Laying it Out: Tips on Creating a Stellar, Fundable Business Plan

When it comes to pitching your start-up, Mother's advice rings true: you only get to make a first impression once. Your new venture’s business plan could be that first impression that gets you the right investors and advisers, or the reason your great start-up idea never gets off the ground.  Moreover, constructing a carefully designed business plan provides a framework for thinking through some of the challenges your start-up will face and can help you refine your strategies. 

Once you’ve developed your business plan, you can derive your elevator pitch – that pithy one  minute summary of the unique solution your product or service brings to a market need – and your investor slide deck – that 12 to 15 slide presentation that visually helps you communicate excitement about how your product or service tackles the market and makes for a successful business run by you and your team.

Most importantly, because your business plan tells the story of your new venture, make sure it is not only accurate and consistent with your business goals, but that it also communicates your ability to accomplish those goals. 

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 Elements of a Business Plan [CLICK to play SLIDESHOW]

Executive Summary – This is a summary of the sections that will follow, so write it last and make it compelling so that your audience wants to read further.  One or two pages to include:

• the opportunity (an unmet need) that your product addresses - may include a mission statement
• an explanation of how the product or service addresses the unmet need
• the problem you solve
• a summary of your market
  
• what sets you apart from others in the industry

• business model overview – how will your company make money
• brief biographies of the team
• is there something else key to the company’s success you currently have such as a recognizable customer, a fundamental patent, critical third party acclaim, or positive benchmarking results
• the amount of financing the company needs

Be prepared to back your claims with data.

Product / Service Description – A detailed explanation of your product or service highlighting its differentiating features to include:

• product / service features and their stages of development (Consider including a summary development road-map in this section, with more detailed explanations in an appendix.)
• proprietary rights (Did your company create or license key proprietary rights?)
• reliance on open source or other easily available components

Market Opportunity – A report of the market in which your product or service will compete:

• industry trends
• your experience in the market and feedback from potential customers
• projected growth
• competition
• barriers to entry

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Reports and studies, as well as large charts and graphs, can be added to an appendix.

Marketing Strategy – How does your marketing plan address and take advantage of the market opportunity you explained above?  Note that for some business plans the Product / Service Description may follow the Market Opportunity and Marketing Strategy discussions.  In addition to describing how your product / service fits and competes in the market, include: 

• prospective (and any current!) customers
• marketing channels
• pricing
• distribution
• key partnerships

Operations – What do you need to run your business? 

• physical space for development, production and headquarters
• equipment needs
• head count

Management, Founders and Advisers

• position and responsibilities
• experience
• education

Financial Information

• historical financial summary (or just expenses to date, if that is all the company has)
• summary projected profit / loss statements and cash plans for three to five years, including assumptions
• financing needs and use of funds description
• detailed financial information can be added to an appendix

Additional Hints:

• Describe only one business.  Although your marketing plan may include targeting several vertical markets for your customers, you will want to depict your business as a single, unified endeavor.  Even if your core intellectual property is for a platform product from which several products or services may be derived, you may need to concentrate your emphasis on an initial outstanding product. 
• There is always competition.  Competition may come from other methods of solving the market need, “in-house” solutions or even potential customers’ acceptance of the status quo.
• Be internally consistent and realistic.  Make sure your product directly addresses the market need you described, and that your product development strategy is structured to bring about the necessary features to deliver your proposed solution.  Your marketing plan and financial projections should respond to your market research, while being practical about the results you can achieve with the resources and time-frames set forth in your plan.    
• Enjoy telling your story!  Although your enthusiasm for this venture will be primarily communicated through an in-person presentation, your business plan can also evidence the passion that is necessary for entrepreneurs to succeed in breaking new ground.

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