also consider the writing skills and attention to detail that went into formulating the plan. This should be a concise "elevator pitch," not a summary of the business plan.

In one or two pages, it should convey the market opportunity and the uniquely compelling features of the business that will help it meet that opportunity.

Entrepreneurs that project capturing 20 percent market share in the first two years probably have unrealistic expectations.

Investigate the returns provided by the investment.

A thorough business plan should describe the businessâ??

finances, history, operations, competition and customers. The plan must persuade readers that a specific set of customers has a specific problem, then describe exactly how the business solves that problem better than the competition.