8swellstrategies

Business Plans for Startup Entrepreneurs

Virginia GinsburgPresident & Chief Consultant

Swell Strategieswww.swellstrategies.com

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Developing a business plan for your entrepreneurial business can be an overwhelming nightmare.

Business Plans: Nightmare???

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But a business plan is essential for these reasons:

• Developing your idea

• Raising money

• Building your business

Business Plan: Opportunity

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You need a series of tools to pitch your business:

• Elevator pitch 1 sentence

• Short pitch 1-3 paragraphs

• Executive summary1-3 page

document

• PowerPoint 10-20 page

overview

Business Plan: Formats

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Your extended business plan needs to cover the following elements:

• The Problem• Your Product• Your Market• Your Process• Customer Acquisition• Your Team• Financial Plan• Use of Funds

Business Plan: Elements

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The first step in building your business plan is to define the problem you are solving. • A great product is not a

business unless it solves a problem

• The problem doesn’t need to be huge, but it does need to be well-defined

• Reference “The Innovator’s Dilemma” if necessary

Business Plan: Define The Problem

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Established, successful companies tend to over-focus on their existing customers’ current needs, and therefore fail to recognize new market opportunities because they appear small and insignificant.

This is a huge opportunity for entrepreneurs and has transformed industries including personal computers, milkshakes and steel.

Business Plan: Define The Problem

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Once you have established a clear problem, you need to define your product. • What is it?• Why is it

different/special?• Who will use it?• How much will it cost

to make?• How much will you

charge for it?• How will customers pay

you?

Business Plan: Define Your Product

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You need to know more about your market as a whole and your specific competitors than anyone else.

There is a good chance that during fundraising you will meet someone who knows your segment well enough to challenge you on your knowledge - don't let them catch you with your pants down!

Business Plan: Define Your Market

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You need to tell investors how you are going to operate your business.

• What is required to build and deliver your product?

• How will you build your product?

• How will you deliver your product?

Business Plan: Define Your Process

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Your idea is just a concept until you acquire customers.

Many entrepreneurs fail to clearly define how they will acquire customers.

The more specific you can be about customer acquisition, the more likely you are to get funded (and be successful).

Business Plan: Customer Acquisition

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In any startup, your team is the actual investment.

No matter how good your idea is, investors know that the people who will execute your plan are the most important success factor.

Tell them why your team is the best team for the job.

Business Plan: Your Team

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Your Financial Model explains how money flows into and out of your business. Include:

1. Expenses: COGS, labor, rent, marketing, technology, etc.

2. Revenue (divided into different streams)

3. Breakeven Point4. Profitability

Business Plan: Financial Model

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Investors want to know how their investment is going to be used to catapult the company forward.

They want to see a direct path to the next stage of your success as a result of their investment.

Business Plan: Use of Funds

This is not what you want investors to imagine you doing with their money.

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Good Luck!Virginia Ginsburg

President & Chief Consultant Swell Strategies

www.swellstrategies.com