Have
you reached that all-important -- and often frightening -- moment when
you realize that your business needs more money to get to the next
level? Whether you're attempting to borrow a few thousand bucks from Mom
and Dad or you want to ask total strangers to pony up several million,
you’d better have your ducks in a row before you ask. In other words,
you'd better have a business plan.
People have differing views about the import of business plans. I've even heard some venture capitalists say they're not worth the paper they're written on. Instead, they prefer just an executive summary. Nonetheless, being able to describe your business, the industry you operate in and the potential market for your company is downright vital. And you won't generally address all of those aspects until you actually sit down and write up a plan. Here’s a checklist of the minimum information you should have in the plan, along with some nice-to-haves that will increase your chances of getting a "yes" to that dollar request.
People have differing views about the import of business plans. I've even heard some venture capitalists say they're not worth the paper they're written on. Instead, they prefer just an executive summary. Nonetheless, being able to describe your business, the industry you operate in and the potential market for your company is downright vital. And you won't generally address all of those aspects until you actually sit down and write up a plan. Here’s a checklist of the minimum information you should have in the plan, along with some nice-to-haves that will increase your chances of getting a "yes" to that dollar request.
An executive summary: This enables potential
investors to quickly determine whether it’s worth their while to read
your entire plan. Therefore put as much effort as you can into making it
a strong pitch to keep reading.
Company overview: The main purpose of your company,
including products and services as well as any proprietary technology
or other unique features. This is also a good place to include
information on the company’s history so far.
Company mission and vision: This is the biggest picture for your company -- the "why" behind what you do.
Investment rationale: Simply, how much you want and what you’re going to do with it.
Market and competition analysis: This covers the size of your market and who your competitors are for your product or service.
Marketing plan: This is the four Ps of marketing --
product, price, place and promotion. Remember that you'll want to prove
that you know how to generate revenue for your business.
Organization: The structure and
location of your organization are important measures of how well you’ve
planned for future growth. This can be a simple organization chart with
short explanations of roles, along with the address of your operation.
Management team: Your expertise and the skills and
background of your team members can mean the difference between a yes or
no on funding. Even if your experience is limited, talk about anything
that makes you and your team -- if there is one -- uniquely suited to
make your company a success.
Operations: How your organization runs. Consider using a flow chart.
Project execution: Do certain projects need to be completed before you can generate revenue? List them here with a plan for getting them done.
Risk analysis and mitigation: This is the section where you show that you are aware of the risks and have thought about how to deal with or eliminate them.
Financial plan: In this section, you'll need to
layout your funding structure, which tells investors where they fit in
the equity of your company. You'll also need to list your expected
start-up costs, along with financial projections for the first five
years. It's helpful if you can offer a realistic estimate of when you
will break even and start generating profits.
SOURCE: www.entrepreneur.com
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