The Business Plan

A business plan is a statement of the opportunity, the company's value proposition in the industry and customer markets, its products and services, competitive advantages, functional strategies/actions plans and management team.  Preparing a business plan is a useful way for entrepreneurs to think through and define the business concept, strategy, team and resources requirements for an innovative venture.

It is also an information memorandum for the company to communicate to potential investors as well as to other stakeholders: shareholders, directors, employees, business and strategic partners. 

There are various guides available for developing the business plan. A guide for a short-form business plan may include the following section headings:

1.    Description of Company's business:

- Product or service and technology

- Product or service functions

- Customers' uses and benefits

- Company's business goal


2.    Description of Industry background:

- Industry forces, growth drivers/trends on market size and growth rates

- Impact of driving forces and trends on market issues and demand characteristics

- Business opportunity for technologies, products or services able to address market issues and fulfill demand characteristics 


3.   Description of Company's product or service

- Description of technologies, product or service and what it accomplishes

- Details of product or service dimensions that address market issues and fulfill demand characteristics

- How product or service functions enable customers to capitalize or maximize economic opportunities and business objectives 

- Types of offerings for different target markets/customers segments


4.    Description of competitive strengths and capabilities

- Distinctive features, technological advantages and proprietary/legal protection

- Other functional strengths and capabilities: e.g. product breadth, sales and marketing channels, manufacturing arrangements, etc.,

 

5.    Description of the business strategy
- Company's business goal and strategy
- Functional objectives (R&D, Customers, Channel Partners, Sales & Marketing, Service & Technical Support, Manufacturing) to achieve business strategy
 
6.    Description of competition
- Nature of competitive structure
- Basis of competition (e.g., product performance, ease of use/installation, customer support, pricing, etc.,) and relative comparisons
 
7.    Management information
- Executive offices
- Directors
- Advisory board members
 
8.    Financial information
- Profit and loss statements and forecasts
- Cash flow forecasts
- Key financial and business highlights
- Any regulatory or legal issues
 
9.    Description of share offering
- Amount of funding sought
- Uses of funding proceeds
- Shareholders and share capitalisation
- Valuation multiples and comparables in the capital markets
 
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Frankie Tan,
11 Sep 2008, 03:35
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