News

10 tips for every business plan

Jonathan Gold

12 Aug 2016

There is no such thing as a perfect business plan, but I see so many poor ones. My experience in the venture capital and angel investor world is that only around 1 in 10 plans secures investment. This is not a comprehensive list of everything you need to put in a plan and presentation, but if you cover these points you are at least on first base. Here are my top 10 pointers:

 

 

  1. Explain how the business works, don't just describe the product and the market
  2. That means describing the business model, how do you make money and from whom?
  3. Decide what you think the business is worth, investors will certainly disagree but know your worth and be clear how you got to that valuation
  4. Understand the finances (cash in cash out at least) and show you know how the numbers work, don't just rely on the accountant or an advisor. It's your business not theirs
  5. Add a one page executive summary to your plan and make sure it covers your business model, the cash you are looking for and a potential exit route (how I get my investment back out)
  6. Say what you intend to use the investment for
  7. Give details of the management team; who are they, their experience and their respective roles in the business. If it's just you the "Founder" plan out the team you will need to build
  8. Outline the key risks in your business and how you might mitigate or deal with them; things can and do go wrong. Plan for them and you stand a better chance of succeeding
  9. Project your sales, costs and resulting profit for 5 years; Year 1 and 2 should have more than guess work to underpin and justify the numbers. And it’s helpful to describe how you got started, few people remember to cover how they got to where they are today
  10. Show you have explored the main assumptions in the business model and also test whether you can survive if you undershoot your sales projection by a wide margin. Most people miss their Year 1 sales... don't run out of cash because you do too.

 


10 tips for every business plan

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