versus Business Plan
• Feasibility = screening opportunities to
decide the conditions under which you are
willing to go forward
• Business Plan = execution plan for
implementing the business
• A formal, written expression of the
entrepreneur’s vision for converting ideas
into a profitable, going business
• The entry card for serious consideration by
venture capitalists, banks, and other sources
Purpose of the Business Plan
• Reality Check—What’s it going to take?
• Living Guide to the Business
• Statement of intent for third parties
– Potential management
– Strategic partners
– How much room for error?
• Cash flow
– Can you pay them back?
• Qualifications and track record of management
– Do they have what it takes to execute
• Predictors of growth
• Qualifications and track
record of the
• Deal structure
• Growth plans indicate
• Ability to pay
• Future management
– Where do they fit in?
The entrepreneur: A Living
• A business plan changes often as a new
• Do just enough business planning to get the
new company started.
• Refine the plan with information gathered
from running the new venture.
What Every Plan Needs
• What need is being served?
• Do you have a team that can serve
• Why is now the right time to launch this
• Can you make money at it?
• The business concept
• The industry/market analysis
• The founding team + Management
• Development, production, location
The Components (cont.)
• Marketing plan
• Financial plan
• Contingency plan
• Growth plan
• Scheduling and milestones
• Deal structure
The Executive Summary
• Arguably the most important part of the
• Stimulates an investor, bankers, or other interested
party to read the business plan
• Should be no more than two pages
• Contains the most important points from all
sections of the plan
• Must capture the reader’s attention instantly
Background, Product, and Purpose
• What is the nature of the idea driving your
company and how did it arise?
• What does the product have to offer?
• What is the basic nature of the company?
• What is the company’s mission?
• What have you done to identify the market?
• How large is the market?
• How will products or services be promoted?
• What do you know about competing
products and companies?
• How will the product or service be priced?
Development, Production, and
• Where are the products or services in the
• What are the projected costs and timetable
for making the product or delivering the
• What steps have been taken to assure
quality and safety?
• Do team members have the experience,
expertise, skills, and personal characteristics
• Do team members having good working
Financial Plans and Projections
• Proforma balance sheet
• Proforma income
• Cash flow statement
• Break-even analysis
• Price cutting by competitors
• Unforeseen industry trends
• Sales projections not achieved
• Costs exceed estimates
• Schedules not met
• Difficulties raising financing
• Unforeseen trends
Harvest and Exit
• Exit strategies
Scheduling and Milestones
• Formal incorporation • Product displays
• Completion of design • Agreements
• Completion of • Moving into
• Hiring of initial • Receipt of orders
personnel • First sales
• The extra “something”
• Pay attention to organization, clarity, word
choice, and style
• Have good writers read your plan
• Revise according to their suggestions
• You must support your claims
Seven Deadly Sins
• Plan is poorly prepared
• Plan looks too slick
• Executive summary is too long
• Development stage of product is unclear
• Fails to answer “Why would anyone ever want to
• Doesn’t state management qualifications
• Financial projections are wishful thinking
• Answer the fundamental questions
• Be under a half hour
• Catch the audience’s attention in the first sixty
• Involve the key members of the
• Demonstrate the product or service
• List what students took away from the
discussion in real time