1. Comprehensive Business Plan Guide
Presented By

2. “Writing a Business Plan forces you into disciplined thinking, if you do an intellectually honest job. An idea may sound great, but when you put down all the details and numbers, it may fall apart”
Eugene Kleiner, Venture Capitalist

3. Table of Contents

4. What is a Business Plan?
A Business Plan is the most preferred route of communication between Entrepreneurs/Management of a organization with potential Investors.
It is an indispensable tool to plan the organizations goals and objectives and direct activities to achieve them.
A document that demonstrates the ability of the business to operate efficiently, effectively and productively to make a satisfactory profit and be attractive to potential backers.
Most importantly, a business plan is a document that sells your VISION, and opening the door to investors.

5. Reason for writing a Business Plan
BIG IDEA! Put pen to paper.
To help you understand an opportunity and how to exploit it.
To re-focus a business following start-up.
Motivate and focus the management team.
Attract key employees.
Obtain large contracts.
Obtain bank financing.
Obtain investment / growth funds from investors.
Arrange the most suitable strategic alliances.
Complete Mergers & Acquistions.

6. Business Idea Generation
Where does the Business Plan fit in?
Established company
Growth
Entry to
Capital Market
Business Start Up
Financing decision – Strategic Investors/VC’s
Business Idea Generation
BUSINESS PLAN
Interest of Angel Investors

7. Time Horizon
It takes at least days to prepare a Business Plan after all Market & Business Information such as financials, management information is received.
Funding Raising itself takes anywhere between 2- 6 months to complete, from the first meeting to close.

8. Points to keep in mind The Full length Business Plan 10 - 50 pages
The Executive Summary:
up to 2 pages
The Summary Business Plan
up to 10 pages
The Operational Detailed Business Plan
pages
Subject matter should have graphs and pictures
Allied material should go to the appendix

9. What should be the Contents?
Cover Page
Executive Summary
Company Overview
Market Overview
Strategic Overview
Financial Overview
Use Of Proceeds
Current Offering

10. Contents of a Business Plan
Executive Summary
A Good summary
Captures the reader’s interest and imagination
Conveys a clear picture of what you are trying to do
Highlights the salient features of the proposition
Establishes the Management’s credentials at the outset
Encapsulates Financial Opportunity & Key projection
And thus persuades the reader to keep reading !

11. Contents of a Business Plan
Company Overview
The Industry & its Size (Historical,Current,In 5 years)
The Company (Vision, Mission, Objectives)
Founders and their brief profiles
The Products / Services
Funding till date and funds sought
Overview of Service and Value proposition

12. Understand what stage your company is at and what exactly is your need
Company Lifecycle
Understand what stage your company is at and what exactly is your need
The Chasm
The Wall
Strategic Investors /
Venture Capital
Capital Market
Angel
Investors / Founders
IPO
Early
Stage
Start Up/Seed Capital
Later Stage
Secondary
Offerings
Mezzanine
Revenue C B A
Time
Idea Generation
Testing
Start-up/Seed Capital: Market research and product development.
Early Stage: Funding full-scale operations and selling products/services. Not yet profitable.
Later Stage: Funding expansion and new products. Near break-even.

13. Contents of a Business Plan
Company Overview
Management overview
Profile of Key Management
What are the core competencies of each team member?
What value addition does each bring to the company/project?
Do not hesitate to explain their relevant industry experience, skills, achievements and track records.
What are the gaps in the team and how would you fill them?
Use all opportunity in the plan to highlight the ability of your team to pursue any venture

14. Contents of a Business Plan Contents
Market Overview
Market need & opportunity -
What unfulfilled need the product satisfies?
What is the gap in the market that can be exploited?
Define and quantify the opportunity - future and complementary market
Target Customers and demographics
Market size & analysis
Market Size & Growth rate
Is it a new market, growth market, or established market
Current market share

15. Contents of a Business Plan Contents
Market Overview
Competitor analysis
Overview of landscape
Point of differentiation of product/offering as compared to competitor
Substitute products
How the dynamics of competition might evolve over time in terms of price, margin erosion, etc.
How existing competitors are likely to respond to your market entry
Other potential entrants to the market and SWOT analysis
BARRIERS TO ENTRY
Be thorough – leave no stone unturned

16. Contents of a Business Plan
Strategic Overview
Summarize your GO TO MARKET strategy
Define with respect to the 4 P’s – Product, Pricing, Place and Promotion Mix, 7 P‘s for service offerings.
Lay out the design and development plans
Development status and tasks
Difficulties and Risks
Product improvement and New products
Costs
Chalk out the Revenue channels
Chalk out Revenue Models
List the key customers

17. Contents of a Business Plan
Financial Overview
Provide 5 Year Projections
ALL KEY ASSUMPTIONS SHOULD BE STATED OUT CLEARLY
Provide the Revenue Projections (top line)
Financial projection of related expenses
Financial projections of Balance Sheet
Create Pro forma cash flows Statements + Analysis
Provide Breakeven chart
BE PREPARED TO EXPLAIN NUMBERS – Investors will “drill down“

18. Contents of a Business Plan Contents
Financial Overview : Break Even Analysis
Break Even Point is that point at which sales value, sales volume or production makes no profit or loss. This is the level at which all costs are covered, leaving Nil profits or losses.
Break even analysis is a mathematical model that provides answers to many important questions. e.g. (1) If prices increase by 5%, what is the effect on profits? (2) If Fixed Cost decrease by 10%, what happens to the break-even point? (3) If Fixed Cost decrease by 10% prices increase by 5% and you want to increase profits at the rate of 10% how many units must you sell?
Variable Costs: Costs that vary directly with number of units sold; they include materials plus labour plus a percentage of overhead directly allocated to the sale of a given number of units.

19. Selling Price (Per Unit) – Variable Cost (Per Unit)
Contents of a Business Plan
Fixed Cost: Costs that remain unchanged with the number of units sold; they include rent, utilities, insurance, salaries, etc.
Total costs: Variable costs plus fixed costs.
Selling price per unit
Break Even Point (units) :
= Total Fixed Cost
Selling Price (Per Unit) – Variable Cost (Per Unit)
= Selling Price (in Rs/ $) * Break Even Point (In Units)
Break Even Point (in Rupees / Dollars)

20. Financial Overview : Format for Developing Cash Flows

21. Contents of a Business Plan Contents
Financial Overview
RISK FACTORS
Define the key risk factors
What steps have you undertaken and your plans to combat them in future
Project the possible “UPSIDES“ and “DOWNSIDES“
Provide a sensitivity analysis - what if situations.

22. Contents of a Business Plan
Use of Proceeds
Describe the funding sought
Define the need: Plant, premises, technology, staff, research and development
Detail the usage and stages of fund infusion required
Show the fund utilisation for the projected tenure
Define the milestones
What are the key success factors
What would be the key milestones against which funds would be drawn
Clearly map the risk reduction matrices

23. Contents of a Business Plan
Current Offerings
Valuation Define the basis for valuation
BE PREPARED to justify the same by reference to Industry standards, recent market deals and the tempo of the stock markets.
Are there any special factors that drive up the valuation, e.g. – Management, technology, orders in hand, brand strength
What percentage of the company are you offering
What is the current capital structure
What is the securities that you can offer
What are the planned exit routes for investors / Company

24. FAQ’s While Writing Business Plans

25. FAQ’s for making a Business Plan
Why do I need a business plan?
A business plan is often the entry-level requirement to getting investor capital or bank loans.
How many pages is the typical business plan?
The length of a typical business plan can greatly vary from a 10 page to a 50 page document. Key is to keep it short simple and yet concise.
What ‘tone’ should the plan have? Keep the tone of your business plan factual.
Don't use generalizations to describe the Business potential. Investors and lenders use the factual information you present to reach their own conclusions

26. FAQ’s for making a Business Plan
Are extensively detailed plans better? Keep your plan succinct. People tend to use too much detail when creating plans. Details could be added in a separate section called “Appendix”
How technical should the Business Plan be?
Do not make extensive use of Jargon – as that presumes that audience members are experts in your field.
Also too much technical details distracts from the main overall focus.

27. FAQ’s for making a Business Plan
How much money do you need?
More than you think, less might be offered. Taking too much money dilutes the stock. Be realistic – raise sufficient cash to last for 2 to 3 years and resist the temptation to sell out early.
How to benchmark costs & profits? Get data for firms in your field or industry association. Compare the numbers with firms of
similar size in the same industry.

28. FAQ’s for making a Business Plan
How detailed should budgets be? Budgets must highlight all financial aspects in a Budget Summary and have supporting details available
Which pro forma is most important? Cash flow would be the key. It is nice to project a profit, but if you run out of cash, your business will be dead, so keep your projection updated.
However due importance must be given to the Balance Sheets as well as P&L Accounts

29. FAQ’s for making a Business Plan
Should I hire an expert to prepare the financials? A potential lender or equity investor wants to see not only that the numbers look good, but also that you understand them inside and out.
Be a major decision maker in the preparation of your financials but look for professional help with respect to creation, presentation and negotiations.
This is because Professionals / Advisors/ Consultants possess the expertise required in putting together a Winning Business Plan

30. How does a Consultant / Advisor help?
Advisors help you to create a robust Business plan, which will be concise and yet comprehensive, and can convey the BIG PICTURE and your COMPANY POTENTIAL to the prospective audience. And also help with respect to creation, presentation and negotiations.
They guide you extensively to pitch your Business Plan to VC’s Private Equity, HNI’s as well as Strategic Investors
Consultants additionally help you to streamline your organizations operations, so as to successfully implement the BIG IDEA

31. What to look for when Recruiting Business Plan Consultants?
Be selective
Look for experience
Look for diversified skill sets
Clearly articulate your expectations
Demand active involvement
Also assistance to help build & run the company can be sought

32. Commonly Made Mistakes

33. Commonly Made Mistakes
Procrastination :- Delay
Too Much Information
Hiding Weaknesses
No clear business model
No real Assessment of Risks
Financial Projections
Hockey-stick shaped growth projections
Generalized Market Size
The Big Deal
Distribution Channels
Competitor Analysis

34. Commonly Made Mistakes
Procrastination: Many business owners under estimate the time & effort required to write a business plan. Don't delay. If your organization is not functioning as desired or you need capital in six months, now is the time to put it together
Too Much Information: Objective is to focus on key elements of the plan & make your case as succinct as possible. Pages of detailed information can be put in an Appendix and referenced when required.
Hiding Weaknesses: Most Business plan writers think
Why draw unnecessary attention to negative aspects
If we ignore the weaknesses, they may go away
Once we get funding, we can deal with the problematic areas
What investors don't know won't hurt them
If there is a weakness in your business model or Plan the savvy investor will find it within minutes. Once this blunder is uncovered it is obvious that you haven't been completely forth-right.

35. Commonly Made Mistakes
No clear business model: You may have an idea but the business model that you would be following needs to be explained in clear precise words, such as how will you make money, what is the path to profitability etc. Very often writers also loose focus while writing Business Plans, thus it is essential to have a clear focus
Financial Projections: You should be able to provide some rationale as how your projections were put together. Data that is inconsistent with industry norms and overly aggressive should be avoided.
Hockey-stick shaped growth projections: Have projections that are conservative so you can defend them. When in doubt, be less optimistic.
Generalized Market Size : Claiming your market size as huge will lose credibility of your plan. In the future you can target different segments but for now focus on specific segments you can serve effectively.
No real Assessment of Risks: Risks are normally outside the realm of your business. An assessment of what market forces are there that could prevent your plan from being successful in the future.

36. Commonly Made Mistakes
Assessment of Risks: Description of Risk
Cost Overruns in R&D and Production
Failure to meet production deadlines
Problems with Suppliers and Distributors
Sales Projections not attained
Unforseen Economic, Political,Social,Technological Developments
Competitive Price Cutting
Unforseen industry trends
Capital Shortage
Cyclical Fluctuations
Other Risks

37. Commonly Made Mistakes
The Big Deal: Your business may have signed a big contact with a major Client and over-emphasis of this deal can be viewed as a weakness. If 80% of your revenues are based on a one-company contract, your company could tank if the deal goes bust. Highlight that your company is adept at winning big contracts or forging strategic partnerships and this skill will be utilized to diversify the client base.
Distribution Channels : How the product / service reaches the market is an important aspect of the business plan. Resist the temptation to cover all modes by listing every channel possibility it just shows that you lack a channel strategy.
Competitor Analysis: Listing names and addresses of your competitors is NOT a competitive analysis. The investor is interested in knowing what you see from your competitors in the near term; their strategic direction, core competencies, why do customers opt for them, their weaknesses and if they can be exploited.

38. Final checklist Write a nice covering letter
Explicitly add confidentiality clause in the beginning
Provide a table of contents
Check all Financials numbers are in consistency with Summary & Projections
Check that all sections are complete
Make sure all Appendices are included
Get your plan reviewed by others
Write in bullet format, rather than narrative
Look for spelling mistakes
Check page number consistency
Dont use too many colours & fonts
Do not bind in a hard folder

39. What are investors looking for?

40. What are investors looking for?
A keen sense of the pulse of the market
A passionate and never say die attitude
A large market opportunity
A reality based/grounded proposition
Scalability and growth potential
A competitive value test
A sound financial value proposition
Strong Team
A path way to success with quick returns and high liquidity
Exit Route

41. Commonly Asked Questions on Business Plan by Investors
Team / Key Personnel: Explain the team, their background& working experience (relevant to the venture).
Financial Projections: Explain the 3-5 year forecast of all revenue streams, as well as cash flows.
Clients: Who are the current clients? And in the pipeline
Business Model: How do you sell and at what price points, What market segments are you targeting?
Competition: Who are the major competitors?
Strategies & Tactics: Your USP & differentiation
Use of Proceeds: Explain the use of the capital to be raised.
Investors: Who are the other investors in the round?

42. Investor/VC Observations
Investors/VC’s do not expect you to spend your own money
BUT they expect you to spend money as though it were your own
Investors/VC’s do not want you to starve
BUT they do want you to be hungry

43. Contact us- info@dessenceconsulting.com
About Us
D’Essence is a Management Consulting, Business Planning & Strategy, M&A Advisory and Consulting boutique firm.
We assist organizations to :- Build, Grow and Remain Competitive
We advise companies on Start-ups, Entry strategy, Building markets and Sales, Improving productivity and Bottom line performance. Provide Market access and funding through Venture Capital, Private Equity Funds, HNI’s as well as Professional Corporate Bodies
We also aid organizations grow through organic and inorganic routes using tools like M&A - forming Joint Ventures , Partnerships and Strategic Alliances
Since we have operating experience, have set up organizations and created Business Plans for our clients, we could also help you write your WINNING BUSINESS PLAN
Other Services Include:- India Entry Strategy, Strategic planning , Feasibility studies, Sales and Marketing Strategy, Management Audit & Review, Post-Merger Integration