Before you hire people, before you go to raise
money and before you start to seriously commit your own financial
resources, you must create a business plan for your venture.

Table Of Contents
In your executive summary, you
will need to summarize the value proposition of your business
in a 2 to 3 page narrative. You have to assume that the person
receiving your business plan does NOT have time to read your full
document. On average, the typical Venture Capital partner receives
3 to 5 business plans per week; he/she does not have time to read
them all. Your executive summary is the vehicle buy which you
hook the reader onto your idea and inspire them to want to read
on further.
In this summary, it is critical that you convey
to the reader the 5 main characteristics listed above:
1) a description of the product/service you
want to offer;
2) an overview of the marketplace and competitors
in your market place (here you'll need to emphasize WHY customers
will want to choose your product/service, instead of those from
established competitors;
3) a description of the technology required
to develop your products;
4) a summary of the resources needed to develop
the product and bring it to market; and
5) incorporation of feedback you have received
from those who have read earlier drafts of your Executive Summary.
- Describe the market you are serving:
- Define the value proposition of your products
(how will you compete price/performance/lower cost-of-ownership)
- Anticipate what the competition will do once
you introduce your product
- What Intellectual Property will you be developing
(click
here for tips on developing and securing your IP)
- Pricing
- Estimate the cost of your product. Is your product
economically viable?
- Assess yourself: Do you have a competitive advantage?
- Assess yourself: Are you a company or just a
product?
- Size the
TAM/SAM
- Identify the potential trends/technologies that
could effect the development and growth of the TAM/SAM. Disruptive
technologies.
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- Revenue Plan. Show
in detail how you plan to generate your revenue. You can do
this one of two ways. First, you can estimate the total size
of the market you want to target and then estimate the share
of this market you want to capture. This is commonly referred
to as a "tops-down" forecast. If this is how you want
to approach this task, we have developed a spreadsheet tool:
Mid-Range - 3 Year Forecasting Model which assists you in putting
together this type of revenue plan. Second, you can identify
the customers you want to target and then estimate the revenue
you will generate from each of these customers. This is commonly
referred to as a "bottoms-up" forecast. If this is
how you want to approach this task, we have developed a spreadsheet
tool: Revenue Forecasting Model
which assists you in putting together this type of revenue plan.
Click
here to visit our Business Tools section to download
these spreadsheets. They are listed in the Business Planning
Spreadsheets section.
- Profit & Loss Statement:
Click
here to view a Sample Income
Statement
- Revenues
- Product & Service costs (corresponding Gross Profit)
- Operating Expenses (Research Development and Engineering,
Sales and Marketing, and General & Administrative expenses)
- Operating Income
- Balance Sheet
Click
here to view a Sample Balance
Sheet
- Cash Flow
(Most important financial schedule in your business plan: 1)
how much cash do you need?; when do you get to break-even?".
Note: We have just developed a new
integrated financial plan spreadsheet which allows you to construct
a complete income statement, balance and cash flow forecast by
inputting your revenue, cost and capital expenditures. The spreadsheets
are formatted so that they can be used to present your plans to
management, board members and investors. This easy-to-use tool,
Integrated Business Plan Financial Forecast,
is offered in three formats: 12 month, 12 quarters (3 year), and
3 year annual.
Click
here to visit our Business Tools section to download
these spreadsheets. They are listed in the Business
Planning Spreadsheets section.
- Identify potential sources of funds
- Venture Capital
- Banks
- Angel Investors
- Large companies ("strategic investors")
Click
here to visit our RAISING CASH section with ideas on
how to raise funds and pitch to potential investors.
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