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Writing Effective Business Plans and Raising Capital
From: The New York Public Library
| By:
Robert G. HeimHoward S Meyers |
EDITOR'S INTRODUCTION |
A business plan is essential to the success of any business venture, whether you're creating computer chips or potato chips, according to Howard Meyers and Robert Heim, both corporate attorneys formerly with the US Securities and Exchange Commission. Guest lecturers at The New York Public Library's Science, Industry and Business Library, Meyers and Heim provide step-by-step guidance for writing an effective business plan, focusing on language style, use of graphics and conducting market research. They also offer helpful tips for raising funds in a rapidly changing venture capital market. |
In this lecture, presented in its entirety, Howard Meyers and Robert Heim offer detailed business plan-writing strategies.
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 business plan is a roadmap to your company's success. The preparation of a business plan should be viewed as an opportunity to refine your business idea and set the stage for the successful formation and growth of your business. |
A successful business plan will present the company's business idea in a factual, yet persuasive, manner. It is essential to have a business plan if a company hopes to obtain funding from investors. The elements of a business plan are: |
Executive summary
This is the first section in the business plan and it should concisely explain the business concept in a compelling manner. This is a key part of the business plan because the reader will use it to decide whether to read the entire plan. The executive summary should provide a description of the business idea, an- overview of the management team, a description of the market in which the company will operate and a statement about the company's long-term goals. The executive summary is often the last part of the business plan written because it provides a concise overview of the entire business plan. This part should be about two pages. |
Company description
This section should describe the company's mission and also provide general information about the company such as its name, location and whether it is doing business as a sole proprietorship, corporation or other entity. Also, the company's stage of development (i.e. whether it is a start-up or an established company) should be described. |
Industry analysis
The industry analysis section will describe the industry in which the company operates as well as any current and anticipated trends. The size of the industry should be discussed as well as whether the industry is growing or shrinking. If the company operates in a regulated industry, those regulations should be discussed. |
Target market
A company must know who its target customers are, and what will motivate those customers to purchase the company's goods or services. Therefore, it is essential to define whether the target customers are business customers or individual customers. The target market should also be broken down demographically. If the target market is located in a particular geographic location, that should also be discussed. |
The competition
The competition section must describe who the company's competitors are and what share of the market they possess. Don't just evaluate the competition in terms of the quality of their goods or services because other factors, such as price, brand names or long-standing customer relations must be considered. |
Marketing plan and sales strategy
This section should describe how the company intends to make people aware of its products and services and how actual sales will be obtained. A well thought out business plan will include a discussion of the costs of the company's marketing plan. |
Management
The management section is one of the most important sections of the business plan. The qualifications of the company's management team must be discussed and special emphasis should be placed on experience in other start-up companies. |
Long-term growth and exit plan
This section should describe the company's growth strategy and describe how investors will profit from their involvement in the company. Typically, investors will be interested in having the company merge with a larger company or conduct an initial public offering. |
The financials
A current balance sheet and income statement should be provided along with three years of financial projections. |
Appendix
If there is detailed material that is inappropriate to include in the business plan, the company can include it at the end in an appendix. |
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