When he completes his business plan, either for internal use or to present to capital sources, an entrepreneur often wonders whether it is ready or needs more work. He may not be sure his marketing strategies are sound or whether the financial projections he created are realistic. A solution is to have one or more trusted business associates review and critique the plan.

Read the full plan completely through and form an overall impression. Read it a second time, making notes in the margins about concepts that are not clear. Clarity is one of the most important attributes of a good business plan. If the reader doesn't get a clear understanding of why the business will be profitable, for example, she might stop reading. Look for completeness -- whether all the vital sections of a business plan have been addressed. Keep an outline of a well-written business plan nearby and compare the plan you're critiquing to this standard. Mark any spelling or grammatical errors you find.

Decide whether the business opportunity is adequately explained. Evaluate whether the size of the market is large enough to sustain growth and allow the company to achieve profitability. Review the explanation of market need -- why the target customers need or want the company's products or services. Look for compelling, tangible benefits for the customers -- some aspect of the product or service that saves them time or money.

Review the sources of revenues listed in the business model section and decide whether they are fully explained. The business model should show how the company will be profitable. Identify whether there is something special about the company's model that will cause it to exceed the profit margins earned by other companies in the industry.

Evaluate the explanation of competitive advantage. Make sure the business owner shows why his products or services provide benefits that are clearly superior to those of his competitors. Judge whether the competitive advantage is sustainable over time.

Review the company's marketing strategies. The strategies should be specific actions the business owner will take, not general statements of intention. The plan should contain detailed cost estimates for implementing each strategy. Look at the financial projections and decide whether the marketing expenditures are reasonable. Many business owners underestimate the cost of selling the company's products or services.

Scrutinize the management team and staffing section to determine whether the team has the necessary skills and business experience to execute the strategies. Identify gaps in the team that need to be filled. Look at the projected growth in staff and decide whether it is sufficient to perform all the management and operations tasks required to meet the company's revenue and profitability goals.

Review the financial projections and assumptions. Look at whether the revenue growth rates and forecast pre-tax profit rates are reasonable -- aggressive yet attainable. Make sure the plan includes a detailed explanation of how the line items in the revenue forecast were calculated. You should be able to replicate the calculations.

Tip

If you have quite a few suggested changes to the plan, let the business owner make them and then offer to do a second critique of the plan. Be sure your critique includes praise for aspects of the plan that are outstanding.