One of the most common Business Consulting tasks that we are asked to do is to create Business Plans. As many advisors are purists in their field, we would like to think that the creation of Business Plans is so that companies and their managers are well equipped with a roadmap from obscurity to wild success; but that is rarely the case as most Business Plans are created for one thing and one thing only…..to raise money! After years of fighting this reality we have finally decided to give in and we, of course have helped many businesses raise the money they need either for starting or expanding their companies. So if you need a business plan for the purpose of raising money, here is a list of the items that must be covered to make sure you have the best chance to raise the money you need.
1. What is the company?
- What is the name and legal status of the company?
- Where is it located?
- How long has it been in existence?
- Is the company public or private?
- Who are the shareholders?
- If public, then what is the share structure?
2. What do we have to offer?
- What specifically is the product or service that the company will be selling?
- Who are the customers for these products or services?
3. What is our unique value proposition?
- What will set us apart from all the other competitors in this field?
- How are we different?
- What would keep someone else from doing what we do?
4. What is the market Landscape?
- What is the market potential for what we have to offer?
- Is our plan only domestic or is their global potential?
- How large specifically is the market?
- Is our product replacing something that is already being used or is it a disruptive, ground breaking idea?
5. What is the competitive Landscape?
- How much competition is there in this market?
- Who are the top 5 competitors?
- Why are they the leaders?
- For each of these 5:
- How large are they?
- Where are they located?
- How many years to achieve their status?
- What is unique about each?
- How does their pricing and offerings compare?
- What is their marketing strategy?
6. What is our Go to Market Strategy?
- What is our Sales and Marketing strategy?
7. What success have we had to date?
- Have we sold anything yet?
- How many?
- What has been customer reaction to the product?
8. What customers currently use our products or services?
- How many customers?
- Any customers that investors would recognize?
9. Past Financials
- If the company has been in existence then the last three years of financial statements should be included.
10. Financial Projections
- A realistic set of projected financial performance documents for 3-5 years.
- We like to include:
- Use of proceeds
- Profit & Loss
- Balance Sheet
- Cash Flow
- and key business ratios
11. What do we need?
- How much money do we need ?
- Why?
- How specifically will the money be used and how will that translate into the performance stated in the projections?
12. What obstacles and risks are involved in our plan?
- What could go wrong as we execute our plans?
13. What’s in it for the money?
- For banks and lenders, the plan and the projections should clearly demonstrate how the money will be paid back.
- For investors, the plan should detail and plans for any payback, dividends and the ultimate exit strategy. It should be clear to investors what they will get back as an ROI for their investment.
