For Entrepreneurs, Professionals and Growth Businessess Developing a Business Plan to Guide Growth and Secure Venture Funding

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Jon Hunt is the Lead Consultant for The Business Plan Team which works with growing businesses, entrepreneurs & start-ups that need help developing a professional business plan to secure funding and guide internal management. It has developed business plans for a wide range of businesses and corporate clients looking to raise funding of between £250,000 and £200million in many different industry sectors including Social Media, Retail, Construction, Mining, Renewable Energy, Technology, Healthcare, Interior Design, Sport & Leisure, Investment Banking, Wealth Management and Trading. Testimonials from these clients illustrate the high levels of service TBPT provides.

Friday, 31 August 2012

Tech Business Plan: Improve Your Chances of Funding for Your Technology Start-up or Business

Developing a Business Plan for a tech start-up or early stage business has specific challenges. You will need to cover the key sections of a business plan and address the 4 key areas an investor or funder will review. But you will also have to go a stage further to convince an investor that you have more than just an idea on paper.

Investors want to de-risk their investments and the more you can help them, the more likely you are going to see the colour of their money. Here are a few tips to help improve your chances of securing funding for a technology start-up or business:

1. Management: Make sure you have the right skill sets and can prove your capability to deliver. Investors like to see that the team in place (including any outsourced suppliers) have proven experience delivering the type of technology proposition you are seeking funding for. Knowledge of the market that you are addressing is also critical.

2. Specification & Costing - your investment proposal will be significantly de-risked if you can provide a functional and/or technical specification that has been validated and costed out for the initial phases of development. Summarise this in a product road map that shows milestones of design, prototyping, development, testing, and launch as well as longer term opportunities for growth. 

3. Execution Control - Investors will pay particular attention to your ability to control the development process. It is all to easy to find technology propositions that go over time and budget. Whatever your proportion of in-house and outsourced development show that you have control of the process of development and retention of any Intellectual Property (IP) during development.

4. Working Model / Illustration - If you don't have a fully functioning prototype then develop a mock-up that illustrates the proposition. Communicating the potential and functionality of your proposition is made a lot easier by visualisation.

6. Customers & Sales - If you have customers and sales you have a proof point that there is interest in your market offering which helps further de-risk the proposition in the eyes of an investor. Where this is not possible then see if you can seek letters of interest, letters of intent to purchase, or can demonstrate a significant following of your product or service via social media or within your specialist area of industry.

7. Investors - Choose them carefully and mind your language. Explore the right type of investors for you (hands on or off) and research them in some detail to try and understand their motivations and investment criteria. Once you have done that be careful not to alienate through the use of highly technical language or concepts that may confuse. Remember, investors are primarily interested in a commercial return for their investment - speak to them in a language they will understand.

Finally, if you are looking for inspiration, take a look at the 2013 Technology Pioneers recognised by the World Economic Forum. There are some well known previous winners (Mozilla, DropBox etc.) and both past and present inspire with their potential to change the way we live life or do business.

Good Luck!

Jon Hunt
Lead Consultant
The Business Plan Team
www.TheBusinessPlanTeam.co.uk

The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based just outside Oxford, UK.

If you are thinking of engaging someone to help you with developing your business plan take a look at our article on how to select a business plan consultant. 

Wordle: Business Planning For Tech Companies

Tuesday, 21 August 2012

10 Key Sections of Your Business Plan

Follow a typical structure for your business plan as it makes it easier for anyone evaluating it. Bankers and Investors see hundreds of plans and if they have to work out whether you have all the information it will likely end up in the reject pile.

The following sections should be in every business plan:

1. Executive Summary: This should be no more than two pages, compel the reader to read on, and be written last of all once all other sections are complete.

2. Company Background and Legal Entity: How and why the company came into existence, what products and /or services it offers, any track record of performance and its legal status.

3. The Market: This should include current statistics and trends on the market being addressed. It should also include an analysis of the customers in the market space - who they are, how and what they buy. It should culminate in the market opportunity facing the company. 

4. Company Product and/or Services: What are you proposing to bring to the market to meet the market opportunity?

5. Competitive Analysis: This should include an analysis of your direct and indirect competition and culminate in how your offer differentiates from that of your competitors in such a way that will gain you competitive advantage.

6. Sales & Marketing Plan: This identifies your target audience and details how you are going to reach it as well as giving a summary of your sales forecast.

7. Operations: This section shows how your business is going to deliver your product or service operationally - who does what and how.

8. Management Team: This is a key section that needs to show that you have the experience and skill-sets within your management team to deliver your proposition to the market.

9. Financial Plan: This is a summary of your financial projections, cash-flow highlights, breakeven, and investor proposition.

10. Appendices: This should include all the detail that you need to support your plan but would make the body of the plan too long if it were included. This will likely include detailed financial statements, management resumes, legal documents, letters of interest etc.

You should also remember that completeness and coherence are important. It won't matter how well written an investment plan if you have omitted to include how an investor will get a return (yes - it happens!) or your marketing plan doesn't address current trends in the market.

Finally, remember to emphasise the three critical elements - Market Need, Product to meet that need, and a Management Team able to deliver the plan.

Jon Hunt
Lead Consultant
The Business Plan Team
www.TheBusinessPlanTeam.co.uk

The Business Plan Team specialises in helping entrepreneurs, start-ups and growing businesses translate their vision into a coherent and executable business plan that can help secure funding and guide internal management. It provides a range of services from early feasibility studies through professional business plan development, to introductions to sources of funding. It is based in just outside Oxford, UK.