Introduction

Every business plan is proven to be false insofar as no business plan is ever executed on exactly. Its real purpose is for you the promoter to share your vision of the future and the plan for your company with those whose assistance you require, be they investors, bankers, future employees or strategic partners.

Every business plan should tell a story incorporating what we call the S-C-P.

The situation (the market, the industry players), the complication (the disruption, the new trend, the opportunity in the market) and the proposed solution (what your company proposes to do).

In any business plan you have to show:

Firstly the value hypotheses, why what you are doing will beat the competition. Is it lower cost, a unique focus, a unique differentiation or what?

Secondly you have to show your growth hypothesis i.e. how the company will scale and grow fast and generate sufficient profits to fund its own growth.

Most business plans are long on accounts and on straight line projections but short on a demonstration that

• You have insight in the industry in your targeting
• You have an exciting offering that is capable of fast growth and
• You have a clear path to realising an exit for your investors at the appropriate time.

Presenting the business plan

We like business plans that provide a lot of information in as few words as possible and covers the following 10 topics.

Company purpose

Define the company/business in a single declarative sentence.

Problem

Describe the pain of the customer (or the customer’s customer)

Outline how the customer addresses the issue today

Solution

Show how your company’s value proposition will make the customer’s life better.

Show where your product physically sits

Provide a number of use cases showing how the product is/will be used.

Why Now

Describe the historical evolution of your market segment

Describe recent trends, the disruptions that make your target market attractive and your solution possible.

Market size

Identify/profile the customer you cater to.

Calculate the over all size of the market, the total available market for your company and your target share of the market going forward.

Calculate the size of the market from the top down and from the bottom up.

Competition

List competitors

List their competitive advantages/disadvantages.

Product.

Describe the features, functionality, Intellectual property (IP) if any.

Set out the product development roadmap.

Business model

Describe the revenue model, pricing,

The average account size and/or lifetime value

The sales and distribution model

The customer/pipeline list

The team

Founders and management

Board of Directors/Advisors

Financials

P&L, Balance sheet, cashflows.

Capitalisation table

The investment required and terms.

It is a useful discipline to write a detailed business plan. However if raising capital from a venture capitalist the plan should be summarised in 15 to 20 slides covering all the topics above. This can then be supplemented with a detailed business plan if the VC is interested in engaging with your company and doing the due diligence that is always required before an investment offer is made to you.

Shay Garvey, Delta Partners