Business Plan template:
In a fast changing world where diving into details sometimes is perceived as a
waste of time, writing a business plan might be considered a useless effort.
We claim the contrary and urge you to devote time and thought and prepare
a business plan that will serve your endeavor in its early stages and further
along the way. Before getting into details we’d like to share with you some
insights we found useful from Guy Kawasaki website regarding the question
who’s going to read your business plan:
“First, you - the owner, manager, author of the plan--and you’d better be the owner of the
plan too—not some consultant. The plan is by you and for you and if tracking it, reviewing
it, managing and executing it aren’t important to you, then you don’t understand planning.
Planning isn’t about the document; it’s about controlling your destiny, running your
business better, setting goals and tracking progress, and keeping your eyes on the horizon
while not tripping over potholes in front of you. If you’re not going to read it regularly, then
don’t ask anybody else to.
Second, team members, boards of directors, and collaborators - a business plan is a way to
coordinate, communicate, and collaborate with accountability and tracking. It should get all
the key people on the same page. Nobody can execute a plan they don’t know about.
Third, relevant outsiders - banks, investors, boards of advisors, key consultants, and even
occasionally—but only with caution—vendors or prospective new high-level employees.
If we need to tip what are the most important things in BP we would note the following:
1. A plan should set priorities with the understanding that you can’t do everything.
After all the buzzwords and analysis, strategy is focus. What can you do better
than anyone else? What’s your core competence?
2. Specifics. What’s going to happen, when, how much it’s going to cost, and who’s
responsible for it.
3. Cash flow. Growth spurts in a company are good things, meaning more sales, and
presumably more profits, but unplanned growth can suddenly sucks up liquidity
and in the worst cases kill the company. Growth without prior planning can be as
fun a hard kick in the stomach”.
The following is a an outline of a proposed Business Plan which can be
summarized to an Executive Summary by taking the bottom line from each
section.
Part I – Short abstract that describes the main technology and economic
values of the product/service.
Notes:
1. This section must show in the ES.
2. More information can be inserted to this section (such as a few
words about the founding team and the size of the market)
Part II - Description of the product/service
Notes:
1. Provide detailed explanation of your product/service.
2. Explain how things are being done today.
3. Show your unique value proposition
4. Sometimes the technology explanation can be part of this section
Part III – Present in a clear manner (try to use as minimum as possible jargon
words1) your Technology and Innovation.
Notes:
1. Try to address the question why it has not been done by now or
in other words, what are the barriers/obstacles that you
succeeded to overcome.
2. There is a thin line between exposing yourself too much and
providing enough information. It depends on many things, such
as patent submitted, the complexity of the idea etc.
3. Innovation – this is the most important thing in this section –
don’t forget it.
4. Don’t forget to add a well-thought working plan that states the
milestones and provides a clear visioning on what you intend to
do.
5. Sometimes the IP section is added here. It depends how
complex/detailed the issue is.
Part IIIa – IP. An updated brief about your patent (Search, expert opinion,
status, what it should encompass, etc).
FDA – In medical device projects, a section that describes the assumed path.
Part IV - Market and Competition – here you should analyze your market
and your market trends. Since we’re in the early stage business and looking
for real innovations, market analysis might be tricky. The notes below might
help you to focus:
1. We usually like facts. Numbers and figures should come from a
reliable source (State your sources).
2. Try to reach your market size in two ways – “bottom up” and “top
bottom”. They should largely align. If not, some of your
assumptions are wrong.
3. If you use assumptions, don’t forget to state them.
4. Make all efforts to identify and characterize your market, your
available market and your addressable market. General
descriptions of the market tend to diminish from your
professionalism and credibility.
1
If are used, remember to explain or to provide the full version of your abbreviations)
5. Competition always exists even if your innovation is unique. You
should depict the ecosystem your product/service and evaluate the
risks and identify direct and indirect competitors. As thorough it’ll
be as high your credibility.
Part IVa - Go 2 Market Strategies. Explain what are your steps towards your
market and how are you planning to penetrate it.
Notes:
1. There can be few ways that can be modified later on. Here you
need to show that there are ways that are feasible to penetrate the
market with the resources that will be available to bring into the
company.
2. Sometimes this section is part of the business model.
Part V – Team members – Both founding team and other experts, specialists
that are connected to the project.
Notes:
1. Almost always you’ll hear that inventors put their money on the
founders. It is true.
2. Your experience and skills (as well as those of your team) are one of
the first things an investor will check. Sometimes it’ll be the
difference between getting a meeting and not.
3. Don’t put false information, even not inaccurate information, it’ll
ruin your credibility, and in this case there is no second chance.
4. Your advisory panel might open doors for you. If you exist, put
them in, if you only talked with them once on the phone and they
are not committed, omit them.
Part VI - Financials. Budget and Business models. These are two separate
models that connect in many ways. In general your budget should support
your business model and vice versa (as you go along). Both are plans that
change constantly, however the budget framework should be more constant.
Notes:
1. You may have more than one budget for different types investor
(VCs/Incubators/Angels).
2. The budget must reflect the development and commercialization
plans.
3. Timelines must be plotted with much thought. For example: you
intend to recruit staff in a month or two, take into consideration
that it can take longer, in addition consider setup time and costs .
4. Try to cover as much issues as you can in the budget. It’ll give you
clearer sight on your project feasibility. (Salaries – including the
cost for the employer, legal, insurance, travel, etc.).
5. You can find a budget template in our website.
6. Provide your business model both in wording and in excel sheets.
Provide all necessary assumptions and clear insight of the
model/models.
7. Should you rely on well know business models refer to them in
short and explain why you used them.
For summary here are some more tips while writing your Business Plan2:
What’s the optimal process for writing a business plan?
Grab whatever part gets your attention first and get going. Understand that it’s not
sequential it’s iterative, and a good plan is never done. Some people do the numbers, then
the concepts, most people do concepts first, but it doesn’t matter. Planning isn’t a waiting
room where you sit until you’re done. Build it in parts, mix and match, choose items from a
menu. If you like, do a sales forecast and see where that leads you.
You may start with what you want for the business on the long term, move to establishing a
conceptual identify: what are you best at, how do you want the world to distinguish your
business from all others. Then it goes to the marketing: what message, to whom, through
what media. Then it go to sales forecast, costs, expenses, and last but frequently most
important, cash flow. Key concept: a good business plan is never done.
What are some of the common mistakes?
The worst by far is focusing on the plan instead of planning. This generates the idea that
you create a plan as a document, and the related misunderstanding that the plan is for
somebody else. You don’t postpone life while you’re developing a plan; you’re always
developing the plan. In the meantime, “Get going.” Here are some other common mistakes:
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Blue-sky blurry: lots of strategic thinking without any hard facts. Planning
requires specifics: dates, deadlines, responsibility assignments.
Trying to do everything. I use the rule of displacement: everything you do rules
out something else.
Thinking that being the lowest price option is important. It isn’t. The price and
volume thing they talk about in economics classes is for 200-year-old lumps of
coal, not your business. Use price as a statement of quality. Leave the low-price
strategies for Walmart and Costco.
Mistaking profits for cash. Profitable companies go broke all the time. You
don’t spend profits. Plan your working capital well.
Taken from Guy Kawasaki website.