Showing posts with label Venture Plan. Show all posts
Showing posts with label Venture Plan. Show all posts

Questions That Must be Answered in a Business Model

  1. Who are the target customers for this business venture?
  2. How will this venture create and deliver value for these customers?
  3. What, who, where is the primary competition for this venture?
  4. How is the enterprise different and better than the competition?
  5. What are the primary core competencies of this venture?
  6. What is the scope of products, processes, and activities of this venture?
  7. How is this venture organization structured?
  8. How will this venture capture value for profit?
  9. How will this venture grow, and over what time period?
  10. How will this venture attract and retain talent?

Tips for Writing

  1. Be ruthless when proofreading ... look for what you can cut.
  2. Remember stories have a beginning, a middle, and an end.
  3. Use "talking headings" to convey meaning.
  4. When in doubt, check for rules of grammar and usage with a handbook.
  5. Place the subject and main verb near each other and use strong verb.
  6. Avoid the "to be" verb when a stronger verb carriers a more specific meaning.
  7. Use the passive voice sparingly (It was decided to change the Company name for the sake of enhancing the effect.) vs. (We changed the company name to make it more powerful.)
  8. Make sure the "ing" form is necessary: (We were working on a prototype) vs. (We developed ... ) Note: often a question of verb tense.
  9. Make sure words ending in "'ion" are necessary; are they verbs masquerading as nouns? (The decision to acknowledge receipt of the letter was made.) vs. (We acknowledge receipt of the letter.)
  10. Make certain the prepositional phrase is helpful ... cut wasted prepositional phrases
  11. To tighten: circle the "to be" verbs, the "ing" words, the "ion' words, and prepositions. Then read out loud, and check to see what else you can cut.
  12. Put old information first, new information second (OLD >> NEW)
  13. Put easy-to-understand information first, complicated material second
  14. When building transitions, use repetition of key terms, synonyms for key terms, appropriate pronoun reference, and the appropriate collocation chain
  15. Make sure your pronoun usage is clear to the reader
  16. Choose the best word, but avoid using thoughtless thesaurus words
  17. When quoting, introduce the author, the text, and the concept; then provide the quotation with proper citation format; then provide the reader with your interpretation.
  18. Keep your writing simple ... cut to the chase.
  19. Avoid cliches and trite phrases.
  20. Use strong verbs.
  21. Use consistent verb tenses, and find the single most correct word.
  22. Always look for what you can throwaway and always make it easier on your audience.
[Thank you, Randy Accetta]

How to Write an Executive Summary

The purpose of the executive summary of the business plan is to provide your readers with an overview of the business plan. Think of it as an introduction to your business. Therefore, your business plan's executive summary will include summaries of ...
  1. a description of your company, including your product and/or service solutions
  2. your management
  3. the market and your customers including basic quantitative information
  4. marketing and sales strategies
  5. your primary competition
  6. your competitive advantage
  7. your operational strategies
  8. financial projections and plans
  9. contact information
The executive summary will end with a summary statement, a "last kick at the can" sentence or two designed to persuade the readers of your business plan that your business is a winner.

To write the executive summary of the business plan, start by following the list above and writing one to three sentences about each topic. (No more!)

If you have trouble crafting these summary sentences from scratch, review your business plan to get you going. In fact, one approach to writing the executive summary of the business plan is to take a summary sentence or two from each of the business plan sections you've already written. (If you compare the list above to the sections outlined in the Business Plan Outline, you'll see that this could work very well.)

Then finish your business plan's executive summary with a clinching closing sentence or two that answers the reader's question "Why is this a winning business?"

Tips for Writing the Business Plan's Executive Summary
  1. Focus on providing a summary. The business plan itself will provide the details and whether bank managers or investors, the readers of your business plan don't want to have their time wasted.
  2. Keep your language strong and positive. Don't weaken the executive summary of your business plan with weak language. Instead of writing, "Dogstar Industries might be in an excellent position to win government contracts", write "Dogstar Industries will be in an excellent position..."
  3. The executive summary should be no more than two pages long ... one page is probably better. Resist the tempation to pad your business plan's executive summary with details (or pleas). The job of the executive summary is to present the facts and entice your reader to read the rest of the business plan, not tell him everything.
  4. Polish your executive summary. Read it aloud. Does it flow or does it sound choppy? Is it clear and succinct? Once it sounds good to you, have someone else who knows nothing about your business read it and make suggestions for improvement.
  5. Tailor the executive summary of your business plan to your audience. If the purpose of your business plan is to entice investors, for instance, your executive summary should focus on the opportunity your business provides investors and why the opportunity is special.
  6. Put yourself in your readers' place... and read your executive summary again. Does this executive summary generate interest or excitement in the reader? If not, why?
Remember, the executive summary of the business plan will be the first thing the readers of the business plan read. If your executive summary is poorly written, it will also be the last, as they will set the rest of your business plan aside unread!

[Thank you, Susan Ward]

The C's of Communications

  1. Clear: Make the goal of your message clear to your recipient. Ask yourself what the purpose of your communication is.
  2. Concise: Your message should also be brief and to the point. Why communicate your message in six sentences when you can do it in three?
  3. Concrete: Ensure your message has important details and facts, but that nothing deters the focus of your message.
  4. Correct: Make sure what you're writing or saying is accurate. Bad information doesn't help anybody. Also make sure that your message is typo free.
  5. Coherent: Does your message make sense? Check to see that all of your points are relevant and that everything is consistent with the tone and flow or your text.
  6. Complete: Your message is complete when all relevant information is included in an understandable manner and there is a clear "call to action". Does your audience know what you want them to do?
  7. Courteous: Ensure that your communication is friendly, open, and honest, regardless of what the message is about. Be empathetic and avoid passive-aggressive tones.
  8. Clutching: Make sure your message has AIDA: grabss Attention, develosp Interest, builds Desire, triggers Action. Be sure there is a clear "path to action" for the reader to take ... call, email, website, et alia.

Tips for Developing a Venture Strategy

  1. Develop the vision statement, the mission statement, and the business model
  2. Describe the industry and context for the firm and its competitors
  3. Determine the firm’s strengths and weaknesses in the context of the industry and environment
  4. Describe the firm’s core competencies, its customers, and its competitive advantage
  5. Describe the opportunities and threats for the venture
  6. Identify the critical success factors
  7. Formulate strategic options and select the appropriate strategy
  8. Translate the strategy into action plans with suitable measures and controls
[Thank you, Tom Beyers]

Easier Way to Create a Venture Plan

A good approach to creating a business plan to present to prospective investors and collaborators is to start with a PowerPoint or Google Slides presentation.  

Creating individual slides for each topic tends to force clarity in thinking. 

One interesting "trick" ... use the "speaker notes" in a PowerPoint business plan slide deck to transform the slides into a more formal written business plan.

It is very common for prospective investors to ask for a copy of the slides before, during, and after a presentation. The down-side is that not all of the pertinent information is on the slides. The speaker for each slide is providing that information. However, there is a easy and fairly elegant solution. Instead of just printing the slide deck, print the slide deck with the accompanying speaker notes. But not just any ordinary speaker notes ...

Use the "Speaker Notes" feature of PowerPoint to write sentences and paragraphs as needed to help the reader understand what is on the slide (since the actual speaker is not there to tell them in person). Just like writing a "formal" document except with the added benefit here of coordinating with the venture plan slide deck and graphics.

There are typically 10 to 20 slides in a business venture plan slide deck (a suggested base outline is below).

From the PowerPoint slide deck with the sentences and paragraphs, the slides with "speaker notes" can be printed one or two slides per page. The results is a "written" business plan that coordinates perfectly with the slide presentation, and has more details than simply printing the slides alone.

Base (but likely not all elements) of an outline for a business plan/presentation ...
1] Title ... name of your venture, logo, tag line, contact information ... a billboard executive summary of the venture
2] Problem/Opportunity ... pain your alleviating or the pleasure you're providing
3] Value Proposition ... benefits versus price
4] Underlying "Magic" ... your solution, marketing brochure, the "secret sauce" behind your venture ... photos, pictures, diagrams,
actual prototype?
5] Business Model ... how you make money ... business model canvas is a good graphic
6] Go-to-Market Plan ... customer NWD profile and how you will fill the holes ... buyer, decision maker, influencer, user, et al
7] Competitive Analysis ... key competitors and perhaps a SWOT(T)
8] Management Team ... you, key advisors
9] Financial Objectives ... first week, month, quarter, year ... how you will meet these objectives ... key metrics
10] Timeline and Status ... Past 6 months, status now, next 6 months ...

While these 10 slides are fundamental, 10 slides alone are often not enough for some base business venture plan presentations. Add as needed but resist the urge to have more than about 18 slides for a 10 to 15 minute presentation.

Venture Hypothesis Outline

  1. Title slide or page ... venture concept name, team members, 3-word concept summary
  2. Opportunity ... the problem, market research and analysis, first customer(s) beachhead
  3. Solution and venture concept ... products and services, competitive advantage
  4. Business model ... how the venture will earn money (or self-sustain)
  5. Marketing and sales strategies ... how the venture will attract and retain customers, tactical marketing
  6. Product development and operations strategies ... how the venture will develop and deliver solutions to customers
  7. Team and organization ... the current team and what do they do, advisors, team members to be added
  8. Risks and variations ... downside and upside risks, timeline, and tolerances
  9. Financial model ... estimate of units sold, average selling price, revenue, expenses, and EBITDA for first 5 years; key assumptions; significant startup expenses
  10. Validation plan ... how the hypothesis will be validated

Tips for Writing a Venture Plan

  1. Tell your story, tell it quickly, and tell the truth.
  2. Make sure that on every page the reader gets the information you want them to get.
  3. Creativity helps, but scale it back and be traditional with your headings and your formatting.
  4. Use talking headings to send the reader in the desired direction.
  5. Brand your pages; use appropriate colors; use images and charts and graphs to help reader understand key points; write short paragraphs; use headings that help the reader follow the story you are telling; caption your charts/graphs; use graphics to highlight your sentences and use sentences to explain the graphics. 
  6. Avoid fluff.
  7. Cite your sources. 
  8. Every paragraph should represent a discrete chunk of information. Every paragraph needs a thesis sentence. This is normally the first sentence. The middle of the paragraph should add important information to elaborate on the main point. The last sentence of each paragraph should tie up the specific chunk of information and direct the reader to the next chunk of information in the next paragraph. The reader should know all of your main points by 'reading the first and last sentence of every paragraph.
  9. When using bullets or other formatting maneuvers, decide what you want to emphasize, then use the appropriate marking words or graphics. To emphasize importance, for example, use words or phrases that indicate value; if you emphasize time, then use words that indicate chronology. Make sure that the mixture of bullets and numbers you choose conveys the right tone.
  10. To proofread, print a copy and go through it out loud. Look for any place the reader stumbles out loud. Read it backwards if necessary. Have a friend outside of your team read it out loud and see where they get confused. Read slowly to catch basic errors. Allow adequate time to do all this ... it is time-consuming, so give yourself the time to become perfect.
  11. When in doubt, check for rules of grammar and usage with a handbook. [Jim's 2 cents: Save Swing Jazz, Pelicans, and the Oxford Comma! ... Strunk and White, the Chicago Manual of Style, and the US Government agree!]
[Thank you, Randy Accetta]


An 18-slide Venture Plan Presentation

Slide 1: "Billboard"
Slide 2: Core Team ... who, what
Slide 3: Problem / Customer / Opportunity ... scale and scope of problem, SOM/SAM/TAM
Slide 4: Solution ... brochure
Slide 5: Value Proposition ... Customer NWD Profile, Benefits, FFFF
Slide 6: "Underlying Magic"... differentiation, competitive advantages, core competencies
Slide 7: Industry and Environment ... Who, What, SWOT
Slide 8: Competitive Analysis ... Who, What, SWOT
Slide 9: Business Model ... BM canvas
Slide 10: Go-to-Market Plan ... Strategies
Slide 11: Sales Plan ... Objectives
Slide 12: Operations ... Production, distribution, delivery, margin objectives
Slide 13: Growth Strategies ... Scale and Scope
Slide 14: Timeline ... What, when, where
Slide 15: Financial Objectives and Key Metrics ...
Slide 16: Use of Funds ...
Slide 17: Funding Proposal ... Equity, debt, grants, gifts
Slide 18: "Billboard"

Slides 19 to 100+ will have all the gory details!! Lists of 100: customers, prospective customers, target markets, competitors, prospective collaborators, suppliers, prospective investors, ...

These 18 slides also form the foundation for a formal written business plan and an executive summary.

How to Start a New Venture

Go on a DXpedition ...

The Desire Phase ...
Determine why you (and your teammates) want to start a new venture

The Discover Phase ...
Form initial core entrepreneurial team
Identify problems or opportunities

The Define Phase ...
Screen problems or opportunities
Define the value proposition

The Design Phase ...
Generate potential solutions
Create a business venture hypothesis
Design a business venture plan

The Deploy Phase ...
Acquire needed resources
Launch the venture

The Develop Phase ...
Test, validate, and refine the venture hypothesis
Develop and iterate the venture based on real customer experiences

Highlights of an Effective Venture Plan

  1. Start with a clear, concise executive summary of your venture. Think of it like an elevator pitch. In no more than two pages, billboard all the important stuff. At the top, communicate your value proposition: what your venture does, how it will make money, and why customers will want to pay for your product or service. If you are sending your plan to investors, include the amount of money you need and how you plan to use it. You have to know the whole picture before you can boil things down, so tackle the summary after finishing the rest of your plan.
  2. Next, establish the market opportunity. Answer questions like: How large is your target market? How fast is it growing? Where are the opportunities and threats, and how will you deal with them? Again, highlight your value proposition. Most of this market information can be found through industry associations, chambers of commerce, census data or even from other business owners. (Be sure to source all of your information in case you are asked to back up your claims or need to update your business plan.)
  3. While you may have convinced yourself that your product or service is unique, don't fall into that trap. Instead, get real and size up the competition: Who are they? What do they sell? How much market share do they have? Why will customers choose your product or service instead of theirs? What are the barriers to entry? Remember to include indirect competitors--those with similar capabilities that currently cater to a different market but could choose to challenge you down the road.
  4. Now that you've established your idea, start addressing the execution ... specifically, your team. Include profiles of each of your business's founders, partners or officers and what kinds of skills, qualifications and accomplishments they bring to the table. (Include resumes in an appendix.)
  5. If potential investors have read this far, it's time to give them the nuts and bolts of your business model. This includes a detailed description of all revenue streams (product sales, advertising, services, licensing) and the company's cost structure (salaries, rent, inventory, maintenance). Be sure to list all assumptions and provide a justification for them. Also, include names of key suppliers or distribution partners.
  6. After all of that, one big question still remains: Exactly how much money will your venture earn? More important, when will the cash come in the door? That's why you need a section containing past financial performance (if your company is a going concern) and financial projections.
  7. Three-year forward-looking profit-and-loss, balance sheet and cash-flow statements are a must ... as is a break-even analysis that shows how much revenue you need to cover your initial investment.
  8. For early stage companies with only so much in the bank, the cash-flow statement comparing quarterly receivables to payables is most critical. "Everyone misunderstands cash flow," says Tim Berry, president of business-plan software company Palo Alto Software. "People think that if they plan for [accounting] profits, they'll have cash flow. But many companies that go under are profitable when they die, because profits aren't cash."
  9. After you've buffed your plan to a shine, don't file it away to gather dust. "A business plan is the beginning of a process," says Berry. "Planning is like steering, and steering means constantly correcting errors. The plan itself holds just a piece of the value; it's the going back and seeing where you were wrong and why that matters."
[Thank you, Mary Crane]


Elements of a Vision Statement

A Vision Statement is essentially a high-level summary of what the venture team wants to accomplish, typically within the next five years.

Everyone in the organization should be able to connect their activities to making this vision a reality.

A vision statement should be ...
... clear, focused, easily understood, and easy to remember.
... consistent, constant over a period of time, but adjustable as conditions warrant.
... unique and special to the venture.
... purposeful, providing a reason for being and for others to care.

Vision Statement seed: "We will [change the way] [our customers ... who?] [do something ... what?] because [we have something new and better ... what?]."

Sometimes the terms "Vision" and "Mission" are reversed ... personally, I am set on a Vision Statement being a long-term goal, and the Mission Statement being day-to-day guideline for achieving the Vision.

Neither the Vision or the Mission statements should be fluff. They should be well-thought-out and act as solid anchors for the venture. No BS!  No "wink and smile" when we read them, especially when we read them aloud!


Business Plan Guidelines

Here's an outline for a venture plan. It does a good job of identifying the key information that the venture team needs address.

A typical first-round investor-grade business plan is usually about 20 - 25 pages, plus separate appendices.

There are many possible outlines for a business plan ... remember, a key purpose of a business plan is to mitigate risk ... we are selling our venture concept here and need to show the reader that we know our stuff!

A. Cover Page ... Company name, company location, contact information, legal statements (proprietary information, copyright, etc.) ...

B. Executive Summary ... independent one page document ... the exact same executive summary that you used to entice the prospective investor or corporate executive to want to read this plan

C. Table of Contents ... one page.

D. Opportunity ... tell a story here!  Engage the reader!  Two to four pages. 
  1. Problem / Opportunity: The problem your venture will solve, the significance of the problem, the opportunity this offers your venture, quality of the opportunity, growth potential ...
  2. Product and/or Service Solution Description: Essential product/service idea, category of product/service, proprietary protection, entry strategies ...
  3. Customers and Target Markets: Target market characteristics, size, why this market is the best for your venture, market validation research ...
E. Environment and Competition ... three to five pages.
  1. Environment and Context: Industry overview, research results and analysis, major competitors, benchmark ventures, timeliness, regulations ...
  2. Innovation: what your venture does that is new and better
  3. Competitive Advantages: Market focus, value proposition, core competencies, barriers to entry, competitive validation, how your venture will position itself to meet the competition, ...
F. Goals and Strategies ... critical and key information as appropriate to your venture ... three to five pages.
  1. Goals, vision, mission.
  2. Value Proposition.
  3. Business Model: How your venture will earn a profit, expected margins, sources of recurring revenue ...
  4. Organization: Management team, relevant domain knowledge of the team, commitment, advisers, directors, management to be added, culture, talent ...
  5. Product Development Strategies
  6. Marketing and Sales Strategies: Pricing strategies, distribution model, partnering, promotional strategies ...
  7. Technology Strategies: Technology, product development ...
  8. Operational Strategies: Production methodologies, manpower requirements, equipment requirements, material management, flow diagram of key processes ...
  9. Intellectual Property and Legal Issues Strategies: Patents, trademarks, trade names, copyrights, trade secrets, operating and other agreements, legal structure ...
  10. Development Plan: Current company status, number of employees, development stage, early revenue, number of customers, relevant historical information, long-term venture goals, growth strategies, timeline ...
  11. Risks and Contingencies: Downside risks and contingency plans, upside risks and expansion plans ...
G. Financial Projections ... Key assumptions, historical financial statements (if available), pro forma statements ... four or five pages.

H. Funding Proposal ... independent one or two page document.
  1. Resource Requirements: Short summary of financial projections; total investment funding and resources being sought, use of funds in 4 or 5 general categories, any unusual use of funds, return on investment to investors and entrepreneurs, harvest strategy ...
  2. Call to Action: What do you want the reader to do ... join your team, invest, meet with you to learn more ... ?
I. Summary ... A brief summary (sales pitch) of the opportunity, environment and competition, goals and strategies, financial projections ... The final who, what, where, when, why, and how ... one page.

J. List of Available Appendices ... Variety of support information ... resumes, product data sheet, marketing brochure, research data, etc.

Elements of a Mission Statement

A mission statement is a description of how the team will achieve the vision for the venture. A mission statement should include a summary of ...
... Core values
... Target customers
... Stakeholders
... Products
... Competitive advantage
... Values provided to customer
... Markets served
... Industry

Mission statement seed: "We will earn a profit solving customer problems better than the competition."

Elements of a Marketing and Sales Plan

  1. Market research and analysis ... customers, problem, solutions, competition, risk and reward, resources, feasibility ...
  2. Opportunity
  3. Mission
  4. Business model
  5. Marketing objectives
  6. Sales goals
  7. Competitive advantage strategies
  8. Positioning strategies
  9. Target market and customer segments
  10. Product and service offerings
  11. Value proposition
  12. Pricing strategies
  13. Sales strategies and tactics
  14. Distribution strategies
  15. Promotional strategies
  16. Customer relationship management

Characteristics of a Great Venture Plan

  1. Presents a clear explanation of why the venture concept is a significant opportunity.
  2. Provides a concise description of the venture's products or services.
  3. Provides a clear, rational explanation of why the venture idea is better than anything else already available.
  4. Succinctly explains customer benefits in qualitative and quantitative terms.
  5. Provides a clear explanation of the one or two things the company does best.
  6. Focuses on market-driven opportunities.
  7. Provides evidence of customer acceptance of the venture's products and services.
  8. Presents evidence of the marketability of the products and services.
  9. Presents a quality, sophisticated, experienced management team, advisors, and board of directors with complementary and encompassing business skills.
  10. Gives a clear sense of what the founders expect to accomplish in 3 to 7 years.
  11. Provides a rational explanation of why the investor should trust the management team to do what they say they are going to do.
  12. Identifies all the alternatives available to prospective customers.
  13. Addresses how the venture will develop and sustain a distinct competitive advantage.
  14. Addresses how the venture will develop and sustain a proprietary position.
  15. Contains reasonable financial projections with key data explained and justified.
  16. hows how and when the venture will generate sustainable positive cash flow streams.
  17. Describes the manufacturing and/or service delivery processes and associated costs in appropriate detail.
  18. Explains and justifies the level of product development required.
  19. Justifies financially the means chosen to sell the products and services.
  20. Supports credible growth projections.
  21. Provides a clear explanation of how the money invested in the venture will be used.
  22. Shows how and when the venture will generate sustainable profit.
  23. Shows an appreciation of investor needs.
  24. Shows how investors can cash out in three to seven years, with an appropriate return on their investment.
  25. Provides a clear explanation of what the investor will get for their investment.
  26. Identifies significant risks and proposes rational contingencies.
  27. Has the right appearance...not too fancy, not too plain.
  28. Is arranged properly with the executive summary, table of contents, and chapters in right order.
  29. Is the "right length"...not too long, not too convey all the pertinent information.
  30. Is plausible throughout.
  31. Has facts rather than opinions
  32. Is quantitative rather than qualitative
  33. Stresses specifics rather than generalities
  34. Reads like a combination of the Wall Street Journal, a model of good business writing, and USA Today, a model of good story-telling

Common Venture Plan Mistakes

1] Vagueness ... We see this a lot when people are afraid that someone will steal their idea. Lenders and investors are not interested in going into business themselves. They’re looking for places to put their money where they can get a desired return. If your business plan is too vague, they won’t understand what you’re doing, and they’ll put their money elsewhere.

2] Broad, Unsubstantiated Statements ... "Everyone loves ________________ …" Everyone? Fill the space with anything – chocolate, puppies, May flowers – and there is someone out there that just hates it, guaranteed. How about "There is a dire need for …" Dire? Are people dying in the streets because they don’t have your product or service? Not likely. Or "It is a known fact…" Known? By who? Don’t make broad, general statements you can’t substantiate.

3] Overly Optimistic Financial Projections ... You’ve got to have a positive attitude. But don’t be so positive that the reader will wonder if you realize that no one can predict the future with complete accuracy. Run scenarios that take various possibilities into account. You want to show lenders that you can pay back their loans or investors that you can pay dividends even if problems do crop up.

4] No Discussion of Risk ... Overly optimistic projections are usually accompanied by an absence of any discussion of risk. It is really important that you think about what can go wrong with your business and what you’re going to do if that happens. You can be absolutely sure that your reader will figure out what your risks are. You’d better assure them that you’ve thought about risk and have plans for dealing with it.

5] Inconsistency ... Does your marketing plan include tv advertising but your projections show only $200/month in advertising expenditures? That’s a real disconnect that any savvy reader will pick up right away. Chapters in a business plan are not separate, stand alone pieces. They all have to weave together to show that you know what you are doing.

6] Unrealistic Financial Assumptions ... Imagine 5-year projections with energy bills remaining constant over the entire five years. Or gross profit margins of 35% in the first year and 60% in the third. These things just don’t happen very often in real life. Make sure your numbers reflect the real world.

7] Sloppiness ... Spell-checker is a great tool but if your typo is another perfectly good English word it won’t get flagged. Not only should you proofread your business plan, but have one or more people who haven’t seen it before read it, too. We all have a tendency to see what we intended to write rather than what we actually typed. Fresh eyes are invaluable. And make sure you’ve double and triple-checked your numbers. Numbers that don’t add up correctly make a very bad impression.

8] Doesn’t Know the Market ... You really need to show that you know and understand your market(s). That means you’ve got to do some serious research. Here is where an outside consultant may be helpful. But with all the information available on the internet, you can do a good job by yourself if you put in the time and effort. See the Internet Resources page for some good websites.

9] Doesn’t Know the Competition ... No matter how unique your product or service, there’s always competition. Suppose, for example, that you were thinking of opening a bowling facility in a location where there isn’t another within a 25 mile radius – or even a 50 mile radius. You may think you have a monopoly. But that’s because you don’t recognize what your market really is. It isn’t the bowling market – it’s the recreation and entertainment market. Your competitors are movie theaters, amusement parks, miniature golf ranges, etc. If you don’t recognize this then how are you going to compete effectively?

10] Knocks the Competition ... People dismiss their competition too easily. First of all, if they’ve been in business for any length of time they must be doing something right. Ignore that at your own peril. If your widgets are better than theirs, then maybe their prices are lower or their service is superior or their advertising is more effective or their location is better. It’s not enough to know what’s wrong with your competition. If you’re going to succeed you’ve got to know what they do well and be prepared to compete with that.

11] Doesn’t Focus on the Reader ... Who are your readers and what do they want? Here’s a brief rundown:
  • Bankers: They want to know how you’re going to repay the loan.
  • Investors: They want to know if you’re going to be profitable enough to give them a high return either through dividends or by taking the business public.
  • Strategic Allies: They’re going to have to spend a lot of time and money to do joint business with you. They want to know if it will be worth the investment.
  • Major Clients (for Preferred Vendor Status): They’re going to invest time and money to bring you into the fold. The want to be sure you can deliver what they need, when they need it, at a price they can afford....AND that you're strong enough to be around for the long haul.
[Thanks, Victoria Posner]

Traditional Venture Plan Outline

  1. Venture Title
  2. Tag Line
  3. Logo
  4. Principles and Positions
  5. Contact Information
  6. Copyright and Disclaimers

  1. Description of the Problem or Opportunity
  2. The Business Venture Concept and Solution
  3. Key Business Model and Venture Strategies
  4. Target Market and Projections
  5. Competitive Advantages
  6. The Team
  7. The Offering

  1. The Industry
  2. The Problem or Opportunity
  3. The Product and Service Solutions
  4. The Company and the Concept
  5. Entry and Growth Strategy

  1. Target Market
  2. Customers
  3. Market Trends
  4. Direct and Indirect Competition
  5. Estimated Market Shares Sales
  6. Competitive Advantage
  7. On-going Market Evaluation

  1. Business Model
  2. Gross and Operating Margins
  3. Profit Potential and Durability
  4. Fixed, Variable, and Semi-variable Costs
  5. Months to Breakeven
  6. Months to Reach Positive Cash Flow

  1. Marketing Strategy
  2. Pricing
  3. Sales Strategies
  4. Sales Forecast and Methodology
  5. Distribution
  6. Advertising and Promotion Strategies

  1. Development Status and Tasks
  2. Difficulties and Risks
  3. Product Improvement and New Products
  4. Costs
  5. Proprietary Issues
  6. Intellectual Property Issues

  1. Operating Cycle
  2. Geographical Location
  3. Facilities and Improvements
  4. Operational Strategy
  5. Operational Plans
  6. Regulatory and Legal Issues

  1. Organization and Legal Structure
  2. Key Management Personnel
  3. Management Compensation and Ownership
  4. Employment and Other Agreements
  5. Stock Options and Bonus Plans
  6. Board of Directors
  7. Investors and Shareholders
  8. Supporting Professional Advisors and Services

  1. Timeline
  2. Development Goals and Strategies


  1. Actual Income Statements and Balance Sheets
  2. Pro Forma Income Statements
  3. Pro Forma Balance Sheets
  4. Pro Forma Cash Flow Analysis
  5. Break·Even Chart and Calculation
  6. Cost Control Strategies

  1. Required Financing
  2. Valuation
  3. Offering
  4. Capitalization
  5. Use of Funds
  6. Return on Investment

  1. Summary of Business Venture
  2. Mission Statement
  3. Vision Statement

  1. Resumes
  2. Product Data Sheets
  3. Marketing Material
  4. Detailed Research
  5. Issues of Sustainability of the Venture
  6. Impact on the Environment
  7. Impact on the Community
  8. Service and Warranty Policies

Things to Avoid in a Venture Plan

  1. Form over substance. If it looks good but doesn't have a solid basis in fact and research, you might as well save your energy.
  2. Empty claims. If you say something is so, back it up in the next sentence with a statistic or fact or quote from a knowledgeable source that supports the claim.
  3. Rumors about the competition. If you know for sure one is going out of business you can allude to it, but avoid listing their weaknesses or hearsay. Stick to facts.
  4. Superlatives and strong adjectives. Words like major, incredible, amazing, outstanding, unbelievable, terrific, great, most, best, and fabulous don't have a place in a business plan. Avoid ``unique" unless you can demonstrate with facts that the product or service is truly ``one of a kind". Your opportunity is probably not unique.
  5. Long documents. Keep it under 25 pages total. Write whatever you want to write, but keep it at home. If they want details, they will ask.
  6. Over estimating on your financial projections. Sure you want to look good, but resist optimism here. Use half of what you think is reasonable. Better to underestimate than set expectations that aren't fulfilled.
  7. Overly optimistic time frames. Ask around or do research on the Internet. If it takes most companies 6-12 months to get up and running, that is what it will take yours. If you think it will take 3 months to develop your prototype, double it. You will face delays you don't know about yet--ones you can't control.
  8. Gimmicks. Serious investors want facts, not hype. They may eat the chocolate rose that accompanies the business plan for your new florist shop, but it won't make them any more interested in investing in the venture.
  9. Typos and misspelled words. Use your spell checker, hire an editor or have four people read the document from back to front, but get those errors out of there if you want to be taken seriously.
  10. Amateurish financial projections. Spend some money and get an accountant to do these for you. They'll help you think through the financial side of your venture, plus put them into a standard business format that a business person expects.
[Thank you, Kaye Vivian]

Tips for Creating a New Venture

  1. Identify and screen opportunities ... create a vision and concept statement; build an initial core entrepreneurial team; describe the initial ideas about the value proposition and the business model
  2. Refine the concept, determine feasibility, and prepare a mission statement ... research the business idea and prepare a set of scenarios; draft the outline of a business plan and an executive summary
  3. Prepare a complete business plan with a financial plan and the legal organization suitable for the venture
  4. Determine the amount of financial, physical, and human resources required ... prepare a financial model for the business and determine the necessary resources; prepare a plan for acquiring these resources
  5. Secure the necessary resources and capabilities from investors, as sell as new talent and alliances
  6. Launch the new venture!