Help to Develop your Business Plan
Below are guidelines to help you develop your business plan.A business plan is a key document which outlines your business, how it intends to find a market and generate revenue. Many investors, financial organizations and incubators expect one. Producing your first business plan can intimidating – but the Venture Fund process will give you guidance. We suggest a process to clarify your ideas – using the ‘lean startup’ process as a starting point. You can access free materials from Strategyser.com, and attend our workshop sessions to develop your idea and receive feedback – a useful process even if you don’t receive funding.
The first step is to define who your initial target customer is, and define the problem you solve for them. You can download the ‘The Value Proposition Canvas’ to help with the process and find instructional videos on how to make use of it. We will use this in our workshops to help you establish your idea.
Once you understand your first customer you can develop a ‘Business Model Canvas’. There are plenty of materials to help you understand this and we will workshop the idea again. We will also discuss how to develop your initial financial targets and forecasts.
From the workshops your will have feedback on your ideas sufficient to develop a business plan. The outline of the plan is below:
Basic Idea (600 word limit)
- Outline what the product or service is, what the price of the product is, and what sorts of customers are likely to buy it. You might not want or need to include every product or service, but at least consider the main sales lines.
- Avoid technical jargon, instead describe the business for the average reader. Get a friend who knows nothing about the business to read this section and comment on its clarity. If the reader does not have a clear idea of what you intend to do, then the rest of the plan will not make the impression you are seeking.
- You might consider creating a “mantra” or a single phrase that describes and defines your business, as recommended by Guy Kawasaki, author of Art of the Start.
Opportunity and Market (600 word limit)
- Clearly describe the need that your new product or service will fill. Ideas for solving needs can come from various sources:
- personal experience of a need you have
- experience of a company that does not meet a particular customer need
- your knowledge of a new technology that could create a revolutionary new product
- your belief that there has got to be a better way of doing something.
- (For more details on where ideas come from see Guy Kawasaki, Art of the Start.)
- Describe your typical customer – age, gender, annual income, location.
- Explain why your customer will buy from you (and how much they will pay). Also known as the value proposition, this is what makes your business different from all others.
- How will reaching your first customers provide a springboard to additional customers?
Competitive Strategy (600 word limit)
- How is your product or service different from or better than the competition?
- Do not fall into the trap of saying “we have no competition”. If you are indeed lucky enough not to have any direct competitors (very unlikely) then you will still be competing for the disposable dollar.
- Describe the important competitive features of your product or service. What do you offer, at what price, to whom, and how does your mix compare to others? Do you offer better features, price, quality, service, or some other factor?
Capabilities and Resources (600 word limit)
- One of the strongest factors for success in any growth company is the ability and track record of its owner/management, so describe the key people in your company and their backgrounds. Provide curricula vitae, in an appendix, that include the following information:
- Proposed Position (include responsibilities and authorities)
- Experience and skills
- Prior employment
- Industry recognition
- Describe how each person's unique experience will contribute to the success of your business and how you intend to retain them. Highlight how the skills of team members complement each other.
- In addition to people, there may be a key resource such as a particular technology or an alliance with another organisation that is vital for the new business. Describe this and show how it is, or will be, secured for the new business.
- Later you can even indicate missing resources – remember the seed funding could help you obtain some or part of these.
Making a Start – Financial Planning (600 word limit)
- How will you reach your first customers? What do you need to make a start with your business? Discuss capital (amounts and when required), office space, help and advice, contacts, mentoring.
- Describe the expenses you are likely to incur in setting up your business. Your expenses are a finite list of estimable items such as rent, insurance, payroll, and so on. Be sure to note how you arrived at these estimates.
- In addition to start-up expenses and possible revenue, you will need to estimate other financial information. Cash flow is the single most important numerical analysis in a plan, and should be included. Most plans will also have Sales Forecast and Profit and Loss statements. These financial forecasts are best displayed in tables in an appendix and important insights from these financial forecasts can be discussed briefly in this section of the text.
You will receive feedback on your business plan, and have a chance to redevelop it for the full business plan. You may need to ‘pivot’, which means change some of your assumptions, ie. Feedback may suggest you focus on a different market or customer group, and change some of the specifications of your idea. Learning this iterative process is invaluable to entrepreneurs.
The above guide mentions including curricula vitae and financial forecasts in appendices. Experts encourage the inclusion of a projected Balance Sheet, projected Business Ratios, and Market Analysis tables. What gets included in an appendix will be a function of what you want to do and what you envision for your business.
See the following books and websites for useful information:
Kawasaki, G. (2014). The Art of the Start 2.0 New York: Penguin Group.
Blank, Steve “Business plan not working? Time to pivot,” available at http://venturebeat.com/2010/04/14/business-plan-not-working-time-to-pivot/
Boyett, J.H. & Boyett, J.T. (2001). The Guru Guide to Entrepreneurship. New York: John
Ries, Eric “Pivot, don't jump to a new vision,” available at http://www.startuplessonslearned.com/2009/06/pivot-dont-jump-to-new-vision.html
Last updated: 04-Apr-2016 3.43pm
The information on this page was correct at time of publication. For a comprehensive overview of AUT qualifications, please refer to the Academic Calendar.