The EIR Corner

Business plan content should fully convey your message in an organized and logical manner and there are many examples of what topics should be included. The purpose of this article is to review a few areas that are often overlooked or incorrect.

Deemphasizing the Product - While your “product” is a factor in investment decisions, it should never dominate your message. It is much more important to show how it satisfies a large and unfulfilled need within your target market and how you will effectively reach those potential customers.

Market Size – Saying you only need 1% of a $100 billion market may sound impressive, but it’s unrealistic. Defining a credible target market, and building a plan to capture a reasonable percentage, is more powerful and believable.

Peripheral Competition - The competition is not just companies currently in your space, but companies outside of your market capable of quickly reacting to opportunities. To ensure a thorough evaluation, include existing and potential players, and a description of your plans to create and maintain competitive barriers.

Risk Analysis - It may not seem like a great idea to talk about risks, but by showing you have identified potential threats and developed plans to mitigate them, you can reduce investor anxiety up front. Examine risks in your market, technology, regulations, operations and management.

Co-Stars - In addition to the direct members of your team, be certain to discuss your strategic partners, advisory board members, legal advisors and all other important contributors. You should also identify additional talent you require and your plans to bring them onboard.

Hockey Sticks - If you show revenues growing slowly at first, but then jumping suddenly and dramatically in later years, your assumptions may be suspect. Your three to five year high-level projection of revenue growth, profits and cash flows, must be well-reasoned, consistent and realistic.