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.
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.
Elements of a Business Plan [CLICK to play SLIDESHOW]
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- 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
- barriers to entry
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
- 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
- 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
- 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.