Overview of a Business PlanPurposes of a Business PlanWhat Investors Expect to SeeWhat Do Investors Invest In?What Makes a Good Plan?Main Sections of a Plan (1)Main Sections of a Plan (2)Main Sections of a Plan (3)Why Is It Hard to Prepare?Keep It Short and SimpleEdit, Edit, EditAny Questions?Overview of a Business PlanMHR 308July 9, 2002Purposes of a Business PlanTo get equity financing from a third partyTo get a bank loanTo determine what you have to do to launch and grow the businessForms your monthly operational budgetProvides specific objectives to achieveEnables you to share the plan with key managers, employees, and prospective advisorsSignals whether the business is worth startingWhat Investors Expect to SeeAn exciting, innovative business conceptA pro prietary product, or some other competitive advantageA sound revenue model (reflecting demand)Good return on investmentThe investment dealAn exit strategyWhat Do Investors Invest In?PeoplePeoplePeopleWhat Makes a Good Plan?Is the business concept sound?Can the company compete?Will it make money?Can it be understood?Is it realistic?Can we trust the entrepreneur to make it happen?Will s/he be unfazed by failure?Can s/he inspire and lead a team?Does it inspire confidence?Main Sections of a Plan (1)What is the business concept?What makes you think people will buy the product/service?Who are your competitors, and can you compete with them?How much do you know about your customers? (Who is your target?)What else can affect your business?Main Sections of a Plan (2)Who owns the company and who are the key managers?What experience do they have?How will you organize? What staff will you need?What is your market-entry strategy and marketing plan?What is your operations/production plan?How will you develop your next-generation product?Main Sections of a Plan (3)What are your financial assumptions and projections?How much capital will you need?When will you break even?What do you have to do before you can achieve your first revenues?What are the chief risks your business will face?And how will you cope with them?What is the investment deal or loan required?Why Is It Hard to Prepare?A lot of information to researchHard to make a case why the business will succeedHard to write clearly so that an outsider will understand it easilyHard to do it quicklyEverything has to mesh together consistentlyFigures have to be realisticHave to get a team together before going for financingKeep It Short and SimpleNo fancy colorsSimple formatting, fontUse consistent headings and subheadingsCome to the point – shorter is betterRound off dollar figures to nearest 100 or 1,000No decimals everNo dollar signsPut important but secondary information in appendicesEdit, Edit, EditWrite your first draft of any section quicklyBe prepared to spend at least as long, if not longer, editing and revising itIt’s when the real thinking gets doneEVERYONE IN THE GROUP SHOULD BE INVOLVED IN REVISING AND EDITING SECTIONSDevelop a way to do this smoothly with as little wasted time as possibleAny
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