Business Plan Development
The goal for most of you is to get investor funding for a great business idea. Writing a great business plan is a requirement for getting venture funding. It is not difficult to write a business plan or executive summary that looks good enough to get an initial investor meeting, but most business plans do not have the depth and rigor of real business planning and do not get funded.
Business planning is the process of planning ahead for success and then executing on that plan. This site goes through the elements of both business planning and the business planning documents you need to prepare in order to have a great chance of being funded.
The situation:
- You are going full speed starting up/running your company…
- You have an Executive Summary outlining your business idea…
- Investors are interested, but you haven’t seen any money…
- You know you need a real business plan so more people can understand and fund your concept, but…
…business planning is hard
A great business plan requires…
- significant research and strategic thinking about the direction of the business
- the entrepreneur to challenge
deeply-held beliefs about the product/opportunity/market
- time commitment away from running the
business
- a level of detail and process that are
painful for the typical entrepreneur
- Strategy is all about making choices…generally tough ones.
- The
best strategies emerge from making the best choices
- Exposes your idea/thinking to critique
Click Add to Cart to Buy Each Document - Annual Membership Not Required. Download link will be sent to your email. Some mail systems incorrectly route the email to SPAM/Bulk folder, so please check there if not in your inbox.
Business Planning Document Templates |
Click Each Link For Free View Of Its Associated Document Template |
|
The complete set of business planning templates |
|
|
Alternative preference? Another set of business planning templates |
Your business plan is more
than a hot product or hot market:
Most entrepreneurs focus on either the market or the product – focus needs to expand beyond typical starting points
- Investors look for integrated thinking.
- They look at the --
- a) competitive landscape and how it impacts the go-to-market strategy and pricing
- b) which impacts the sales and distribution tactics and financial performance
- You don’t have to have every detail worked out, but your business plan must present an action plan to get there for every element in order to get past the angel or seed round of financing
Business planning is an iterative process of fact gathering, strategic planning, tactical planning, and review. The business plan is a document you write at the end of the process, and serves as the roadmap for your business for the next 12 to 18 months.
Sharpening Your Story – Outside Review:
- An outside perspective and constant testing and revision during the business planning process is critical to sharpening your story – it is easy to be in love with our own idea.
- Get at least 3-5 outside reviews (not including your mom)
- Use friends, business leaders, Board members, consultants – anyone who has industry experience
- Keep confidentiality in front of mind – keep tabs on confidential documents; get non-disclosure agreements signed if possible – though this is tough
- The outside review process ought to hurt and challenge your thinking or you are not getting the preparation you need for the funding process
Order of Outside Review:
- Test with “friendly” reviewers first – trusted friends with business expertise – those who know you are early in the planning process – but don’t waste your time on those who won’t give hard, frank feedback;
- Test with friends of friends with relevant business expertise next as “practice” for the investment community
- Finally take your story to the Investors
Solid planning produces several documents that
describe the business venture and each document serves a different purpose in
the funding process.
|
Document
Type |
Description |
Audience |
Primary
Use |
|
Executive
Summary |
2-3
page document giving the highlights of your business opportunity and
expected results |
§
Investors
§
Management
candidates
§
Partner
candidates |
§
Overview
of business concept; designed to get the first meeting |
|
Investor
Presentation |
10-15
page PowerPoint overview of business and business strategy |
§
Investors |
§
Overview
of business concept, markets, and operational strategy; designed to get to
the 2nd meeting |
|
Business
Plan Presentation |
30-50
page PowerPoint document describing all elements of the business and
business strategy.
More user friendly than written business plan. |
§
Company
management and employees
§
Investors
AFTER first set of meetings |
§
Detailed
description of idea/product, markets, business and operations strategy,
and expected financial results |
|
Written
Business Plan/Private Placement Memorandum (PPM) |
40-60
page document describing all elements of the business and business
strategy; PPM additionally includes legal/financial introduction and risk
factors |
§
Written
Plan: Company management and employees
§
PPM:
Investors |
§Written
plan: Detailed description of idea/product, markets, business and
operations strategy, and expected financial results
§PPM:
Fundraising Document - business plan PLUS risk factors |
PLUS, all of the documents above must be backed up by a rigorous financial planning and forecasting model.
Once you’re done with your plan documents you are ready for the fundraising process:
- Start making contacts in the investment community before your plan is done
- Prepare for in-person meetings. The depth of your planning and knowledge of what is off the page of the summary Investor Presentation slides will make the difference – this is why planning is often more important than the written pitch!
- Debrief after every investor meeting – think about the questions you were asked and how you can better prepare for the next meeting – don’t schedule your most important meeting first.
- Once you are on the Investor radar screen, you will likely deliver documents about your opportunity in the following order:
1. Executive Summary - Sent to VC, preferably not “cold” but with reference from mutual contact
2. Investor Presentation - 1st in-person meeting material
3. Business Plan/PPM - Deliver this once VC is interested in more detail
4. Due Diligence Binder - Research reports, actual financial results, operating details, etc
Crafting
a Business Plan Presentation:
The following slides present the components of a good business plan (whether written or in slide format)
- 0-50 slides describing major elements: concept, business strategy, operating plans, and expected financial results. 10-15 page subset can be used as leave-behind investor pitch
- Graphical in nature to powerfully and simply convey complex ideas; tells the whole story
- Complete and simple enough to be used by anyone in the startup firm to explain and sell venture opportunity and enough depth that investor can use to sell colleagues
Download
"How To Do It" Business Plan & Investor Pitch Videos
For
Annual Subscription Members
Only
You will need RealPlayer to view these videos - If you don't have it, click on the image below for free download.
