Writing a business plan: What to cover?

I’m often asked to advise on or review business plans from budding software entrepreneurs. So often in fact that I have a canned response when asked what a business plan should cover. I thought it might be of interest to a wider audience, so here it goes:

The four T-s

The four things you really have to get across are:

• Team: This is what investors *always* look at first, and it is by far the most important part. Who’s on the team? What’s their background? Do they have what it takes to build the product and turn it into a successful business.
• Thesis: What’s the problem you’re solving? What’s the product? What’s the market? How will it be monetized? What is the competition like? What makes this more likely to succeed than something else?
• Technology: Interestingly enough this is only a place for bonus points. Obviously the technology has to be good enough to be able to deliver on the thesis, but apart from that, here’s where investors will be looking for a “moat” in form of unique inventions, hard technological problems that have been solved or even things that can be patented or protected in other ways. Again, it’s a good bonus, but don’t worry if you don’t have anything like that. Having technology that fulfills the thesis still gives you a “pass”.
• Traction: This one trumps everything else. The investor may (more or less) despise the team, hate the thesis/concept and see no value in the technology whatsoever. But if you have good traction in terms of usage, user registrations, *revenue* or other metrics that are important to your success — they may still invest. Because, money :)

The deck

The order and layout of the deck may vary from case to case, but in general these are the things to cover in a pretty logical order. As a first step I’d aim for one slide per each of the following topics and then combine or — if absolutely necessary — expand on each as needed. Don’t go beyond 15 material slides for your main deck. Ever.

• Vision
• Team
• Problem
• Solution / Product
• Technology
• Business model & pricing
• Target market & size
• Marketing
• Sales
• Status / Traction (Why now?)
• Competition
• Financials
• Funding and exit

If there are things that are especially important to your case, or there are questions that everybody asks when you present your case, add supplementary slides to address them at the end and bring them up when needed.

Format

The format of the business plan doesn’t matter all that much, but I’ve found that the most versatile format is a slide deck that works well for presenting (i.e. limited amount of text on each slide), with thorough presenter notes that expand on the subject if you’re not there to present it. PDF the deck with the presenter notes and use that when you have to email your business plan, e.g. as a follow up after a meeting.

This means that you will only have to maintain one document for both your presentation and distribution purposes, and the deeper dive in the presenter notes works well for people that have seen you present the deck.

Executive summary

Now comes the tricky part. Take everything you’ve covered in the deck above and condense it into a *single page* that gets across all the most important things about your business and serves as an overview and “teaser” for people to want to know more.

Good luck!