General Comment: Good business plan is long on thinking/quality, not quantity. Use of bullet points followed by narrative, hard/solid facts and data, liberal use of tables and graphs to summarize/graphically depict data generally makes for a good, hard hitting, easy to read/digest business plan. A good plan generally has the following sections.
I. Executive Summary: (2-3 pages, tight, synthesis of business plan, i.e. brief history, the market, the company’s product/service, the company’s value proposition, strategy moving forward, management team, historical and projected financial performance, amount being raised and why, investor exit strategy and expected returns).
II.
Key Investment Considerations: (1-2 pages, bullet
points and text on why this is a good investment).
III.
Company Background:
(1 page, brief history of company and key milestones along the way).
IV.
Industry Overview: (2-3 pages/graphs,
description/definition of the market, size, growth rate, structure, market
forces and trends).
V.
Company’s Products and Services: (2-3 pages/graphs,
description of products, services, customers, distribution channels).
VI.
Company’s Value Proposition: (1-2 pages/graphs,
pin-point unique value proposition to customers, competitors, positioning
versus competitors).
VII.
Operating Strategy: (2-3 pages, strategy moving forward
in key business areas i.e. product strategy, production/publishing strategy,
sales strategy, distribution strategy, financing strategy, etc.).
VIII.
Management Team: (1-2 pages, brief description of each
member of the senior management team, general description of the team’s unique
strengths to get the job done moving forward, possible holes and how/when going
to be filled, summary organization chart).
IX.
Finance: (1-2 pages, brief narrative and graphical
summary of historical financial performance, economic model for the business,
key operating metrics/margins characteristic of the business, capital being
raised, use of proceeds, summary Annual P & L and Balance Sheet showing
past 3 years and pro forma forecast for next five years).
X.
Risks and Opportunities: (1-2 pages, managements
assessment of the key risks and opportunities in the business moving forward,
focus upon market/competition, technology/product/service delivery, management
team, finance/capitalization)
XI.
Summary: (less than 1 page, brief statement about
market opportunity, company’s unique position in market, strength of management
to execute strategy, amount of money being raised, return characteristics of
the investment, exit strategy and expected timeframe to exit).
Appendix A: Detailed Financial Model (monthly year 1, quarterly year 2 & 3, yearly year 4 & 5, P & L, Balance Sheet and Cash Flows, along with underlying assumptions).
Appendix B: Senior Management Team Resumes; cross section/summary background on professional staff.
Appendix C: One or two key investment banking/authoritative industry analysts report/industry research on market/competitors, if available. Company brochure/marketing information, if available.