ENTREPRENEUR/ BUSINESS PLAN SPECIAL .....Crafting a Winning Plan

Crafting a Winning Plan Shaping creative ideas into a practical format is important for entrepreneurs launching new ventures. A good business plan goes a long way in attracting attention of investors What is a Business Plan? Startups are born from ideas, but it is the business plan that provides form and structure to them. The document, which entrepreneurs share with potential investors, spells out the methods an entrepreneur will employ to grow a new business. Often a mixture of art and science, a business plan usually contains a definition of the product or service on offer, details of current and future earnings, team profile as well as snapshots of competitors and investors. While a fledgling venture can have a one page executive summary, mature companies can have business plans that run into a dozen pages. Although it is not legally binding, a good plan, like a good CV, can mean the difference between success and failure. What it must contain Introduction: Spells out the idea of the company, how it began and the way it expects to grow Team: The composition of the management, the board, advisors and mentors Opportunity: The specific problem that the startup aims to solve, the size of the market, and the expected growth Solution: Details of the method that the startup will employ to reach stated goals Competition: An evaluation of the strengths, weaknesses, opportunities and threats to the startup, its existing competitors and the investors behind them Business Model: The way in which the company will earn revenue and profits Expectations: The money required from an investor at a specific value, and non-monetary support such as mentoring and operational inputs Don’ts What shouldn’t be there in a B-plan Too much detail too early Typically startups don’t have all the information that can constitute a proper plan, so keep it crisp. Some accelerators expect only a one page note with 10 points for early-stage companies Exaggerate the opportunity Hype may downgrade your startup in the eyes of investors. Such plans, even when presented to multiple investors, do not draw a response Set over-ambitious goals Entrepreneurs have a tendency to make their projections too optimistic. Do not put long-term milestones—18-month to two-year projections are enough Ignore competition It is vital to be aware of current and potential competitors. List all possible rivals and show how you are better or different Formatting Errors Business plans must not be too detailed and unwieldy. Do not make errors—in spelling, grammar or in calculations. Jargon and acronyms should be avoided TIP Bharati Jacob Partner, Seedfund “It helps an entrepreneur understand the assumptions he makes when starting out and communicate them to investors. These projections should be grounded in reality and also be logical.” Brij Bhasin, Partner, GSF “Startups don’t have all the information that can constitute a proper plan. Pricing and revenues are farfetched if the product is still under development.” Dos What should be there in a B-plan Define Customer Need Investors may be unfamiliar with the market a startup is focusing on, so explain assumptions. Try to use pictorial representations and diagrams Highlight Team Strengths Communicate how many people you need and state how much they will cost Correlate spending with earning In the finance plan, add milestones and projections for a maximum of two years. Founders may make the mistake of projecting revenue of 100 crore when the market is only 200 crore Provide clarity If you need $10 million, say why, how you will spend it and what returns an investor can expect Pay attention to details Presentation matters, especially in contests where a team gets only 5-7 minutes to present a plan. Some perform a skit, others begin with startling statistics or show an interesting video Cool Formats for biz planS MIND MAP The plan is pictorially shown with branches leading out of a single idea. They depict various categories - customer, market and financial data MOBILE APP A plan embedded within a digital app allows viewers to click on topics that they want to explore COMIC STRIP Cartoons with thought bubbles can replace ‘boring’ text in power point presentations ANIMATION MOVIE Similar to a play, an animated video can simulate the various aspects of a business DRAMA/SKIT The founders act out the concept of their business in the form of a play, showing the problem they are trying to solve and the beneficiaries TIP Kanwaljit Singh Senior MD, Helion Venture Partners “A lot of founders do not talk about their expertise and capabilities of team members, that is what we are looking at in a business plan.” Why I don’t like B-Plans for early stage Pankaj Jain, venture partner, 500Startups “Early-stage startups shouldn’t even bother with a business plan. A one-page executive summary is usually good enough to think things through, pen down your thoughts, and articulate them. Use the time you would spend writing a business plan to write code and do marketing.” Annual Biz Plan Contests in India QPrize Qualcomm Ventures selects regional winners who get $10,000 and compete for the global prize that offers $150,000. Timeline: In 2013, the contest was held in March Compiled by Megha Reddy Next Big Idea Sponsored by the Department of Science and Technology, Government of India, Intel and the incubation centre at IIM Bangalore. Participants can win up to `1.5 lakh, raise seed capital and receive mentoring Timeline: In 2013, the contest was conducted in May Eureka Prize money of up to 45 lakh and is conducted by the entrepreneurship cell at IIT Bombay Timeline: Applications to be sent in by October 3, 2013 Empresario Conducted by entrepreneurship cell at IIT Kharagpur; offers incubation and capital of up to 2.5 crore Timeline: Applications to be sent in by October 30, 2013 Conquest Conducted by Birla Institute of Technology and Science, Pilani; offers cash and technical support worth over 2 cr Timeline: In 2013, conducted in May TIP Saurabh Kochchar Founder, PrintVenue “Remember you are making an investor believe in a dream, and part with his precious money. Entrepreneurs make a mistake of giving gyan on the market.” Some Online RESOURCES www.Bplanexperts.com Helps entrepreneurs draft plans in a board game format www.score.org Conducts online workshops and provides mentoring www.bplans.com Offers mentoring, advice and design inputs www.business.govt.nz Gives advice on regulatory framework and templates www.business.gov.au Provides information on government grants and free formats TIP Arnab Ray, CEO, BPlanExperts “Most plans suffer from entrepreneur’s myopia — a feeling that makes a plan completely biased.” Harsimran Julka and Radhika P Nair ET130927