Inside of the Entrepreneur’s Business Plan
Although many action-oriented entrepreneurs will not feel the need to create a business plan, any entrepreneur seeking funding from outside sources, such as accredited investors, angel investors, venture capitalists, and even banks, will need one. All of these investors will ask to look at a full plan before considering funding.
Creation of a plan causes the entrepreneur to think through all the details and plan for all the details that will be needed to get a new company off the ground. The process of writing the plan is often more valuable than the plan itself, which should be considered a living document that is never really complete. Things are constantly changing, and the same is true of your business plan—it should be updated regularly.
There are several different outlines for business plans. The most essential elements to an investor whom you are targeting are as follows:
- What is the need in the marketplace?
- What is your solution to this need?
- How large is the market that this product or service will serve?
- Who is on the team that will carry this out?
- What is the return on investment going to be and when will it come in?
A more full business plan would include the following:
- Cover letter
- Executive summary
- Company description
- Industry analysis and trends
- Target market
- Strategic position and risk
- Marketing and sales plan
- Technology plan
- Management and organization
- Community involvement and social responsibility
- Milestones and exit plan
- Financials Business Plans and Business Cases
- Income statement – 3-year projections
- Income statement annual
- Cash flow projection
- Balance sheet
- Sources and uses of funds
- Assumption sheet
Business Case for the Intrapreneur
Intrapreneurs who are championing new ideas will also need a formal business case. This has many similarities to the business plan, but it is targeted at the internal management and decision makers of the company. Do not skip creating a business case around your idea before taking it to management or your boss. If it does not make business sense, you will not get approval.
Build a strong case for your proposal, looking at it from several different angles and answering questions that are likely to be raised. Next, quietly put together research and data to back up the case you will make for this new creation that you want to bring to market. Your passion for the project will be much more powerful when you are able to answer the tough questions and show that you know what you are doing.
A good case will ultimately cover the product idea, the market and timing to market, the necessary team to pull off the project, costs and resources needed from the company, a project timeline, and projected revenue of what the product will make, culminating in what the potential return on investment might be for the project. The bottom line is always profit. If you can show that embarking in a new direction will create significant momentum and new income for the company, you may be given the resources needed to work on the idea.
Be smart and be encouraged,