How to write a business plan

The key structure of a business plan should be:
• What is it?
• What purpose/inefficiency does it solve?
• Market opportunity
• Key business objectives/milestones
• Product differentiation
• Market conditions
• Competitors
• Customer universe
• Revenue models
• Marketing and PR
• Key people and headcount
• Top line three-year P&L numbers

Here are a few steps I take when creating my business plan:

1. I always start with an elevator statement. I need to articulate my entire proposition in a single sentence so it is clear and obvious what we do, to everyone.

2. Next I use a single page to highlight key milestones for the next three years: engagement/users and revenue/number of customers I expect to have, ie a snapshot of your P&L.

3. Create an executive summary. This is typically one A4 page which starts with your elevator statement and highlights every facet of the business. The important points to cover are: business purpose, market opportunity, key business drivers and milestones, revenue, and P&L.

4. Detailed piece on your vision. What does your business look like today, next year and by year five? How big can the business be? How will you realize your vision?

5. Your product/service. What are your competitive advantages? What IP have you created or proprietary technology developed? List the five key features of your product or service that will win adoption for you.

6. Marketing & PR. How will you/are you taking the product/service to market? Demonstrate how you can get traction, what channels you will use and what your customer and user acquisition strategy involves. How will marketing support your molestation strategy? PR is also important and is required for building and maintaining relationships and growth.

7. Revenue. How will you make money? What are your revenue streams? Don’t fudge this. Plug in numbers that will challenge you but you are genuinely confident of delivering. Never forecast based on what you think investors want to see. That is a sure-fire way to kill your business.

8. Management/founding team. Investors will almost always be sold on you and your founding team before they buy in to your business idea. A concise, well-articulated, detailed business plan with accurate revenue projections is the first step to demonstrating you are intelligent and understand your business and marketplace. However, a one-pager on you and key members of the team is important. Cover off work history/education but don’t make this boring. You all have personalities, show this off too.

9. Exit. Finish on how you think you’ll get a return on investment for investors, when it’s likely to happen and what it looks like (in terms of return) when you do. Remember, investors do not like lifestyle businesses. They want a return, usually with a multiple of at least 10 times what they commit. Show them how they can achieve this.

10. P&L. This isn’t a business plan, but a budget. Formulate a three to five-year budget outlining your income and expenditure forecasts in granular detail. This should also cover cash flow based on you receiving investment too, so an investor can clearly see when you break even, or run out of cash. Be realistic with it and attach this to the business plan.

Is this the formula to a winning business plan? That depends on you. No matter how great a business plan is, investors buy people. A solid, defensible business plan helps and should be used as your manual and point of reference when executing the strategy.

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