Business Plan Score

How Does the Business Plan Score Work?

At the top of each page in the free Enloop business plan writing app, you’ll see a real-time score for the business plan you’re working on. This is the Enloop Performance Score™, or EPS. The score is a way to help you understand the odds of success for your business. The score is available in all membership levels, including the free membership. Anyone can create a business plan and see their score—for free.

Developing your business plan in the Enloop environment provides you with a unique opportunity to test many scenarios for your venture, using the scoring system as a way to refine your business model. No other business planning software offers this type of feature.

The scoring system is based on a scale of 0 to 1,000. A score of 350 or higher is considered ‘passing’ in the Enloop system. The higher your score, the better your odds of success.

Here's where the score appears in the app:

Free Business Plan Score

A Business Plan Writing App with a predictive algorithm

The score is a predictive algorithm that helps forecast the likelihood of success for your venture and is similar to common scoring techniques used by loan underwriters to evaluate the risk of loan defaults for business loans.

As you move through the app, you’re provided with constant feedback in the form of the always-visible score that updates in real-time as you interact with the system. Detailed information on each topic is always provided. As you write your business plan, you have the luxury of learning about each topic and applying that knowledge to your plan. This helps you strengthen your business model as you go and reinforces what you’ve learned.

How can the Business Plan Score help you?

Use the score as feedback to examine whether your venture is likely to be a sustainable business. Remember that the score is a prediction based on the data you’ve provided. It’s not a crystal ball. Rather, the score is a useful tool that can help you make better decisions.

What variables are included in the algorithm?

The patented predictive algorithm is derived from twenty-one quantitative variables that are important indicators of strengths and weakness for any business. The score uses no qualitative data—just the facts, as you’ve specified them during the data gathering process of building your business plan in the app. Each variable has different weightings based on the age of the company. Each company's financial metrics are compared to their industry's averages. How companies perform in comparison to their peers is a large factor in the score.  

Why new companies have lower scores

Statistically, new companies have shorter lifespans than existing companies—for a variety of reasons. One of those reasons is they likely were poorly planned and often just run out of cash. They’re not sustainable businesses.

For this reason, it’s difficult to score high as a new company because the variables in the predictive algorithm are weighted to match those lifespan statistics. Without evidence (such as a history of sales to prove the concept), new companies are just riskier. 

We created Enloop and the EPS scoring system to help you make better decisions in planning your business. Many new business owners over-estimate their financial projections, based on their zeal and passion. While passion is absolutely necessary (and part of the thrill of launching and running a business), an unbiased score can help bring projections back to reality by tempering emotions and allowing clear-headed business planning decisions.

For new businesses, projections that are above industry averages are penalized. Without a history of sales to prove a revenue model, new business owners can dangerously over-project sales. You need evidence to prove that your business will actually perform at a level higher than your industry's averages. A track record of actual sales will give you a better idea of your actual performance potential.

Why older companies have higher scores

Weightings are stronger for existing companies, as they have a statistically better chance of long-term survival. As the company ages, the score typically improves if its net profits increase over time. It’s a matter of proving your business model. You have to earn a high score.

Safeguards against ‘gaming’ the algorithm

The algorithm is designed with safeguards that prevent users from attempting to unrealistically inflate a score. Without evidence of success (actual net profits), overly optimistic and unreliable projections only harm your business. Additionally, lenders and investors will perform their own due diligence in analyzing your projections.

Ultimately, the score is as reliable as the data you input. Attempting to game the Enloop algorithm only causes harm to the business owners it’s designed to protect.

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