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Companies
Business Plan

Updated at 2014-10-13 08:15

Business plan is used to assure stakeholders, attract investors and help yourself plan your business development.

The whole business plan should be mainly written by one person so it stays coherent. Main focus is to solidify your objectives (what), strategies (how) and tactics (when, where, who). You should write so you know exactly what you are doing. You are probably wrong but it is your best shot.

Before you even staring to write out your business plan, figure out following:

  • What is your product?
  • Who are your customers?
  • Why would they buy it?
  • How will customers hear about you?

The following is an outline that creates a 10 page business plan, which is usually a good size to be shown to investors. You may want to create a shorter document depending on the context but the business plan should never expand over 20 pages. None is going to read it willingly after that.

Front Page (1 page): Contains document title, company name, logo, date, addresses and phone number.

Executive Summary (1 page): Summary of the whole business plan. This is the most important part. Most people decide whether they like the plan at this point.

1st paragraph is what your company does presented in a seductive way.
2nd paragraph is about your magic sauce what will give you competitive edge.
3rd paragraph is about your current status and following milestones.

Problem-domain (1 page): Prove that the problem you solving is financially attractive. Avoid citations, they make it less believable. Usually also includes company vision, so should match with the company's line of business.

Advantage (1 page): What makes your company more likely succeed better than other companies? Avoid motivational remarks and use hard facts. Note that patents are good to be mentioned but they are close to nothing in the real world.

# bad
You are energetic and hardworking.
Your team is brilliant and believe what they are doing.
You have ownership of licenses or patents.

# good
You have research done on the problem domain.
You have personal experience on the problem domain.
You have good personal connections on the field.

Competition (1-2 pages): Overview of the competition you are current having or will have in the future. Brief information how you are going to handle them. If you have no competitors, you have no market.

A chart that show what you can do but competitors cannot, and vice versa.

Marketing (1 page): What drives your marketing? How will you take your product to the market? What is the current market situation? You should show that cost of customer acquisition is less than lifetime revenue per customer. Related to web analytics.

Business Model (1-2 pages): How will you generate revenue? What do you sell? Who do you sell to? How do you sell? If you don't know, make your best guess. Related to monetization models and pricing.

Financial Statement (1 pages): Quarterly five year financial forecast in numbers and charts. No one is going to believe your numbers but people want to see them. Aim to underpromise and overdeliver. Plan your marketing costs. Consider providing a second page with key metrics that are related to your revenue and growth e.g. forecast on number of paying customers.

Team (1 page): Demonstrate that you have at least two people who are dedicating their lives to make this company a success. Previous company and university logos are good. State experience and strengths related to the problem-domain.

Milestones (1 page): Tell how you have progressed to this point without any outside funding. Tell how customers are interested or already using your product. Required equipment, location, employees, web pages, insurances, accounting. Never state that you will ship after exactly 12+ months, that just means that the shipping date will change.

Sources