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Part 5 of a 5-Part Series: Testing the Credibility of a Business Plan

When it comes to investment-based immigration, building a credible business plan should be the foremost priority. Of course, each immigration program has its own requirements, and those requirements need to be met, however, we commonly see prospective immigrants presenting business concepts that meet program requirements without much thought as to whether or not they are doing so in a way that is logical and believable. When adjudicators review business plans, they look at everything in context to make sure that all the pieces fit together in a manner that makes business sense.

This series presents some of the most common errors we see and how to avoid them.

Part 5: Exploring and Mitigating Weaknesses

Not all adjudicators are experienced in evaluating or understanding small businesses in the traditional sense. Regardless, adjudicators are trained to look for business plans that are logical and credible. In some cases, they will even spot-check the veracity of certain claims and information presented to them to independently verify what is presented.

In our experience, taking the approach of assuming that adjudicators will review a business plan with the same degree of scrutiny as a bank might, considerably increases the chances of positive adjudications. For this reason, we ensure that business plans present claims which are well supported and that they highlight weaknesses and add corresponding mitigation strategies.

A business plan can have any number of potential weaknesses to overcome, so they can’t all be represented in a short article. To illustrate the point, however, some examples are provided below, along with some potential mitigation strategies for consideration.

  • Weakness: A declining market outlook where market research indicates that the business’s industry or markets will not be growing (or will be shrinking) in the coming short to medium term.
  • Mitigation strategy example: In these situations, companies should present credible reasoning that growth can and will occur. Specific strategies may include: offering a unique product or service; competing on price based on an ability to source at a lower cost; the value of pre-existing relationships or signed long-term contracts; or support from a parent company, to name a few.
  • Weakness: Large competitors control the market.
  • Mitigation strategy example: It is not unheard of for a small company to break into a market controlled by larger companies, particularly if their size allows them to carry out business in a way that larger companies cannot. Some potential examples to illustrate this strategy may include: offering highly-personalized service or added convenience to customers; the ability to accept custom orders; or faster delivery if there is a market need for it.
  • Weakness: The applicant does not have experience in the market.
  • Mitigation strategy example: This is a common concern in immigration business plans. Generally speaking, the best solution for lack of direct experience in a specific market is to hire high-quality employees with the right connections and/or the right experience. The follow-on to this strategy, however, is that the business plan should anticipate paying appropriately for experienced employees.
  • Weakness: Product or service is new and not known in the market.
  • Mitigation strategy example: When a business is planning to launch a product or service that is new to a given market, the best mitigation approach is to find a way to present an indication of demand. Some examples might include: demonstrating success in another market; hiring a market research firm to survey the target market; trying to pre-sell a product or service; trying to speak to would-be target customers and getting non-binding letters of intent to provide independent “evidence” of demand.
  • Weakness: Financial projections do not ‘flow’ with the rest of the business plan
  • Mitigation strategy example: Often-times, in our experience, immigration business plans may have a disconnect between the text of the business plan and its logical connection to the financial projections. In these cases, one should identify the discrepancies and either ensure that the text of the plan is amended to fit the financial story or the financial assumptions should be reconsidered so that they are brought into line with the rest of the plan.

Ultimately, it is better to shine a light on business plan weaknesses so that they can be properly addressed, while at the same time using the chance to demonstrate an ability to turn weaknesses into opportunities with the kind of business savvy that is necessary to succeed in business.

By way of contrast, a business plan with no weaknesses at all may face additional scrutinization of its credibility. Worse yet, a business plan with weaknesses that are glossed over or ignored in the plan can lead to challenges that may be difficult to overcome or explain away after the fact.

This concludes our 5-part series.