9/3/2014

How to Write a Business Plan

Home

How to Write a Business

Plan

About

Courses

How-Tos

Tips & Tricks

Blog

Contact

Home / Blog / How to Write a Business Plan

Previous

Next

How to Write a Business Plan

963
FLARES

http://www.nenonline.tv/how-to-write-a-business-plan/

68

856

27

12

1/7

--

9/3/2014

How to Write a Business Plan

The business plan is the content, the strategy, and the

specifics of what is going to happen.
Powered By CoSchedule

CLICK TO TWEET

A business plan is a living breathing document that outlines the various facets of a particular business
entity in the short and long term in order to achieve success. A business plan is not something you draft
and forget. You need to keep revising it, reviewing it, and building upon it. Also, when drawing up a
business plan you need to look at multiple facets from different stakeholders viewpoints. Finally, you need
to steer the ship always keeping the long term destination in sight.
Here are some tips and tricks that will help you to craft a good business plan.
Why is a business plan required?
One of the most common reasons to write a business plan is to raise risk capital. When starting a new
venture or moving business to the next level, a business plan helps in convincing investors to loosen their
purse strings. A b-plan also gives the companys loan application a better chance of success.
It helps attract high level management talent. It educates strategic partners about the company and its
goals. It measures and analyzes the performance of the company against set parameters.
It helps predict and strategise future growth patterns and scenarios affecting business

revenues. It

guides the companys horizontal and vertical business units. It helps monitor changes in the company and
its affect on the overall business goal.

What are the components of a business plan?

Though a business plan is not a precursor to getting funded, having a detailed business plan is always a
good sign. Having a business plan helps you get your foot in the door. A well laid business plan establishes
that you are serious about your start-up.
The following twelve points are recommended components of your b-plan.
Executive Summary- This is the abstract of your business plan which briefly tells your reader where
your company is, where you want to take it, and why your business idea will be successful.
Company Overview- This provides more information about your business, why and when it was

http://www.nenonline.tv/how-to-write-a-business-plan/

2/7

9/3/2014

How to Write a Business Plan

formed, its mission, business model, strategy, and any existing strategic relationships.
Team Overview- This section explains the background of your company executives and managers and
how that will help you meet business goals.
Product or Service Overview- If you sell products, state whether you are the manufacturer,
distributor, and/or retailer and tell about your manufacturing process, availability of materials, how
you handle inventory and fulfilment, etc. If you provide services, describe those services.
Proof of Concept- This section demonstrates the feasibility of your business idea.
Market Size, Trends and Opportunities- Use this space to showcase your vision of why your business
will be successful, backing that up with market research that identifies your target market and industry
and customer trends.
Competition Offering- In this section, Address what your competitors are doing and what makes your
product/service different from theirs.
Business Model- Explain in this section how you intent to generate revenue and make a profit from
operations.
Operational Workflow- Describe the tasks, procedural steps, organizations or people involved, required
input and output information, and tools needed for each step of your business process.
Sales and Marketing- This section explains what your marketing strategy is, how you will execute it
and how you will ultimately generate sales.
Revenue Forecast, Investment Requirements & Capital Structure- Write this section only once you
have completed the above sections. In this, include your projected profit and loss statements, your
balance sheet, and your cash flow statements for the next three years.
Potential Risks and Gaps- Explain the possible pitfalls that your business may face.
What does an investor look for in a business plan?
We have talked about the reasons why an entrepreneur requires a business plan. Now lets get onto the
other side and gain an insight on what investors look for in a business plan.
Business Idea Feasibility- The investors want to know if your business idea is thought through.
Weather it is addressing a need and whether there is a market for it.
Owner/Team Credibility- Passion, perseverance and focus on execution are traits that investors
look for in entrepreneurs.
Business Model- Your business model should be stable and should evolve based on the numerous

http://www.nenonline.tv/how-to-write-a-business-plan/

3/7

9/3/2014

How to Write a Business Plan

market dynamics.
Market Size, Scalability & Opportunity- Every investor will look at your business from a scalability
standpoint since scalability determines exit options.
Validation of Business & Revenue Model- Have you tested your product in the market? Have you
generated traction? These are important questions that investors want answered.
Investment Return- How much return would they get on their money is something that is always at
the back of an investors mind.
Competition & Other Risks- State the market risks and corresponding mitigation techniques.
Execution- An execution timeline infuses an investor with the confidence to invest in your business.
Market Position & Profitability- Convincing your investor that you have a comfortable market
position and can increase your profitability based on this is important.
Exit Options- Any investor who invests in your business also wants to make an exit. Hence, stating
exit options is crucial.
How to Attract Capital?
One of the major reasons for charting out a business plan is to attract capital. Here are few things you can
do to smoothen the process of getting funded:
Set up a professional company
Gather a great team (experience and education helps)
Build a prototype before you get to the investor
Protect your intellectual property (trademarks, patents, trade-secrets)
Get customers to try your product and make a few sales
Think through your business plan
Build a professional financial model
Minimize cash burn rate
Network! Network! Network!
Leave cash on the table

Traps and White Lies

Given the over abundance of well meaning advice available to a budding entrepreneur, it is easy to be
misled. There are typical mistakes that entrepreneurs often make. Some of them say that they dont need a

http://www.nenonline.tv/how-to-write-a-business-plan/

4/7

9/3/2014

How to Write a Business Plan

good business plan. Others think that they dont have any competition at all.
Complacently declaring to an investor that you have first mover advantage when chances are that you just
might not have heard of competitors is another common trap many entrepreneurs fall into. When you are
a veteran in your industry, holding onto the smug notion that you know everything there is to know in
this industry could be a deal-breaker.
Dont tell an investor that customers will come after you build your product. Rather try to build your
product/service and have customers before you approach an investor.
Investing your own money gives confidence to the investor so put some skin into the game. Some think
that the investor is going to run away with their idea. You need to remember that the investor is there to
help businesses grow. Dont approach investors expecting them to sign a non disclosure agreement.
Apart from these traps, there are various white lies that investors always hear. As an entrepreneur, it is
crucial that you avoid these. Never say that your projections are conservative.
If you have done your market study/research well then your projections are realistic. So even if you think
that your projections are conservative, chances are that there are various noise parameters that you have
overlooked. Conduct a good study of your market before approach an investor.
Do not rely on reports of other companies. Confidently stating- nobody else is doing what we do, is
another typical mistake. Also, never underestimate large competitors. Even if their current pace is slow,
when they do get on track they can pump in more money and wipe you out.
Instead, say that you are younger and faster rather than saying that the mega corps are slow. Last but not
the least, many say- all I need to do is get 1% of the market. Again, always be realistic in your estimates.
Having a great business plan, is the first step towards achieving everything you have dreamt about for
your business. Hope you found the tips shared in this post to be useful. Wish you all the best with your
Home
About
Courses
entrepreneurial
journey. How-Tos

Tips & Tricks

Blog

Contact

This post is based on a Webinar by Mr. Tim Mathews, director at Research PE India. You can find a
recording of the session here.

http://www.nenonline.tv/how-to-write-a-business-plan/

5/7

9/3/2014

How to Write a Business Plan

963
FLARES

68

856

27

12

--

Categories: Blog | Tags: | 3 Comments

Share This Story, Choose Your Platform!

3 Comments

nenonline

Sort by Best

Share

Login

Favorite

Join the discussion

Baldwin Dias

10 months ago

The lowest cost solution to make a business plan is to hire a person who can just prepare financial sheets for you. and then one
can write the content on above mentioned points. because most of the startups have Engineering or IT background and they find it
difficult to prepare the financial sheets. thats where the delay happens and the investors are more interested in financial sheets
then in idea.
1

Reply Share

Manoj Surya

a year ago

What does Leave Cash on the Table Mean ?

Reply Share

Arunima Das > Manoj Surya

a year ago

There are companies which have very high valuation in the start-up phase. This makes it difficult to raise funds. No
investor would be interested if you are very hard to negotiate with. Suppose you you are looking at raising 10 lakhs from an
investor but he wants to negotiate a lower amount. Your venture becomes more attractive if you are malleable to arriving at
a 8 lakhs figure. This is what leaving cash on the table means. You are leaving 2 lakhs on the negotiation tables. Hope this
helps.
8

Reply Share

http://www.nenonline.tv/how-to-write-a-business-plan/

6/7

9/3/2014

RECENT TW EETS
7 awesome #quotes on life and work

How to Write a Business Plan

RECENT COMMENTS

RECENT POSTS

deepak chhapola on Conclusion

Decoding Culture

Kalyan Karteek on Conceptualization & Planning

6 Marketing Tips that can be Your Success

Mantras

by Steve Jobs
http://t.co/JBwyJefqTy #SteveJobs
http://t.co/JP3sZ17ktV
3 hours ago

Sundar on 10 Books Every Entrepreneur Should

Read

Do you have a #startup event youd

Maneesh Dhooper on 3 Issues Young

Entrepreneurs Face

like to share with our community?

Post it on our site!
http://t.co/q1i0vhK2B2
7 hours ago

10 Quotes on Beginning
11 Sales Tips for Entrepreneurs
13 Reasons Your Startup Needs Mentors

Kanak Shah on Startups and Patenting, Do they

Go Together?

Building your startup's #marketing

#strategy? Attend our expert-led
workshop on marketing: #Chennai
@desicorps http://t.co/RTSFLe6Ic3
8 hours ago

Copyright 2014 Entrepreneur Academy | All Rights Reserved | Powered by TripleW

http://www.nenonline.tv/how-to-write-a-business-plan/

7/7