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There's a lot of debate on whether it’s useful to create a business plan or not. On one hand, the world is changing so fast that it seems pointless to create a business plan based on assumptions that can change in a couple of months. That plus the fact that you will invest time in creating this plan - time that you could be dedicating to something with a more direct impact to the business - make creating a business plan a questionable priority for any entrepreneur.
However, we’re strong advocates that it definitely helps make ideas clear and work on a strategy that makes sense for your business. Why? Simply because it gives you a clear vision of where to go and how to reach there. Having this vision clear is useful in a lot of scenarios, including convincing investors to fund your company or ensuring that your team is aligned with what’s in your head.
So without further delay, let’s get to it! Also, if you’re wondering, the difference between this article and the template you can download above is that in the template you actually get real content examples that you can re-use for your own document.
Business Plan - Table of Contents
- Executive Summary
- I. Problem and Solution
- II. Technology/ Product/ IP
- III. Business Model and Go to Market Strategy
- IV. Market
- V. Competition
- VI. Risks
- VII. Team
- VIII. Financial Projections and Funding Needs
- Exhibits
This structure is just an example, and you should adapt it to your business needs. More than anything, you should follow a storyline that works for the purpose of your business plan. Making it relevant is more important than writing down something for each of these topics.
Executive Summary
In one page max., what are the main highlights of the company? If it’s the case, what is the investment opportunity? Here are a few topics we like to see briefly covered at this point:
- Problem and solution
- Validation
- What’s been done so far
- Financing needs and investment goal
Here's a piece of advice: ideally, you should do the Executive Summary in the end - it will save you time as some of this content will likely change as you think through it in the next chapters.
I. Problem and Solution
What problem are you solving? How big is it? What are the current solutions that somehow solve that problem?
1.1. Problem
Describe your problem, properly quantifying the pain it generates to your potential users.
1.2. Alternative Solutions
Explain how potential users are solving that problem now, and why that’s not the best way to do it.
1.3. Solution and Value Proposition
Confront your solution with the problem, clearly stating what is its value and how it’s going to eliminate that problem once and for all.
1.4. Uniqueness
What is different about your solution? How exactly does it compare with alternative solutions available in the market today?
1.5. Vision
Although the business plan may be focused on a specific, more approachable part of the solution, if you think a bit further ahead, what would the world look like if your company actually fulfils all of its potential?
II. Technology / Product / IP
How was your solution built? What makes it different/ innovative? Is it suitable for Intellectual Property Protection? Although you’ve introduced the solution in the previous chapter, this is where you can give a little bit more detail on how it works, how innovative it may be or not, and in which ways that innovation brings value to its users.
2.1. Technology Description
Giving enough (but not too much) detail, this is where you specify how your technology works.
2.2. Current Stage
Do you have an operational MVP? Is this solution at idea-stage? Explain the stage your company is at and why, briefly mentioning any use cases and results that may be worth sharing.
2.3. Product Roadmap
Although you should leave the detailed version of this document for the exhibits, here you can give a brief overview of what main stages of this product / solution are ahead and what key milestones you expect to achieve with each one of them.
III. Business model and go-to-market strategy
How will you make money? What are the critical activities of your business? How will you acquire customers?
3.1. Revenue Model
Which revenue streams do you have now? How frequently are customers expected to purchase those products/ services?
3.2. Validation
Do you have any letters of intent from potential customers? How have you validated those revenue streams and which results have you achieved?
3.3. Potential Clients
Can you already specify one or more segments of potential users? What are the determinant traits of your customer personas and how do they differentiate from a broader pool of potential users?
3.4. Metrics
What is your go-to-market strategy and which key metrics or KPIs will you be looking at for each stage of it?
3.5. Expansion Plan
Do you have an idea of how you’ll expand your company? Will you go for geographical expansion, or will you remain in the same geographical market and expand through a variety of products or services?
There is a tool we recommend to help you think through some of the parts of a business plan that we have mentioned so far. It’s called canvanizer and it’s essentially an easier and digital way to complete a business model canvas without having to waste so many post-its.
IV. Market
What is the market dimension? Where will you start and why? What is your target and expansion strategy?
4.1. Total Available Market (TAM)
Total market on demand for a product or service, or the maximum amount of revenue a business can possibly generate by selling their product or service in a specific market.
4.2. Serviceable Available Market (SAM)
The segment of the TAM targeted by your products or services, and therefore a more realistic measure of how many customers would realistically benefit from buying your product or service.
4.3. Serviceable Obtainable Market (SOM)
The portion of SAM that you can realistically capture, i.e., an even more realistic part of the SAM that you can actually obtain with your current/ projected resources.
4.4. Market Growth
Is the market increasing, flat or decreasing? At which annual rate? Is there any event expected to happen in the near future that could change the dimension of this market abruptly, or any barriers for growth?
If this topic is something you need an extra help with, don't worry! We have an entire blog post dedicated to the TAM / SAM / SOM methodology.
V. Competition
Who are your competitors? What makes you different? Can you quantify those differences?
5.1. Current Competitors
Which players are worth mentioning and what is their positioning? How long have they been in the market for, which geographical markets are they available at and what have they achieved?
5.2. Comparison with our solution
Exactly how is your solution different and better from these competitors? You should identify which features/ benefits are more valued by potential users and consider including a comparison table clearly stating how you and your competitors position yourselves towards those components.
5.3. Barriers to Replicate
If there are differentiation factors worth paying for when comparing your solution with competitors, how difficult would it be for these same competitors to replicate those unique factors? What barriers will you have to avoid direct competition
VI. Risks
What could block your market entrance? Do you have any legal barriers? How do you overcome these risks?
6.1. Identified Risks
This is where to state which risks/ barriers you foresee for this business and/ or the go-to-market strategy mentioned above (e.g.: adoption risk; regulation).
6.2. Critical Success Factors
In the context of everything that’s being mentioned, what are the key factors of success that could make or break the progress of your company? Do you need a minimum number of partners to offer your services, for example?
6.3. Risk Mitigation
What are you going to do to mitigate the impact of the risks mentioned above? Is there any advantage you have regarding your competitors when facing these risks?
VII. Team
Who is going to execute this plan? Why are they the right people for the task? This is usually where you present your C team (e.g. CEO, COO, CTO… C Something Os) and any relevant advisors worth mentioning.
VIII. Financial projections and funding needs
How much investment is needed to make this plan a reality? How is it going to be used, i.e., which percentage is to fund marketing, HR, operating expenses, etc.? Has the company had any previous investment? If so, please give details on the amount, what it was used for and what results were achieved with it.
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Exhibits
Leave all the details for this part! Here are a few ideas of exhibits that could work for you:
- Market Details
- Product Roadmap
- Competitive Analysis
- Founders Team Short Résumé
- Financial Statements (you can generate your Income Statement for free using our software by clicking here)
Remember, all your exhibits should be mentioned in the main text above, referring to the part of the content that makes more sense for it.
