Business Plan – Fundamentals
A business plan should convey your winning idea and clear shot at profit while being coherent, comprehensive, rational and defensible. Business plans commonly cover the following :
1. Executive Summary
The executive summary is your “elevator pitch”. It must therefore pique our interest even before the main document.
It should contain a brief yet persuasive overview of the business (i.e. current status and future plans) and in particular, highlight the product/service offering, the value proposition, the size of relevant markets and your marketing strategies, competitive environment and your strengths, management team and their expertise, funding requirements and utilisation, and our potential return on investment.
The executive summary is an independent element of the business plan. A reader should be able to read and comprehend the summary in five to ten minutes and be presented with a concise, compelling and defensible argument that you have the product/service the market really wants and that you have the credentials to turn your idea into a highly profitable business and most of all, you really understand your business.
All these points must then be elaborated in the following sections in the main body of the document.
2. Corporate Information :
- Company name
- Date of incorporation / commencement of business
- Website address
- Share capital (issued and paid-up)
- Shareholding structure
- Share options (e.g. employee options)
- Contact person, number and address
3. History / Background of Venture and Founders
4. Description of Product / Service
5. Business Opportunity
6. Revenue Model
7. Sales & Marketing Strategy
8. Competitor Analysis
9. Technology, Intellectual Property or Proprietary Advantage
10. Description of Organisation and Management Team
11. Proposed Development / Growth Milestones
12. Analysis of Risks & Mitigating Factors
13. Historical and Projected Financial Data
- Summary of latest audited and management accounts; and
- 3 year projection of profit/loss, cashflow and balance sheet together with underlying assumptions
14. Funding requirements, Proposed Utilisation and Expected Valuation
15. Exit Strategies
Assess your own business and determine if there are other important areas pertaining to the business which you should highlight or discuss in your business plan. The more complete your information, the faster the investment process.
We look for well thought out plans. Remember that your plan must not only convince us of the potential and viability of the idea but also that you are fully aware of and have carefully planned all the necessary steps and strategies to develop, operationalise and implement it.
- Be reasonable in your funding requirements, financial projections and expected valuation;
- Be factual and succinct. Avoid generalisations and sweeping statements.
- Avoid superlatives and over hyping (e.g. words like “first”, “best”, “state of the art”) unless substantiated or factual.
- Be objective.
- Keep it simple enough to be understood by the layman. Diagrams, graphics or flowcharts will be useful.
- Weaknesses must be acknowledged but suggest ways to mitigate them.
- Be accurate and honest – once you start losing credibility, your chances of getting funding greatly diminishes.