This is the first post from Asim Shehzad, He is an undergraduate student of Electronics Engineering at Ghulam Ishaq Khan Institute of Engineering Sciences and Technology, I welcome him into green and white and am excited that we have people in the community who can voice and present ideas on behalf of the student community. I am not editing on this post as this gives a great opportunity for the senior members of Green and White to analyze the beliefs and understanding of our Students hold their hand and guide them where their assumptions are in correct.
First develop business model from concept and then write your business plan. Before you model your business plan, first do brain storming, then develop financial model and embed this model in your business plan. Investors usually read financial ratios before they read body parts of business plan, so include investor analysis in your Business plan and executive summary. It is recommended to develop business model first, financial model second and business plan at end.
Second thing that Investors usually address are market risks. So we should accurately determine companyâ€™s strategic position in market and then write it in Business plan. If you fail to effectively communicate this part, Investors will not read other parts. This part is intensely scrutinized by VC firms.
Write your executive summary at end. Best sequence of paragraphs in executive summary is written below;
Company introduction(what value it offer),Market opportunity,Mission,Strategy to capture market opportunity, Financial forecasts of five years, amount and uses of funding required, Investor ratios( like Internal Rate of Return , Return on Assets ,Return on Equity),Exit strategy, Product strategy(how product will achieve desired results),Marketing strategy and Management profile.
In this section, describe following;
How and when company was founded? What are its current status, activities, and assets, particularly technical assets?
What is its Business model? And how business will make money.
Describe how you will achieve financial targets. Describe strategy that will help achieve claimed financial results within next five years. Include financial projections in that part of business plan.
First think and do brainstorming, then write following;
Where money is required to spend?
Write all uses of money in a column.
Describe use of this investment precisely and briefly in a paragraph.
Describe: Which results are expected from investment?
Describe following in precise and coherent way;
Retained Earnings Stockholder Equity.
Total Liabilities & Equity.
Use of Proceeds that may include following;
- Product Development
- Production & Inventory
- Marketing & Sales
- Capital Equipment
- Working Capital
- Total Investment
Highlight Investment ratios like company valuation, investorâ€™s return, performance ratios, summary of major parts of your business plan and expected results that you will achieve.
I am outlining some points to think about, before you write your business plan. You may need combination of two or more than two points.
Which opportunity you have identified? It could be unmet demands of customers, fear, tensions, confusion of customers etc. Describe this part in details. If some demands of customers are not fulfilled, then describe how these factors have affected customers. Describe your strategy to fulfill these demands. Describe attributes of your solution against each part of problem in a matrix form. Your technology or product should be correctly positioned to address this market opportunity. Reasons of its correct positioning could be cost-effectiveness, unique business model, superior document capabilities, enhanced appearance, powerful and unique technology and many more other things could fit here. Calculate market opportunity by calculating potential number of customers and revenue expected from these customers. Data must be supported by authentic resources like quarterly reports issued by consulting companies, economic and research reports published by well-recognized institutions, magazines.