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Jan
18

8 Key Components of A Business Plan as Told by Real Venture Capitalists

A Business plan not just paves the path for a successful business venture but also helps fetch expert consultation, mentoring, and funding from leading Venture Capitalists and industry thought leaders. A B-Plan is a blueprint of an impactful business idea. At Meraki, FIIB’s annual B-Plan competition that provides platform for innovative entrepreneurs,  esteemed judges Mr. Manish Kheterpal Co-Founder, Waterbridge Ventures,  Ex-Director-  Providence Equity Partners, Vishal Dixit – Partner, MF Advisors, Mayfield Ventures, Mr. Amit Khosla Managing Director, AsiaBridge Capital, Mr. Anshoo Sharma – Co-Founder and CEO, Magicpin, and Mr. Sarbvir Singh – Managing Partner, Waterbridge Ventures, an effective B-Plan captures critical factors that helps a VC decide if it’s wise to invest in the venture. Speaking about the specifics of the plan, they said “We look for functional prototypes and scalability of the product, some of the most important aspects B-Plans are judged on are:

Executive Summary

An executive summary is a document that summarizes the entire purpose behind formulation of a business plan. The executive summary is essential in providing justification on What, Why and How an idea to be shaped into a full-fledged business model. The document will simply provides a glimpse the into whether the investors should be more interested in knowing about the plan further. The document should grab the attention of potential investors. In other words, the document should entail the core components of the proposed business idea, which reflects upon the realistically executable concepts in order to implement the business idea.

which problem the entrepreneur is trying to address or what business offerings or services are directly linked with the problems in the society.

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Business Description

Business description is a document mentioning detailed facts and information about the new venture or idea of a business. The document would elaborate all necessary details pertaining to the business which an investor seeks to understand his interest about extending the funding and support. The document would definitely consist of all elements that define the entire functioning of a new venture idea along with strategies to overcome failures in encountered while operating the business. The document should be prepared with utmost sincerity and consciousness.

Marketing potential and strategy

To fully explain the market understanding and demonstrate advanced market research conducted to cope with the new challenges. More than the information of existing trends and concepts in the market, the proposed solutions to counter such challenges should be emphasised within this document. A detailed analysis and assessment on the sector within the market, which the business is aiming to penetrate should be carried in order to project the effective target strategy, offerings defined by customer preferences, innovative techniques and success strategy. The document should appropriately explain about the market size along with a in-depth comparative study on the competitors existing in the market. The document highlight the USP of the proposed business in comparison to the offerings by the competitors. It should also importantly forecast the demand and supply volume to meet the needs of business as well as the pricing, promotion, distribution of the product.

Operations

The document should give out the important information pertaining to the technical, operational and logistical requirements to run the business. The information should suitably explain how the entire operational strategy can be made seamless ensuring the flow of the operations and functions within an organisation.

Financial Projections

The document on financial projections should be a detailed document that should specifically and strictly be prepared with a sharp focus on Cash flows, income statement, break-even analysis, funding needs and sources. This should clearly inform about the balance sheets, past financials if applicable, financial projections for 12 months, income and expenses. The section may also state the startup cost and capital requirement, funding or banking assistance.

Management Team

Just like the other important components, this document would most importantly explain about the management structure within the proposed business. The document should give out the complete information about the management force and the expertise of the appointed superior professionals. The emphasis should be more on the strengths of the supervising body comprising owners, shareholders, and investors. The focus should also be on the talent acquisition ability of the senior professionals and managers who plays a vital role in selection of highly skilled workforce in an organisation.

Risks and Opportunities

To express that considerable thought has been given to the pros and cons for the successful establishment of the business, this document should absolutely be prepared incorporating all major and minor aspects that poses serious damaging threat to the business. While producing this document, each risks that is predictable should be given the highest priority with most importantly the problem-solving methods to deal with the complexities and challenges. With special emphasis on the key risks factors, the document should highlight the opportunities along with the sustainable competitive advantage. Apart from that, the future plans to enable successful formation of a new business should be stressed mainly within this document.

Milestones set and achieved

In relation to the milestones and achievements, another document listing the major priorities and challenges along with achieved outcomes should be prepared. This document would act as an overview for the proposed business goals and objectives of the business. The document should particularly explain the past effective success strategies which is expected to be beneficial to drive the business towards the success. To conclude with all the plans, this document should given the highest priority, attention, and deliberations. The document should serve as an overview substantiating the proposed business formation strategy and should also suggest what new challenges and risks are presumably expected in the near future.

These broad sub heads give a skeleton to a well rounded business plan. These pointers not only help you understand your business well but also can help you win funding. If you are an entrepreneur and are looking for funding, register on Meraki (http://meraki.fiib.edu.in) and give your business plan the stage you deserve. All the best for your venture!