What to include in a business plan

1. Developing
Your Business Plan
What to Include in a Business
Plan
Resources:
Angel Capital Foundation  Angel Resource Institute  Ohio TechAngels
The Entrepreneur’s Handbook

2. The Most Successful Business Plans Are
Always Written by the Entrepreneur.
Business Plan Checklist
1. The Importance of Your
Business Plan
2. The Mind Set
3. Tips from Savvy
Entrepreneurs
4. Terms, Statements, and
Beliefs to Avoid
5. Key Questions to
Answer
6. Summary
Business Plan Table of
Contents
1. Executive Summary
2. Elevator Pitch
3. Company Overview and
Background
4. Problem/Solution
5. Products and Technology
6. Market Opportunity
7. Competition
8. Marketing Strategy and Execution
9. Management Team
10. Financials, Use of Funds,
Investment Strategy
11. Risk Assessment
12. Exit Strategy

3. Business Plan Checklist:
The Importance of a Business Plan
• If you plan to ask someone for money…you must
have a business plan.
• Investors, potential board members, and strategic
partners are all audiences.
• Writing a business plan gets everyone in the
company working together to formally outline the
intentions of the business.
• The business plan outlines the key milestones to be
achieved.
• It is the all important first impression and is an
appeal for raising money, forming relationships, or
promoting the company.

4. Business Plan Checklist:
The Mind Set
• Writing the business plan helps the founding team learn
the business and identify risks.
• Express your ideas and passion in your own voice and
words.
• Be disciplined about organizing the information you
gather on the market, competitors, and customers.
• Divide your plan into sections and write on it at least an
hour a day until you have a complete first draft.
• Focus on the business opportunity and the milestones
to be achieved—not the technology.
• A Business Plan is not just an exercise; potential
investors base their decisions on what you write.

5. Business Plan Checklist:
Tips from Savvy Entrepreneurs
• Target the correct audience: investors, partners,
or Board of Directors.
• Rewrite the Executive Summary until it’s a page
and a half of perfect.
• Avoid technical jargon.
• Use charts, graphs, headings.
• Aim for 15 pages – Do not exceed 30.
• Hold the financial projects to 3 pages.
• Write a Plan that’s easy to read, with accurate,
current, factual data.

6. Business Plan Checklist:
Terms, Statements, and Beliefs to Avoid
• This is the best deal you will ever see.
• We are chasing billion dollar markets.
• Our intellectual property is solid.
• No one else does what we do.
• Big corporations are too slow to be a threat.
• We have no competition.
• Our financial projections are conservative.
• We need 1% market share to meet our conservative projections.
• Our margins exceed 10%.
• Key employees will join us at funding.
• A big corporate partner is about to sign on.
• Several angels and/or VCs are interested in funding our plan.
• Revenues are not our current focus.

7. Business Plan Checklist:
Thinking About an Investor’s Questions is a Great
Way to Begin Crafting Your Plan
• What problem does your product or service solve and how?
• What unique thing about your company will make it succeed?
• What are you assumptions?
• What do you know about the market and the competition?
• What are the barriers to entry?
• What is management team like? Have they worked together before?
• How are you going to make money for yourself and your investors?
• What are the key milestones?
• How much money do you need to accomplish these?
• How has the company been funded before?
• How are you going to use the money?
• What are the risks?
When you have answered these questions,
you have the draft of your business plan.

8. Business Plan Checklist:
The Summary
• Dedicate the plan to the business, not the
innovation or product.
• Illustrate a solution to a problem.
• Explain how that solution generates revenue
and profits for the business.

9. Business Plan Table of Contents
1. Executive Summary
2. Elevator Pitch
3. Company Overview and Background
4. Problem/Solution
5. Products and Technology
6. Market Opportunity
7. Marketing Strategy and Execution
8. Management Team
9. Financials, Use of Funds, Investment Strategy
10. Risk Assessment
11. Exit Strategy

10. 1. Executive Summary
• Your “Do or Die” opportunity to grab an
investor’s attention.
• Tell your story in a compelling way.
• Hit the major highlights.
• Follow the same format as the full Plan.
• Make the Executive Summary easy to skim.
• Strive for a two page summary.
• Remember active angel investors and VCs
receive 3 to 5 business plans a week.

11. 1. Executive Summary (cont.)
Limit to a 2 to 3 page detachable document.
Include these key points:
Problem and solution
Funds sought and use of funds
Company overview and background
Products and technology
Market opportunity
Competition
Marketing strategy and execution
Management team
Financial projections and exit strategy

12. 2. Elevator Pitch
• A compelling description of your company that
can be delivered in the time it takes an elevator
to reach the next floor.
• An effective elevator pitch lasts about a minute.
• It’s no more than three lines on a page.
• Practice it until you know it better than your
email address.

13. 3. Company Overview and Background
• Convey the founding team’s direction and foresight through
progress achieved to date.
• Convey , confidence, knowledge of market and customers, and
credibility when describing future plans.
• Lightly touch on product and technology and market development.
• Mention strategic partnerships or relationships.
• Include these key points:
Founding history
A short mission statement
Significant milestones achieved to date

14. 4. Problem/Solution
• Outline the current or emerging problem that your
company can solve.
• Emphasize your solution.
• Show how solving that problem will generate revenue
and profits for your business.
• Demonstrate that your knowledge is both quantitative
and based on real conversations with customers,
industry experts, and competitors.
• Answer these key questions:
How will customers use your product?
Why will people pay money for the product/service your
company plans to sell?
Why will there be high demand in the near future?

15. 5. Market Opportunity
• Demonstrate your market knowledge.
• Prioritize and focus on the markets you intend
to serve.
• Speculate on the long-term growth prospects of
the market and the company.
• Cite third-party research to support your claims.
• Avoid top-down assessments.
• Highlight demonstrated interest from
companies/customers.
• Outline size and growth trend of target market.

16. 6. Products and Technology
• Focus on results, not research.
• Cover important aspects of the product.
• Include technical specs in appendices only.
• Focus on unique or competitive advantages.
• Discuss how you will protect you IP and use IP to
create a barrier to competition.
• Include helpful diagrams to help the reader.
• Emphasize the benefit to the end-user.
• Test your effectiveness on your non-technical
friends.

17. 7. Competition
• Be exhaustive in your research.
• List your market competitors.
• Include a comparison chart of competitor
attributes with your solution.
• Identify future and potential competition.
• Don’t neglect that nemesis of change—inertia
and status quo.

18. 8. Market Strategy and Execution
• Illustrate how you will attack the market and produce
revenue.
• Include key milestones chart for the next 6-24 months.
• Identify early adopters, beta customers, or niche
markets.
• Explain your pricing strategy.
• Include a chart of milestones for the next 6 to 24
months.
• Outline the following points:
Marketing, channels, sales, and promotional strategy
Partnering goals
Operational strategies key to execution of the
overall business mission

19. 9. Management Team
• Investors invest in people first and technology second.
• Convince investors of team’s worthiness and credibility.
• Include a paragraph for key executives covering depth
and all relevant experiences.
• Acknowledge the team’s limitations.
• Summarize key hires for the immediate, intermediate,
and long-term.
• Recognize the limits of the founding staff in relation to
the future company.
• Cite when and where the company will most benefit
from changes in management.

20. 10. Financials
• Limit to a two or three page summary of 3 to 5 years.
• Link assumptions and financial projections to the key milestones identified
in the marketing section.
• Reserve the detailed financial worksheets for the appendices.
• Investment opportunity details
Form of investment
Pre/post money valuation and ownership percentage
Funds sought
Use of funds
Subsequent funding rounds required.
• Key Points to Include:
Sales volumes (units and revenue)
Revenue growth, gross margin and operating expense
Income statement, cash flows, and balance sheet
Exit Strategies
Return on Investment

21. 11. Risk Assessment
• Experienced investors know there is risk in
every business plan.
• They want to know that you know it too.
• Perform a detailed risk assessment
encompassing business model, technology,
market, execution, and finance risk.
• Decide how to reduce as much risk as possible
and then how much to say about the rest.

22. 12. Exit Strategy
• Realistically relay the specifics of your exit options
• Acquisition
• Identify at least two buyers and why they would be
interested
• Describe recent comparable transactions
• Express any current relationships with potential
acquirers
• IPO
• Describe recent comparable offerings
• Be prepared to explain why your company could be
an IPO candidate