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Components of A Business Plan

The document outlines the key components of an effective business plan, including an executive summary, problem statement, solution, business model, marketing and sales plan, competition, management team, and financial projections. It recommends three types of plans - a summary plan (10 pages), comprehensive plan (10-40 pages for seeking capital), and operational plan (40+ pages for ongoing businesses). The most important sections are the executive summary, problem, and solution, which should convince readers of the problem being solved and value of the proposed solution.

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56 views19 pages

Components of A Business Plan

The document outlines the key components of an effective business plan, including an executive summary, problem statement, solution, business model, marketing and sales plan, competition, management team, and financial projections. It recommends three types of plans - a summary plan (10 pages), comprehensive plan (10-40 pages for seeking capital), and operational plan (40+ pages for ongoing businesses). The most important sections are the executive summary, problem, and solution, which should convince readers of the problem being solved and value of the proposed solution.

Uploaded by

anand
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Components of a

Business Plan

1
Why develop a
Business Plan?

“All the work you do in thinking up your


idea, testing it, studying it, and producing
it, has been for nothing if you can’t sell it.
Whether you start you own business to
produce and sell your invention,
subcontract out the manufacturing part, or
sell your rights in return for a percentage of
the proceeds, you need a business plan.”
- Pamela Riddle Bird, PhD, Inventing For Dummies
CEO, Innovative Product Technologies, Inc. 2
Why develop a
Business Plan?
“You've just come up with an idea. What to
do next? There is no exact order of what
you should be doing. But we like to
suggest two broad areas for inventors to
embark on. First, learn all you can about
running a business, even if you hope to
license your idea. Second, write a
business plan. Even if you hope to license
your idea, (and that's actually a rarity
among the successful inventors we've met)
you'll still need to have a plan.”
- Mark Ellwood, Past UIA Board of Directors 3
Why develop a
Business Plan?
“A business plan is vital for enterprises
needing investment, grant funding or
significant borrowing; more so for
innovation ventures, as the greater number
of ‘unknowns’ makes it even harder to
attract backing. But don’t make the
mistake of thinking that only other people
need your business plan. It’s primarily a
tool to reveal possibly awkward truths
about your business to you.”
- a Creative Investor 4
Three Types of Plans

• Summary Plan
– 10 pages, 3 important points
• Comprehensive Plan
– 10-40 pages, seeking capital or alliances
• Operational Plan
– 40+ pages, for going concerns, part of an
annual process

5
The Summary Plan

• The Business
– Legal Structure, Products or Services,
Management, Personnel, Record Keeping
• Marketing
– Target Market, Competition, Advertising
• Financials
– Summary of Needs, Use of Funds, 3 Year
Cash Flow Projections, Income Projections
6
The Comprehensive Plan

1. Executive 6. Marketing and


Summary Sales
2. Problem 7. Competition
3. Solution 8. Management
4. Business Model Team
5. Secrets 9. Financials
10.Current Status
7
Executive Summary

• Define problem, solution, business model,


and why your solution is better
• Write it last
• Grab readers attention
• No more than 2 pages!
• Most important part of your plan and
usually written last

8
Problem

• What problem are you solving?


• Describe how the “state of the art” is
insufficient
• Get your reader to agree that the current
situation isn’t optimal
• If there isn’t a problem, take your idea back
to the drawing board

9
Solution

• How do we solve the “Problem”?


• Explain what you sell
• State your value proposition

10
Value Proposition
Worksheet

• First Sentence:
– For (target customer)
– who (statement of the need or opportunity),
– the (product/service name) is a (product/service
category)
– that (statement of benefit).
• Second Sentence:
– Unlike (primary competitive alternative),
– our product (statement of primary differentiation).

11
Business Model

• Explain how you make money


– Who pays you?
– How do you collect?
– What are your channels of distribution?
– How do you integrate suppliers?
• Use examples if necessary
• Be complete

12
Secrets

• Describe your technology, process


improvement, etc.
• Use charts, diagrams, schematics, as
much as possible
• Understand your Intellectual Property

13
Marketing and Sales

• Define your primary, secondary, and other


audiences
• Show some numbers
• How will you find, sell, and retain
customers?
• Advertising and promotion budget
• Identify your leverage points

14
Competition

• Everyone has competitors!


• Provide a complete view of the competitive
landscape
• Direct and indirect competitors
• Current and anticipated competitors
• Competitor strengths and weaknesses
• Your competitive advantages
15
Management Team

• Describe your key players


– Management Team
– Board of Directors
– Board of Advisors
– Major Investors
• Who are you missing?

16
Financial Projections

• Cash Flow Projections


• Income Projections
• Balance Sheets
• Assumptions

17
Current Status

• Describe your major milestones and tasks


– Technology
– Fundraising
– Customer Development, etc.
• Where are you now?
• Brag about your accomplishments
• Talk about the next steps

18
Investor Pitch Slides

10/20/30 Rule
1. Title 6. Marketing and Sales
2. Problem • Competition
3. Solution • Management Team
4. Business Model • Financials
5. Secrets • Current Status

19

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