As Palo Alto Software embarks on the business plan competition season I thought I would write a quick post on the top 10 things that make a business plan “BUZZ WORTHY”:
#10: Know your market
Focus on the total addressable market, not the total potential market
#9: Pitch first. Plan Second.
Is there a “there, there?”
#8: Write for the right audience
Keep it simple – don’t write your bio tech plan as if everyone is an MD unless you are pitching to a specialized group of investors that are all MDs.
#7: Forecast. Don’t do accounting.
No one cars what your forecast is for the next 10 years in detail. No one wants minute details of expenses and depreciation. It’s a forecast not a tax return.
#6: Keep it short.
It is hard enough to get money period. Do you really think anyone wants to read your 50 page plan?
#5: Make realistic projections.
We can all make hockey stick forecasts. They look very pretty. But no one, not even you, believe them.
#4: Know your competition.
Yes, you do have some. EVERYONE has competition. If there are not similar products or services out there, but a NEED, then your competition is what people currently do to solve that need.
#3: Assemble a great team.
Most VC firms are going to fund a company based on the team before anything else. It’s the management team that will make or break a new company
#2: Don’t rely on patents.
Sure they look fancy, and they make your product or service seem unique. VC’s like them, Angels like them, banks like them. BUT they will not protect you from most things, and they are NOT the end all be all. Anyone can get beyond a patent. Coke’s formula is a trade secret that has been registered for over 100 years. Yet somehow Pepsi is still around…
#1: Write a bullet-proof executive summary
This is what most people will read. Many will never get beyond the Executive summary – especially if it is bad. You have one page to break it all down and tell your reader why this is interesting enough to turn the page.
-Sabrina Parsons, aka Mommy CEO