- Thread starter
- #2
What to include in a business plan? (Should you ever have the need to write one)
This was sent to me by one of the top VC's in Silicon Valley after a question about business plans came up and have used this as a basic framework when the need to write one comes up. Hope this is of some use to some of you
---------------------------
Thanks for the question. All I am getting from entrepreneurs recently are summaries and decks. The best business plans are written specifically for your own business, so no two are the same.
When writing your own business plan, some of the things to cover are:
Mission: We expect to be the premier company In this industry because
Vision: There is an opportunity to create a large business in this industry because, or there is a hole in the current thinking because
Ah ha moment: The founder discovered this opportunity when he was…
What you do:
How are you going to delight your customer. Who is your customer and how can you make it easy enough for that customer to adopt your product. Where is the friction to adoption. How many clicks does a customer have to make before customer satisfaction.
How you are going to make money:
Current state of the industry, market dynamics, market size, how you will redefine the market:
How you will gain a foothold, first year expectations:
What is your marketing strategy, ground game, air game, costs, virality, do customers become your sales people
Market segmenting: Who are your initial customers, what are their dynamics, demographics and psychographics
What is your pricing: High or low (only two choices) High margin and high service, or cost saving and standardization for customers
The big plan. What happens to your company over time. Does the product commoditize where you will have to continue to build new product, or is the product mission critical for the customer where you will add features to increase cost per customer
Manufacturing: Broadly defined, all great companies manufacture. They systematize what they do and make it a science. How will you systematize what you do.
Distribution: How do you get the product into customer’s hands. How do you find new customers. How do you more easily get existing customers to keep buying
Finance: How much money do you require for the next 18 months. What will you do with it. How many people do you need for the next 18 months. What are they going to do for you. What will your sales, costs and profits look like for the next 5 years. How will you collect money. Will you collect in advance like Tesla and Amazon, or will you collect after you deliver the product like Exxon or IBM. How will you pay your employees. How much stock will you give your 10th employee. Your hundredth.
How will you divide your stock. Who will be shareholders now. Who will be shareholders in the future, both employees and investors. How will the early investors make money. Show how your stock will go up in value on each round. Who will own what after four rounds of funding.
What is your offer for your stock now. Is it in the form of a convertible note or for stock.
What team members do you have. What are their backgrounds. How many of them are there. How many next year. What team members do you need to become successful. How are you going to find them.
This was sent to me by one of the top VC's in Silicon Valley after a question about business plans came up and have used this as a basic framework when the need to write one comes up. Hope this is of some use to some of you
---------------------------
Thanks for the question. All I am getting from entrepreneurs recently are summaries and decks. The best business plans are written specifically for your own business, so no two are the same.
When writing your own business plan, some of the things to cover are:
Mission: We expect to be the premier company In this industry because
Vision: There is an opportunity to create a large business in this industry because, or there is a hole in the current thinking because
Ah ha moment: The founder discovered this opportunity when he was…
What you do:
How are you going to delight your customer. Who is your customer and how can you make it easy enough for that customer to adopt your product. Where is the friction to adoption. How many clicks does a customer have to make before customer satisfaction.
How you are going to make money:
Current state of the industry, market dynamics, market size, how you will redefine the market:
How you will gain a foothold, first year expectations:
What is your marketing strategy, ground game, air game, costs, virality, do customers become your sales people
Market segmenting: Who are your initial customers, what are their dynamics, demographics and psychographics
What is your pricing: High or low (only two choices) High margin and high service, or cost saving and standardization for customers
The big plan. What happens to your company over time. Does the product commoditize where you will have to continue to build new product, or is the product mission critical for the customer where you will add features to increase cost per customer
Manufacturing: Broadly defined, all great companies manufacture. They systematize what they do and make it a science. How will you systematize what you do.
Distribution: How do you get the product into customer’s hands. How do you find new customers. How do you more easily get existing customers to keep buying
Finance: How much money do you require for the next 18 months. What will you do with it. How many people do you need for the next 18 months. What are they going to do for you. What will your sales, costs and profits look like for the next 5 years. How will you collect money. Will you collect in advance like Tesla and Amazon, or will you collect after you deliver the product like Exxon or IBM. How will you pay your employees. How much stock will you give your 10th employee. Your hundredth.
How will you divide your stock. Who will be shareholders now. Who will be shareholders in the future, both employees and investors. How will the early investors make money. Show how your stock will go up in value on each round. Who will own what after four rounds of funding.
What is your offer for your stock now. Is it in the form of a convertible note or for stock.
What team members do you have. What are their backgrounds. How many of them are there. How many next year. What team members do you need to become successful. How are you going to find them.