The Business Plan

The Pitch Deck is NOT a Business Plan

Before you start on your pitch deck, it’s important to have a working version of your Business Plan. The Business Plan overviews your business, describing what you’re doing and how you’re doing it.  It will require you record and collect comprehensive information on your business as you’re growing it. Keeping an internal working version can be valuable in helping you maintain focus. You may need a more polished version for things like securing a loan from a bank. Often investors will ask for your Executive Summary, a one-page summary of the Business Plan.

If you haven’t started a business plan yet, build out a new document to house data and notes as you research and grow your business.

The Business Plan

Mission, Purpose & Core Values

Here is where you share your big-picture reason for being in business. This is the greater impact you will have on the world. Your core values share your most important focuses, typically a list of words or phrases that describe your company’s ideal persona and help to define the brand and culture, for example: honesty, quality, and communication. This section should paint the picture of who you are as a company.

Product Description

An overview of what it is that you’re selling, how you make it, how you deliver it, any intellectual property you own that goes along with it, and anything operationally you feel should be known. What makes yours unique?

Market Analysis

Gather and analyze information related to your target market (the group of people you think will purchase your product/become a user) to gain insight into how to reach them. Here you’ll designate whether you’re B2B (Business to Business) or B2C (Business to Consumer). Your market analysis should summarize the size and potential of your target market, describe current market trends, and overview demographic information (age, gender, income, etc) and psychographic characteristics (interest, values, personality, etc) that define why they are the ideal customer.  When starting out, create a table of all potential target markets and stay organized with the information you collect. Understanding who will buy your product and what motivates them to buy is the foundation for creating an informed and effective marketing strategy. Most of this information will have to be found internally by your firm by doing research of your past customers. If you are a new firm who doesn’t have any history yet, try finding the answers to these questions by contacting either a firm that is similar to yours, or a trade association related to your industry.

Industry Analysis

A snapshot of the current conditions of an industry. Consider economic, political, environmental, etc. factors.  Is it growing? Saturated? How big is it and what does it look like? An Industry Analysis provides businesses with a comprehensive understanding of the market conditions, competitive landscape, and trends within a specific industry. It helps inform business decisions, strategy formulation, market entry, and identifying opportunities for growth and differentiation. By staying informed about the industry’s dynamics and adapting to changing market conditions, businesses can position themselves for success within their industry.

Competitive Analysis

This is an assessment of the differences between your business and your competition, and should enable you to create a chart to show how you’re different. How is your audience currently being served? Who are the major players? Direct competitors are those that sell a similar product to the same target customers as your business, while an indirect competitor is any company whose product could be a substitute for yours. Consider non-tech substitutes consumers might be used to. Once you’re clear on what the competition has to offer, this analysis of what unique advantages will benefit your company and what barriers to entry your company may have, such as technology, capital investment, real estate, facilities, or legal regulations. A strong Competitive Analysis will reveal your company’s true position within the market. Your competition can be one of your greatest sources of new ideas when starting a business. There is no need to reinvent the wheel. The successful companies in your industry have figured out what works best through years of testing and copying what works. It can only be beneficial for you to examine your competitors thoroughly in an attempt to gain insight into what is really working in your particular industry.

Marketing Plan

Share how you plan to get your product to reach your potential customers and execute the transaction. The Marketing Plan includes sales goals, marketing goals, and creating a detailed sales forecast that shows how you will reach your goals. Summarize your market position, and create a list of your company’s strengths, weaknesses, opportunities, and threats. Your Marketing Plan should also include your branding strategy, a list of distribution channels, a pricing and marketing strategy, and a customer service plan. A few questions to ask yourself: Is your budget large enough to fund your marketing strategies? Is your sales forecast calculated realistically? Are your sales and marketing goals attainable?

Operations Plan

This section explains how you’re going to get your product or service to market. As an internal working document, this should get in depth on how you plan to get the product from production to your customer. Describe how long it will take, what suppliers you’ll use, how it’s delivered, your backup plans, quality control measures, and how you plan to stay current. The Operations Plan can act as a guide book on inventory management and purchasing procedures, and some feel it can be a predictor of a company’s success.

Management Team

This section can paint the picture of your company’s corporate culture. Begin developing your Management Team section with an objective assessment of the company’s requirements. When starting out, it’s likely your team will comprise of key management, Board of Advisors, Board of Directors, and professional service providers. A resume for each key team member can be added in the appendices of the business plan. The quality of the people employed determines the success of your business. Many ventures fail because the talent wasn’t assembled. Someone with a strong technical background might ignore the importance of having someone with a business background, and vice versa.
If you are preparing your business plan for financing purposes, you need to take particular care in crafting your Management Team section. Internally, make an accurate evaluation of your team’s strengths and weaknesses to identify holes and redundancies.

Financial Projections

Your financial projections give you an idea of how your business should be doing at any moment in time. These numbers should back up everything you say you’re doing. Build a profit loss statement, balance sheet, and cash flow statements for the next three years. Be conservative and realistic. You may have to get creative to find good data for your financial projections, but anything solid that you do find will benefit you immensely when it is time to make realistic projections about the future.

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The Business Plan will act as a roadmap and accountability tool to keep your day-to-day operations in line with the overall business goal. Ideally, you have a cohesive strategy to take you through the first 3-5 years of operation. As an entrepreneur, you’ll learn a tremendous amount, like improving processes for efficiency, adjusting for your market, expanding and refining your network, and managing your data. Your Business Plan  will and should continue to evolve. Keep your strategies fresh!

Key points from the Business Plan will be pulled out and used in your pitch.