A business plan is not just a document; it’s a roadmap for your company, guiding business owners and setting investor expectations. It answers two key questions: “What valuable product or service will the company provide?” and “How will it deliver these goods or services profitably?””

The Foundation: Unique Value Proposition

The core of a compelling business plan is the startup’s unique value proposition. It should explain the startup’s product or service, the target customer, and the competitive advantage.

Lean or Traditional Business Model

Next, the startup should decide whether to create a lean or traditional business model. For VC pitches, a lean business presentation focusing on key elements may be more effective. For more formal investor meetings, a traditional business model that delves into the details is more suitable.

The starting point of a good business plan is the startup’s unique value proposition. This is a one or two-line statement that explains: a startup’s product or service; the target customer; and the competitive advantage that the startup has in the market. While a startup’s managers can usually describe their product in detail, it is important to consider one’s customers and competitive advantage carefully. It may be worthwhile to do some preliminary marketing analysis in order to understand the details of the proposition statement.

What Investors Look For

Investors are keen to evaluate several aspects of the business plan:

• Customer Segments: Investors want to see a clear understanding of the target market. For example, a tech startup might target millennials who are tech-savvy and value convenience.
• Revenue Streams: Investors look for a clear plan on how the business will generate income. For instance, a SaaS business might generate revenue through subscription fees.
• Financial Projections: Investors need to see realistic financial projections. For example, a startup might project a 20% increase in sales after launching a new product.
• Competitive Advantage: Investors want to know what sets the startup apart. For example, a restaurant might have a unique farm-to-table concept that sets it apart from competitors.
• Management Team: Investors want to see a competent team leading the company. For example, a biotech startup might have a team with extensive experience in medical research and product development.

Together, the startup and investor can mutually benefit from a well thought-out business plan.

Tips for Writing a Business Plan

No matter which type of business plan you choose, here are some useful tips:

• Be Concise: Make your business plan as clear and direct as possible.
• Be Realistic: Make sure your financial and sales projections are achievable.
• Be Flexible: Your business plan should be able to adapt to changes in the market.
• Be Thorough: Make sure to include all the necessary details about your business.

Remember, a business plan is a living document that should evolve as your business grows.

This post was written by Jeffrey Camp