A business plan is a ‘Plan for your Business’. 

It is not a document that you make for the investors. It is a document that you should prepare for yourself. Writing down your business plan helps you think through the assumptions clearly, and often writing helps you identify impracticalities in the through process.

Yes, for investor presentations too, a business plan is necessary.

Broadly speaking, a business plan should communicate the following to an investor:

  • What are you selling and to whom?
  • How large do you see the company growing to – what is your own aspiration for the company?
  • How are you going to implement it?
  • How are you going to make money?
  • Why are you the right team for the investors to invest in ?

Components of a Business Plan

Brief business description
No more than one paragraph to describe your business and the business opportunity. If it takes more than a paragraph to describe your business, perhaps you need to revisit the drawing board. The simpler the message, the quicker you will draw investor attention.

This section should answer the question ‘Why is this team/entrepreneur best suited to implement this business opportunity’. Keep it simple. Include educational qualifications and work experience.

What is the issue / pain point that your product / solution will address
This section will reflect the clarity of your thinking about your business opportunity. Be precise and succinct.

What is the size of the market opportunity
Investors like big ideas with big markets. Be clear about who and where is going to buy your product/service and how much they would pay for it.

Product / Technology Overview
Highlight the uniqueness of the technology and application and not the technical details of the solution.

What is the value proposition
Why would consumers choose this over others?

Business model / financial model
This is about how you will make money from this business opportunity. The business model is important, not an excel sheet with 5 year detailed projections. Please remember, a 3/5-year excel sheet projection is at best an educated guess. More than specific details, the financial model should reflect the aspiration of the team.

Competitive landscape
Who are you currently or in future likely to compete against and what is your plan to win this battle?

Risk factors to execution
What are the market risks, financial risks, business model risks, execution risks, etc. that may hamper your plans?

Funding objective and use of funds
Describe how much money you want to raise and what you intend doing with these funds.

Fundraising history and investors
Mention previous investment history including year, amount and investors.

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