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02: Drawing up a business plan for potential funders
| Article Index |
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| 02: Drawing up a business plan for potential funders |
| Page 2 |
| All Pages |
10 point Business Plan Outline
1 Executive Summary
2 Business Vision
3 Background and History
4 Product/Service
5 Market
6 Management
7 Sales Plan
8 Development Plan
9 Intellectual Property
10 Financials
Executive summary
• Maximum of 2 pages long
• 1 paragraph for each business plan section
Business vision
• Hardest part to be prescriptive about, but this is your chance to sell the concept
• This the only part of the plan where speculation and dreaming about the future is acceptable
Background and history
• Date of incorporation
• Directors
• Share capital
• Funding history
• Business history
• Business location(s)
Product/Service
• What is your offering
• What is your Unique Selling Point
• Explain to an appropriate level of detail
• Use diagrams, pictures and metaphors to get your ideas across
Market
• Size
• Customers
• Competition
Management
• CEO
• Founder (and inventor if business based on new technology)
• Chairman
• When and how will first sales be achieved?
• Licences or direct sales?
• Direct sales force or agency working for commission?
• Partnerships
Development Plan
• Provide evidence of a realistic and methodical approach to achieving your technical goals
• Show how the technology development plan is synchronised with the sales effort
• 1 page Gantt type overview
• Identify milestones or key decision points
Intellectual Property (if applicable) – what do you own?
• Patents?
• Know how?
• Barriers to entry – do you know of other intellectual property which might hinder your entry into a particular market?
Financials
• When will first sales be made?
• Back-up on cost data to support requested level of investment
• Sensible matching of costs and revenues
Some Do’s and Don’t’s
DO
• Your homework before approaching a funder
• Get an introduction rather than making a cold call
• Be aware that investors will be making judgements throughout their interactions with you
• Expect to provide references on yourself and your customers
• Admit weakness
• Identify gaps in your planning
• Talk about risks and the possibility of failure
• Pester your investor – be proactive
• Say no to his/her requests if they’re not sensible
DON’T
• Make claims you can’t substantiate
• Make your plan or presentation too long
• Use management speak or technical jargon
• Say there’s no competition
• Delay in providing follow-up information
Two final thoughts
• Regardless of how you perform on the day, if the underlying business proposition is sound, you will succeed
• Think of your investor as pitching to you rather than the other way round
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