Specific Guidelines to Business Plan Preparation

1. Specific Guidelines
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BUSINESS PLAN PREPARATION

2. PURPOSE OF BUSINESS PLAN
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 Provides clarity of thought and purpose
 Allows you to think through your business A-Z
 Introduces Business Model
 Introduces the company and the team
 Attempts to persuade investors
 Highlights risks and challenges
 Serves as an entry point for further discussions

3. Qualities of a good business plan
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 Well structured
 Simple but informative
 Concise
 Attractive
 Understandable to a 15 year old
 Use Diagrams and Charts to make your BP
attaractive

4. TARGET AUDIENCE
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Who is the Plan for –Internal or External
firms that see many plans
Usually smart and knowledgeable
Referrals – very critical VC’s objective to assess
quantum, type, and manageability of risks
Hence, business plan is an important document
though not the “be-all, end-all”
A must for launching a new business or changing
(growing) an existing one

5. BP answers the following questions
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 What is your current situation
 What is your goal
 How will you reach the goal
 What will you offer
 How big is the business you are entering
 Who are the key players
 How will you differentiate yourself
 What are your marketing plans
 What are the economics of your business
 What is the capital requirement to get your business
started of growing the business

6. Executive Summary
Company Description
Product/Service
Market Analysis
Target Market
Market Size Market Trends
Key success factors
Competitive Analysis
Marketing Plan
Overview
Product
Price
Place
promotion
Operations Plan
Financial Plan
Overview
Set up Cost
Cash Flow Forecast
Management Team
Conclusion
Business Plan Contents
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7. Executive Summary
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The most important section of the plan,
often the only read section!
Compact version of the big plan
Stick to hard facts; no room for
exaggerated optimism
Limit to a concise summary;
no more than a couple of pages
Summary is the prelude to further
meetings

8. Executive Summary 2
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 Summary should answer questions:
 What sort of company is it?
 What’s the product/service and what’s special?
 Who are the managers?
 How much money do you need? In what stages?
What will it be used for?

9. THE COMPANY DESCRIPTION
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 A brief history of the company
 How you started? What was the original
idea? Share your mistakes and what you
learnt; adds credibility
 Share financials; actual vs. planned; if
applicable
 Should lead up to the discussion as to
where you intend to go from here

10. PRODUCT/SERVICES
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 What is your value proposition?
 How are you going to solve their problem
better than your competitor?
 Than what they are doing now?
 Any patent protection possible?
 Technology details: defensible? Unique?
Sustainable competitiveness?
 Time to market? Ability to execute?
 What prevents someone else from doing it
more cheaply?

11. MARKET ANALYSIS
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 Who is your target market?
 Profile of the people? What is their behavior
pattern?
 Any complementary products or services?
 How large is your market? Growth rates?
 What are the trends in the market?
 How do you see the market evolving?

12. MARKETING PLAN
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 Detailed note on how you will convert large
market into revenue
 Provide different marketing tactics – cheapest to
most expensive
 Costs and strategy of acquiring customers
 Sales and Marketing strategies
 Respect your competitors
 Risks and Unknowns
 Strategies for reducing risks

13. OPERATIONAL PLAN
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 How will you make the product or
service ?
 How will it be available to your
customers?
 What’s involved in running the
company?
 Location, equipment needs
 Labor requirements
 Risks at different levels and how
best to mitigate risks

14. MANAGEMENT TEAM
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 Provide CVs of the key members
 Relevance of past experience
 Start-up experience
 Market creation experience
 Team dynamics – very critical when more
than one founder
 Clarity of roles
 GREAT TEAM + MEDIOCRE PLAN =
 MEDIOCRE TEAM + GREAT IDEA =

15. FINANCIAL PLAN
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 Detailed numbers not the key
 Assumptions very critical
 Key drivers of revenue
 Realistic projections
 Exercise prudence
 Benchmark your model
 Revenue estimate: bottoms-up
 Expenses – past and/or industry average

16. FUNDING
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 Capital –
 Brand building
 Scaling the business
 Funding based on 18 – 24 months
projections?
 Till customer traction?
 Choose funding partner with care – it’s a
marriage!
 Exit strategy for the investor; not the
entrepreneur
 Exit could be merger, acquisition, or IPO
 Each strategy should be plausible and defensible

17. CONCLUSION
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 A WEAK PLAN IS BETTER THAN NON AT ALL
 YOUR PLAN WILL DETERMINE HOW FAR YOU
WILL GO
 A BUSINESS WITHOUT A PLAN IS A BUSINESS
GOING NOWHERE
 A BUSINESS WITHOUT A PLAN IS A BUSINESS
WITHOUT A VISION
 MY ADVICE : PLAN PLAN PLAN
 THANK YOU