Confidential
Confidentiality
This business plan is the property of the Company and is considered to be strictly confidential. It contains information intended only for the person to whom it is transmitted. With receipt of this plan, recipient acknowledges and agrees that: i) in the event recipient does not wish to pursue this matter, this document will be returned, at the address listed above as soon as possible; ii) the recipient will not copy, fax, reproduce, divulge, or distribute this confidential plan, in whole or in part, without the expressed written consent of the Company; iii) all of the information herein will be treated as confidential material with no less care than that afforded to your own company confidential material.
This Business Plan contains forward-looking statements which involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" and elsewhere in this Business Plan.
Table of Contents
EXECUTIVE SUMMARY (3)
MISSION STATEMENT (4)
INDUSTRY AND MARKETPLACE ANALYSIS (5)
D ESCRIPTION OF THE I NDUSTRY AND M ARKET (5)
C USTOMERS AND M ARKET S EGMENTATION (5)
C OMPETITION (5)
T HE B USINESS O PPORTUNITY (6)
THE INNOVATION – PRODUCT OR SERVICE DESCRIPTION (7)
O VERVIEW OF THE P RODUCT OR SERVICE (7)
P RODUCT B ENEFITS (7)
T ECHNOLOGY (7)
P RODUCT C OMPARISON (7)
F UTURE P RODUCT R OADMAP (7)
THE BUSINESS STRATEGY (8)
T HE B USINESS S TRATEGY (8)
M ETHODS OF D OING B USINESS (8)
F UTURE O PPORTUNITIES (8)
MARKETING AND SALES (9)
M ARKET R ESEARCH (9)
M ARKETING P LAN (9)
T ARGET M ARKETS (9)
RESEARCH AND DEVELOPMENT (10)
OPERATION / MANUFACTURING (11)
MANAGEMENT AND OWNERSHIP (12)
FUNDS REQUIRED AND THEIR USES (13)
FINANCES (14)
A SSUMPTIONS (14)
S ALES F ORECAST (14)
O PERATING E XPENSES (14)
P ROFIT &L OSS (14)
C ASH F LOW (14)
NPV AND B REAK E VEN P OINT (14)
BIBLIOGRAPHY (15)
APPENDICES (15)
Executive Summary
(2-3 pages)
The purpose of this section is to provide a short introduction to the company and clearly define the unique competencies of the company, which will ensure its success. This section should include the following:
? A summary of the mission statement & the vision.
?Company background (if relevant) including date of establishment, financial and marketing achievements etc.
?Industry and Market Summary.
?The Business Opportunity.
? A summary of the Innovation.
?Business Strategy summary.
?Marketing and Sales.
?Research and Development.
?Operations/ Manufacturing.
?Management and Ownership.
?Funds Required.
?Financial Summary.
Mission Statement
(1-3 page)
The purpose of this section is to provide the mission and vision of the company. This section should include:
?Who we are
?What we do (product/service)
?How we do it (technology)
?For whom we do it (customer segment, needs)
?Vision
?Company background (if relevant) including date of establishment, financial and marketing achievements, etc.
Industry and Marketplace Analysis
(4-6 pages)
The purpose of this section is to provide the investor with background on the industry and its growth potential.
Description of the Industry and Market
This section should include the following:
?Description of the industry
?Industry size today (in $ and or units), Forecasted industry size in 3-5 years
?What are the major drivers for growth? For example, are products becoming more affordable, easier-to-use, faster, greater performance? Is there increased awareness about the industry that might be driving growth? Is positive user experience driving growth?
?What trends are emerging in the industry? For example, are there standards in the industry? Are there new technologies coming out? Are big companies becoming interested in the industry? Is there a tendency towards consolidation? Where is the market heading?
?Industry’s value chain (a diagram is recommended)
Customers and Market Segmentation
?How is the market segmented? By price, application, etc.? What is the size, the growth rate and the needs of the targeted market segment?
?Who are your immediate customers, who are the end users?
Competition
The purpose of this section is to present factors that influence competition in your industry, to present who your main competitors (or competitors’ groups) are a nd your strengths / weaknesses vis-a-vis each competitor (or group).
?What are the crucial competitive factors in your industry? Price, reliability, compliance with standards, installed base, time-to-market, technological innovation, availability of customer support?
?Who are the main competitors’ groups? Provide a short description of each group, the differentiating aspects of their products, corporate resources, market positioning, etc. Who are their customers? Include a summary table that compares the competing solutions and your proposed solution.
The Business Opportunity
The purpose of this section is to explain the market need for the product / service. The idea is to show what is lacking in the industry and the business benefits that will be gained by resolving these issues. Note that these issues should correspond with the problems that your new product will resolve.
This section should include the following:
?What are the key needs of the customers in the target segment?
?What are the challenges that the industry is facing (that the new innovation responds to)? For example, are products unreliable, highly fallible, incompatible, require long training periods, provide poor performance, expensive, not broadly available?
?What will be the business results for users if these challenges are overcome?
For example, greater productivity, lower costs, shorter time-to-market
?What will be the business results for users in $ / % terms? For example, costs will be cut by $x, productivity will be increased by x%.
?Who has the most to gain for these improved business benefits? Who is hurting the most from the fact that the industry has not yet overcome the challenges described above? Who will be willing to pay for the improved business benefits?
?What is the revenue opportunity?
The Innovation – Product or Service Description
(3 – 5 pages)
The purpose of this section is to present the new product or service and show how it will overcome the challenges presented above.
Overview of the Product or Service
?What is the new product / service which the company is proposing?
?What stage of development is it in?
?What is the quantum leap that makes your solution superior
Product Benefits
?What are the benefits of the new product / service to the different markets?
How does it resolve the challenges described above?
?Who will reap these benefits?
Technology
On which technology is the product/service based? Is this technology unique?
How central is the technology to the product? What is its expected life cycle and future generations? Is it patented? Are there substitute technologies?
Product Comparison
Conduct a comparative analysis of your product and resources vs. the competing solutions. This should include comparison of track record and reputation, market penetration, technological capabilities, strengths and weaknesses of each product, target markets, ability to meet customer requirements, feature comparison, price comparison, etc. (presenting in a table is recommended)
Future Product Roadmap
?What is the future product roadmap? What additional products might the company develop in the future?
The Business Strategy
(3-5 pages)
The Business Strategy
?SWOT analysis
?Porter's Model - 5 competitive Forces
?You should discuss your competitive advantage, how is it achieved, what are the resources that you have or willing to develop in order to achieve sustainable competitive advantage.
?What will the company sell and to whom? How is it going to make money? ?Which stages of the value-added chain does the firm occupy? Who are its suppliers, who are its immediate customers, what marketing channels does the firm use? How does the production, marketing and after-sales servicing?
?How do you chose your gereic strategy? How is the firm going to position itself in the industry: niche player, differentiator or cost leader?
Methods of Doing Business
?What are the revenue streams?
Future Opportunities
?What are the plans for the future? Market expansions, new products, new directions.
Marketing and Sales
(4-5 pages)
The purpose of this section is to define the marketing strategy: the specific market segments the company will be operating in and how the company will penetrate those segments.
Market Research
?What are the main results of the market research?
?What are the conclusions derived from the market research results? Marketing Plan
?Marketing mix –4Ps. How will the company achieve its sales / market share goals? What are the distribution channels? What will be the pricing policy? What advertising / PR activities will be required? What is the advertising and PR budget and its allocation to the media channels?
Target Markets
?Have potential customers in each market segment been contacted? What feedback has been received from potential customers in each target market segment? Any signed agreements?
?Which markets will the company focus on first and why?
?What are the market share goals for the company –short term and long term?
Research and Development
(2-3 pages)
The purpose of this section is to present a detailed plan of the R&D program including milestones and a description of the time and resources required to achieve those milestones.
This section should include:
?What R&D has been done to date? What stage is development at: alpha, beta, stage I-IV?
?How long will it take to develop the product / service until it is ready for commercial use? Following is a sample Gantt chart for this purpose:
?What resources will be required – equipment and manpower? How much will it cost? This can also be provided in graph form.
?How does the technical support program work? What kind of support is needed?
Operation / Manufacturing
(2-3 pages)
The purpose of this section is to present the company’s manufacturing capabili ties. This section should include the following:
?Production procedures –What parts of the production process are performed in-house? What parts are produced by subcontractors?
?How are suppliers selected? What are lead time requirements? What is the risk of critical element shortages?
?Production facilities and capabilities
?ISO 9000 compliance?
?Peoduct/ service cost estimations.
Management and Ownership
(2-3 pages)
The purpose of this section is to provide a profile of the company’s core management team and its owners.
This section should include:
?Profile of each of the key managers
?Plans for recruiting key personnel
?Organization chart
?Profile of company owners / BOD
?Short profiles of the advisory board members
Funds Required and Their Uses
(1-2 pages)
The purpose of this section is to describe to investors how their investment funds will be spent and how much additional funding will be required and when.
This section should include:
?Current funding requirements – amount, when
?Funding requirements over the next 3-5 years
?Use of proceeds –capital expenditures, working capital, debt retirement, acquisitions
?Exit and long range financial strategies (liquidating investors’ positions) –going public, leveraged buyout, acquisition by another company
This can be provided in table form as follows:
Finances
(3-4 pages)
The resolution of the financial documents should be on monthly basis for the first year, quarterly basis for the second year, and annual basis for the next 3 years. Assumptions
Sales Forecast
An example of forecasted sales:
Operating Expenses
Profit & Loss
Cash Flow
NPV , Break Even Point, Return On Investment
Bibliography
(1-3 pages)
Appendices
The appendices are where you collect the documents that support the body of the business plan.
Detailed Finanacial Statements:
Financial assumptions
Profit & Loss Statement
Balance Sheet
Cash Flow
Monthly Cash Flow for the 1st year
Break-even analysis
Detailed development timeline
Detailed operations layout
Risk Factors
Market Research – Questionnaire, Methodology, Sample description, and Results
Reports of the meetings with the supervisor
Proposal Submission
Outline Submission
Intermedite Report Submission