Business Plan Preparation:   Concepts and TechniquesNov 10, 2012   Business Plan Preparation   1
Agenda     •   Target Audience for Business Plans     •   Purpose of Business Planning     •   Preparatory Work     •   Re...
Target Audience for                 Business Plans     •   VCs / Angel investors     •   Potential senior employees     • ...
Purpose of Business Planning    •   Tangibalizing the vague ideas    •   Quantifying the approximate numbers    •   Freezi...
Preparatory Work     •   Information collection     •   Validation of the assumptions     •   Analysis and planning     • ...
What is a financer looking for in a BP?      •   Basic value proposition      •   Market size, segmentation, target custom...
What is a financer looking for in a BP?      •   Team (Project management, execution capabilities)      •   Scalability an...
What is a financer looking for in a BP?      •   Revenue model: Sources of revenue          (service/product mix)      •  ...
Document Structure     1.    Executive summary     2.    Introduction / Company overview     3.    Concept / Proposition /...
Some Tips and Tricks•   Look for spelling mistakes•   Provide a table of contents•   Check page number consistency•   Do n...
Common Pitfalls in Business Plans •   Too verbose and long •   Speak in generalities and management theories •   Weak or n...
References   Venture Finance        http://www.vfinance.com        http://www.nvca.org   Small Business Issues       ...
Concluding Remarks•   Business plan preparation is a serious    process which takes about 2-4 months•   The Founder CEO is...
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02 prepare business plan

  1. 1. Business Plan Preparation: Concepts and TechniquesNov 10, 2012 Business Plan Preparation 1
  2. 2. Agenda • Target Audience for Business Plans • Purpose of Business Planning • Preparatory Work • Reader Expectations • Document Structure • Some Tips and Tricks – Common Pitfalls • ReferencesNov 10, 2012 Business Plan Preparation 2
  3. 3. Target Audience for Business Plans • VCs / Angel investors • Potential senior employees • Bankers • Accountants • Leasing companiesNov 10, 2012 Business Plan Preparation 3
  4. 4. Purpose of Business Planning • Tangibalizing the vague ideas • Quantifying the approximate numbers • Freezing the milestones and deliverables • Estimating the funding requirements • Sizing up the scale of operationsNov 10, 2012 Business Plan Preparation 4
  5. 5. Preparatory Work • Information collection • Validation of the assumptions • Analysis and planning • Articulation of your basic value propositionNov 10, 2012 Business Plan Preparation 5
  6. 6. What is a financer looking for in a BP? • Basic value proposition • Market size, segmentation, target customers, competitors • Entry barriers, IP protection, Unique Selling Points • Technology expertise and domain knowledge • Alliance and strategic partnerships • Promoters, Board of Directors, Top management (Business Heads, VPs) Nov 10, 2012 Business Plan Preparation 6
  7. 7. What is a financer looking for in a BP? • Team (Project management, execution capabilities) • Scalability and growth potential • Marketing and selling plan: channels, distributors, customer acquisition costs • Milestones and deliverables (prototype, proof-of- concept, customers) • Requirement and application of funds: Setting offices, where, how many? • Equity/Capital structure, financing policies (debt/equity ratio) Nov 10, 2012 Business Plan Preparation 7
  8. 8. What is a financer looking for in a BP? • Revenue model: Sources of revenue (service/product mix) • Profitability, break even point, growth estimates (revenue, team size) • Risks and contingencies: De-risking/risk management/risk containment plan • Sensitivity analysis • Projected (pro-forma) financial statements • Exit strategy (IPO, equity buyer, strategic buyer, Merger & Acquisition) • Valuation and offer Nov 10, 2012 Business Plan Preparation 8
  9. 9. Document Structure 1. Executive summary 2. Introduction / Company overview 3. Concept / Proposition / Product description 4. Market opportunity 5. Competition survey 6. Development plan and milestones 7. Marketing plan 8. Team 9. Financials 10. Offer 11. AppendixNov 10, 2012 Business Plan Preparation 9
  10. 10. Some Tips and Tricks• Look for spelling mistakes• Provide a table of contents• Check page number consistency• Do not use too many colours and fonts• Explicitly add confidentiality clause in the beginningNov 10, 2012 Business Plan Preparation 10
  11. 11. Common Pitfalls in Business Plans • Too verbose and long • Speak in generalities and management theories • Weak or non-existent financials • Inadequate competitor analysis • Unnecessary details about promoters and their past track record Nov 10, 2012 Business Plan Preparation 11
  12. 12. References Venture Finance  http://www.vfinance.com  http://www.nvca.org Small Business Issues  http://www.sba.gov  http://www.startupjournal.com  http://www.bplans.comNov 10, 2012 Business Plan Preparation 12
  13. 13. Concluding Remarks• Business plan preparation is a serious process which takes about 2-4 months• The Founder CEO is perpetually writing a business plan (besides doing many other things)• Fund raising itself takes 3-5 months• Business plan must be treated as dynamic document with a potential for continuous and incremental improvementNov 10, 2012 Business Plan Preparation 13

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