Imp Business Plan
HOW TO WRITE A BUSINESS PLAN
The purpose of this note is three-fold:
To provide a set of guidelines on how to write a business plan.
To highlight what a prospective investor or banker is, and is not, looking for in such a plan. To provide a summary check list of the attributes of good business plans.
The note does not provide a magic formula to be followed. Indeed, business plans produced to a set formula (such as those produced using business planning software) lack authenticity and credibility. Ideally, the business plan should be your plan, conveying the distinctive character both of the venture and its proponents. That is why you should retain overall responsibility for writing it, not somebody else. By all means seek help with the plan but do not commission someone else to write the whole thing for you. Use this note as your guide or aide memoir.
The Purpose of a Business Plan
Any business plan has a dual function:
1. Internal:
Providing management and staff with a clear map, complete with signposts and milestones against which progress can be monitored and evaluated.
2. External:
Presenting the investment case to an outsider. This key function provides the focus for this note. Essentially, business plans are sales documents. What they are selling is your business idea, your product or service and, above all, you and your track record. But in selling these things you are also competing. Figures from the venture capital industry indicate that roughly 85% of all business plans are rejected almost at once, 15% are given serious consideration but only 5% reach the negotiating stage. Your target is that final 5%.
As with any sale, you should start by asking yourself:
Who is my target customer?
What are my customers’ needs? What exactly am I selling?
What do I want from my customer?
Banker, venture capitalist, private investor or a prospective family backer?
Return on investment and eventual exit option for a venture capitalist, security for a
The purpose of this note is three-fold:
To provide a set of guidelines on how to write a business plan.
To highlight what a prospective investor or banker is, and is not, looking for in such a plan. To provide a summary check list of the attributes of good business plans.
The note does not provide a magic formula to be followed. Indeed, business plans produced to a set formula (such as those produced using business planning software) lack authenticity and credibility. Ideally, the business plan should be your plan, conveying the distinctive character both of the venture and its proponents. That is why you should retain overall responsibility for writing it, not somebody else. By all means seek help with the plan but do not commission someone else to write the whole thing for you. Use this note as your guide or aide memoir.
The Purpose of a Business Plan
Any business plan has a dual function:
1. Internal:
Providing management and staff with a clear map, complete with signposts and milestones against which progress can be monitored and evaluated.
2. External:
Presenting the investment case to an outsider. This key function provides the focus for this note. Essentially, business plans are sales documents. What they are selling is your business idea, your product or service and, above all, you and your track record. But in selling these things you are also competing. Figures from the venture capital industry indicate that roughly 85% of all business plans are rejected almost at once, 15% are given serious consideration but only 5% reach the negotiating stage. Your target is that final 5%.
As with any sale, you should start by asking yourself:
Who is my target customer?
What are my customers’ needs? What exactly am I selling?
What do I want from my customer?
Banker, venture capitalist, private investor or a prospective family backer?
Return on investment and eventual exit option for a venture capitalist, security for a