02 prepare business plan

Apr 12, 2023Apr 12, 2023 Business Plan PreparationBusiness Plan Preparation 11

Business Plan Preparation: Business Plan Preparation: Concepts and TechniquesConcepts and Techniques


AgendaAgenda

• Target Audience for Business PlansTarget Audience for Business Plans

• Purpose of Business PlanningPurpose of Business Planning

• Preparatory WorkPreparatory Work

• Reader ExpectationsReader Expectations

• Document StructureDocument Structure

• Some Tips and Tricks – Common Some Tips and Tricks – Common PitfallsPitfalls

• ReferencesReferences


Target Audience for Target Audience for Business PlansBusiness Plans

• VCs / Angel investorsVCs / Angel investors

• Potential senior employeesPotential senior employees

• BankersBankers

• AccountantsAccountants

• Leasing companiesLeasing companies


Purpose of Business PlanningPurpose of Business Planning

• Tangibalizing the vague ideasTangibalizing the vague ideas

• Quantifying the approximate numbersQuantifying the approximate numbers

• Freezing the milestones and Freezing the milestones and deliverablesdeliverables

• Estimating the funding requirementsEstimating the funding requirements

• Sizing up the scale of operationsSizing up the scale of operations


Preparatory WorkPreparatory Work

• Information collectionInformation collection

• Validation of the assumptionsValidation of the assumptions

• Analysis and planningAnalysis and planning

• Articulation of your basic Articulation of your basic value propositionvalue proposition


What is a financer looking for in a What is a financer looking for in a BP?BP?

• Basic value propositionBasic value proposition

• Market size, segmentation, target customers, Market size, segmentation, target customers, competitorscompetitors

• Entry barriers, IP protection, Unique Selling Entry barriers, IP protection, Unique Selling PointsPoints

• Technology expertise and domain knowledgeTechnology expertise and domain knowledge

• Alliance and strategic partnershipsAlliance and strategic partnerships

• Promoters, Board of Directors, Top Promoters, Board of Directors, Top management (Business Heads, VPs)management (Business Heads, VPs)



• Team (Project management, execution Team (Project management, execution capabilities)capabilities)

• Scalability and growth potentialScalability and growth potential• Marketing and selling plan: channels, Marketing and selling plan: channels,

distributors, customer acquisition costsdistributors, customer acquisition costs• Milestones and deliverables (prototype, proof-Milestones and deliverables (prototype, proof-

of-concept, customers)of-concept, customers)• Requirement and application of funds: Setting Requirement and application of funds: Setting

offices, where, how many?offices, where, how many?• Equity/Capital structure, financing policies Equity/Capital structure, financing policies

(debt/equity ratio)(debt/equity ratio)



• Revenue model: Sources of revenue Revenue model: Sources of revenue (service/product mix)(service/product mix)

• Profitability, break even point, growth Profitability, break even point, growth estimates (revenue, team size)estimates (revenue, team size)

• Risks and contingencies: De-risking/risk Risks and contingencies: De-risking/risk management/risk containment planmanagement/risk containment plan

• Sensitivity analysis Sensitivity analysis • Projected (pro-forma) financial statements Projected (pro-forma) financial statements • Exit strategy (IPO, equity buyer, strategic Exit strategy (IPO, equity buyer, strategic

buyer, Merger & Acquisition)buyer, Merger & Acquisition)• Valuation and offerValuation and offer


Document StructureDocument Structure

1.1. Executive summaryExecutive summary2.2. Introduction / Company overviewIntroduction / Company overview3.3. Concept / Proposition / Product Concept / Proposition / Product

descriptiondescription4.4. Market opportunityMarket opportunity5.5. Competition surveyCompetition survey6.6. Development plan and milestonesDevelopment plan and milestones7.7. Marketing planMarketing plan8.8. Team Team 9.9. FinancialsFinancials10.10. OfferOffer11.11. AppendixAppendix


Some Tips and TricksSome Tips and Tricks

• Look for spelling mistakesLook for spelling mistakes

• Provide a table of contentsProvide a table of contents

• Check page number consistencyCheck page number consistency

• Do not use too many colours and fontsDo not use too many colours and fonts

• Explicitly add confidentiality clause in Explicitly add confidentiality clause in the beginningthe beginning


Common Pitfalls in Business Common Pitfalls in Business PlansPlans

• Too verbose and longToo verbose and long

• Speak in generalities and management Speak in generalities and management theoriestheories

• Weak or non-existent financialsWeak or non-existent financials

• Inadequate competitor analysisInadequate competitor analysis

• Unnecessary details about promoters and Unnecessary details about promoters and their past track recordtheir past track record


ReferencesReferences Venture FinanceVenture Finance

http://www.vfinance.comhttp://www.vfinance.com http://www.nvca.orghttp://www.nvca.org

Small Business IssuesSmall Business Issues http://www.sba.govhttp://www.sba.gov http://www.startupjournal.comhttp://www.startupjournal.com http://www.bplans.comhttp://www.bplans.com


Concluding RemarksConcluding Remarks• Business plan preparation is a serious Business plan preparation is a serious

process which takes about 2-4 monthsprocess which takes about 2-4 months• The Founder CEO is perpetually writing The Founder CEO is perpetually writing

a business plan (besides doing many a business plan (besides doing many other things)other things)

• Fund raising itself takes 3-5 monthsFund raising itself takes 3-5 months• Business plan must be treated as Business plan must be treated as

dynamic document with a potential for dynamic document with a potential for continuous and incremental continuous and incremental improvementimprovement

02 prepare business plan

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