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Angel Tip of the Week

The Indispensable Business Plan

A Business Plan is the essential roadmap for the creation of a new venture or for the growth of an existing venture. It is the definitive blueprint, guiding the CEO and management team through each step of the entrepreneurial and funding process. A Business Plan is comprised of three sections: The Executive Summary (4 pages), the body of the Business Plan (20 +/- pages), the Appendix (10 - 20 pages).

The Business Plan answers in quantitative terms the following questions: 1.) What is the business concept and venture architecture? 2.) Why is this an opportunity for you and for investors? 3.) What are the market dynamics - size, growth, customer characteristics, industry forces, competitor intensity? 4.) What is your market penetration strategy? 5.) What is the timetable for your product development effort? 6.) Who are the members of your management team? 7.) What is your manufacturing plan? 8.) What are the economics of the business - business model, assumptions, operating cash flow break-even, 5 year financial projections? 9.) What is the overall schedule to accomplish your key milestones? 10.) What is your funding strategy, including funds needed, valuation, proposed offering, use of funds? 11.) What are the Critical Risks facing this opportunity?

When creating your Business Plan, think like the investor, not like the entrepreneur. Investors are seeking significant returns with minimum risk. Your key to success in getting funded is to present a compelling, straight-forward Business Plan that has home-run potential for investors. Only family members, friends or clueless investors will consider funding your venture without a Business Plan.