Michael Sheridan, COO of Docstoc (http://www.docstoc.com/) discusses the key elements that are needed for a business plan. In this talk he outlines both funding requirements as well as team and executive summary.
- Funding requirements: qualified estimate to execute plan
- Team: key members, advisors, BOD
- Executive summary: 1-2 page compilation of the key sections from your plan
So everybody knows that talking – when you’re talking about a business plan, you’re focusing on the market size, the competition, your product description and the financial model but I think people overlook three other key pieces of a business plan. That being the team that you’re putting together to execute the business plan, your funding requirements and then lastly, constructing the executive summary around that.
So funding requirement is essentially after you’ve done your financial projections, how is the need for cash – outside cash, investment cash needed to make your financial projections work.
And you’re typically talking about series or rounds of financing and how much of the company you’re willing to give up for that type of investment from an outside party.
The second key piece of this section is really talking about the key – the team and it’s the key members that you have on your team. It’s the advisors that you’ve had from that are industry experts outside your business and it’s potentially the board of directors that you’ve discussed and you’ve convinced to be a part of your management team. All of those bring credibility to your business that is a startup or a new business is key for you when you’re talking to partners, new employees or outside investors.
And the last piece of any business plans you constructed is the executive summary where you’re taking the most important pieces of all the sections that you’ve written so far and constructing that into a page to 2 pages so that when somebody gets the business plan, it’s really going to be the first 2 pages that they read and potentially the only pieces that they’re going to read so you need to make sure that you’re clear, concise, and focused on the important things that you want them to know.
So when we talk about the key elements of a business plan, making sure that the team the funding requirements and the executive summary are all places where you spend time is critical to a successful business plan.