Rules for effective Business Plan

Sarayu Srinivasan
Sarayu Srinivasan
Intel Capital

Third, language makes a difference. Spelling, grammar, and formatting all make an impression; many investors view lack of attention to details a cardinal sin that is also indicative of a lack of respect for the reader. It raises a red flag about the entrepreneur and his or her conscientiousness now and in the future. Spell checks are built into applications for a reason – get into the habit of using them. Jargon, technical terms, and industry specific vocabulary should be regulated. If industry jargon is unavoidable, defining terms as they come up is a good practice. Explain acronyms and abbreviations the first time they appear. Do not create additional hurdles or unnecessary complexity for the reader (and ultimately for yourself).

So, from a funder's perspective what are some of the key components that should appear in the plan? Below are items to consider including; they are by no means an exhaustive list but a base template suggestion that should help provide a general but holistic understanding of a business.

1. Conclusion: A summary page or slide stating the opportunity and the solution. A conclusion slide at the start of a plan sets expectations up front and allows the audience to focus on the details of how; there is no wondering about where the presentation is going. This is the 'take away' slide that captures the business on a page.

2. Product or solution: A detailed product and value proposition. Should reference differentiation, barriers to entry, and where the solution sits in its universe and may include a technology overview.

3. Market opportunity: Size, growth, macro trends, problem solved, and market share targeted.

4. Customers: Target and actual, pipeline with commitments, and segmentation.

5. Go-to-market strategy & sales: How do you reach your market? "Why to buy" message vs. competition, sales cycle, distribution, and acquisition.

6. Management or executive team: Relevant education, experience, and expertise. What is missing and what is the plan and timeline for filling the gaps?

7. Business model: Monetization strategy, scalability, sales, and costs.

8. Financials: Projections (usually for three to five years), include historical financials, if any. Use metrics like user numbers to mark growth potential.

9. Capital required, deployment plan, investors: Include milestones and current and overall growth expectations.

10 Competition: Key competition matrix. It is helpful to include competitors’ differentiators and market penetration, strengths and weaknesses, and funders and money raised.

11. Contacts: Include the name, designation, phone numbers, and email id.

The author of the article is Sarayu Srinivasan, Director, Intel Capital.
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Reader's comments(1)
1: I pretty much liked some of the ideas shared across this article. Some of the points to ponder:
1. A picture if worth a thousand words: I know till now we haven't had any roles of pictures in a business plan. Pictures are not just colorful images, get creative and unleash its power.
2. Using Power Point: If you have a huge doco for your business plan, it's worth creating a high level power point and adding references in it for the detailed doco.
Posted by:Rohan Ahluwalia - 27 Aug, 2009

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