How to Strengthen Your Plan
The judges will choose a winning team that understands its market, provides detailed evidence of potential success, and has an experienced, motivated, and dedicated management team (a submitting team or individual need not have all key positions filled – you may indicate the need to recruit a key manager and compensate for other deficiencies through the use of an advisory board).
Following are a few helpful suggestions:
- Compete on technology, quality, and/or superior service — not price.
- Write clearly and succinctly. Catch the judge’s attention quickly and prove that you are capable of superb communication.
- Present realistic financial projections. Do not write your plan in the “best case scenario.” Our judges are realists. Avoid mistakes like leaving out taxes on your financial statements.
- Charts and graphs are encouraged.
- Know your market, what types of individuals comprise it, what can you predict about potential changes.
- Prove your company’s ability to sustain a competitive advantage (barriers to entry, proprietary technology or information, etc.)
- Build a strong team with both technical and business skills.
- Gather advice from everyone around you, family, neighbors, friends, professors, employers, etc.
- Attend the educational workshops.
The business plan should be easily readable, concise, and interesting. It should address specific strategies, goals, prospective markets and investors, and the actions needed to accomplish or obtain them. It should be to-the-point and contain no unnecessary information. It should include market research and growth projections for the next three years.
The business plan should achieve the following:
- Present the organizational structure of the business.
- Present the resources needed to accomplish day-to-day business.
- Explain the market for the goods or services presented. This must include a detailed result of solid market research. The market research may include market size, anticipated growth, key changes, driving forces of the market, detailed research on the competition, unique capabilities of your company, market penetration, etc.
- If applicable, present the findings of patent research.
- Determine and prepare for the risks and benefits of the operating business.
- Include detailed information about key individuals in your organization and the ability your team has of working well together.
- Present a positive reason for investors to take interest.
Detailed Look at Plan Sections
You may not be able to fully answer every point below, but use this as a guideline for developing your plan and where to focus your emphasis.
- Business purpose. Explain what business you are in and why (i.e., what market opportunity you are going to exploit).
- Give a brief summary of your company’s history and current status, including whether the company is publicly or privately held, or a start-up.
- State your company’s overall strategy and objectives i.e., to go public in seven years, to command 10% market share after ten years, to reach $50 million in sales after five years, etc.
- If you are currently in business, describe your revenue growth and closeness to profitability.
Products or Services
- Describe important features and user benefits – relate features of the products and services to market needs and to the competition.
- Discuss pricing and margins for both your products and your competitors’ products.
- Explain proprietary position – trademarks, patents, trade secrets, special production skills, proprietary processes, etc.
- Describe specific products and projects planned, their status, when due out, expected product life, and potential revenues.
- Articulate any regulatory or environmental issues, if any.
The Market and Marketing Strategy
- Describe in detail what needs in the market you intend to satisfy (i.e., what situations in the market you intend to exploit). Who buys your products and why?
- Descriptions of the market – size, anticipated growth, key changes. What issues, if any, are driving or forcing the market to need your product/service.
- Competition – who they are, how much of the market they have, and their strategic position.
- Unique capabilities – what makes you different; what gives you a special advantage.
- Market penetration – how are you going to reach the market, (i.e., your market strategy – channels of distribution, promotion, pricing, etc. and the cost of the marketing program).
- Discuss the issues or circumstances that “drive” or create the market, (i.e., what compels people to buy).
- Very brief backgrounds of key individuals – why they can do this job, specific value they add to the company, their past successes and achievements.
- History of working together as a team.
- Identification of immediate personnel needs and anticipated initial organizational structure.
- Funds required – how much you want to raise, both initially and subsequently.
- History of past investments, if any; offering(s), type of security, price, other terms, if appropriate.
- Best estimate as to how and when the investor will get his money back: indicate an exit strategy (i.e., mergers, acquisitions, or initial public offerings). Describe, if possible, similar businesses and what their returns to investors were.
- Describe funding needs at each stage of development along with each stage’s bench marks or milestones to be accomplished.
- Simple projection of sales, revenues, income and expenses over a 3-5 year period ARE REQUIRED. State and briefly justify your financial assumptions.
- Include percentages on your statements.
- If you are an existing business, include a past financial history.
- Identify your liquidity strategy.
Adapted from © 1986 WAYNE BROWN INSTITUTE. ALL RIGHTS RESERVED.
Anderson Center for Entrepreneurship & Innovation ~ 418 Haslam Business Building
Knoxville, TN ~ 37996-4140 ~ Phone: (865) 974-5126 ~ Email: ACEI@utk.edu