Writing an effective business plan

Writing an effective
business plan
Using the business model canvas, pitch
deck presentations and real life examples
LaunchBase, Maastricht University, June 8, 2015
Benno Groosman MScBA - www.groosman.info

Today’s content
• Relevance of this topic
• Business model canvas + value
proposition design
• Pitch deck
• Full business plan (two versions)
• Extra resources
www.groosman.info 8-6-2015

Relevance of a business plan
• No business plan = no funding.
• Focus, accountability and
looking back/forward.
• Everybody has ideas. Only a few reach
their goals, and this requires planning.
• A plan can be a feasibility test.

STEP 1:
Business model canvas (BMC)
• The BMC is a simple yet powerful tool to
test your (business) idea.
• Each section is filled in by your
hypotheses, which you can test later. A
BMC is a tool for iteration. You can even
test multiple ideas or different business
models (on different canvases) to get an
indication of the most feasible idea.

www.groosman.info
http://image.slidesharecdn.com/bmcmeeiv2emadsaif-130130052951-phpapp02/95/business-model-canvas-101-27-638.jpg?cb=1390285295
8-6-2015

• Strong business model
• Lots of marketing
• Value proposition not convincing
Let’s make a strong value proposition:
essential for startups!

www.groosman.info
https://c1.staticflickr.com/9/8041/7888051104_9bddf08f67_b.jpg
8-6-2015

www.groosman.info
http://advenio.es/wp-content/uploads/2013/04/value_proposition_designer_draft.jpg
8-6-2015

STEP 2:
Pitch deck
• A pitch deck can be used to present your business to
investors. Using this fixed format helps you to cover all the
important parts an investor is interested in (and you
should focus on).
• Use a maximum of 15 slides: you have space for crucial
extra slides for your startup and you can change the follow
order of some slides.
• The following slides are taken from
https://www.crowdfunder.com/resources/templates/Inve
stor%20Pitch%20Deck%20Template.ppt

Investor Pitch Deck Outline
1) Elevator Pitch
2) Momentum, Traction, Expertise: Your key numbers
3) Market Opportunity: Define market size & your customer base
4) Problem & Current Solutions: What need do you fill? Other
solutions
5) Product or Service: Your solution
6) Business Model: Key Revenue Streams
7) Market Approach & Strategy: How you grow your business
8) Team & Key Stakeholders (Investors, Advisors)
9) Financials
10) Competition
11) Investment: Your ‘Ask’ for funding, Basic use of funds
Optional Slides: Exit Strategy, Partnership Agreements, Product/Service Demo,
Existing Sales/Clients, Your “Special Sauce”
8-6-2015 www.groosman.info

Vision / Elevator Pitch
A quick one-liner summary that combines your
vision/product and the mission of your company
Keep it short and memorable
Try: making it relatable… as in “We are X for Y”
(“We are AirBNB for Event Spaces”)
(“We are the Starbucks of Frozen Yogurt”)

Traction
Show your timeline and milestones to date
Growth metrics are key at early stage
Highlight press, partnerships, accolades
Customer success stories and/or testimonials

Market Opportunity
Define Your Market: What business/space you are in
Total Market Size: Dollar Size, Your Place/Niche
Customers: Clearly define exactly who you serve
Macro Trends & Insights

The Problem
Define the real problem/need you’re solving, and for who.
Who else is already doing this, and how are they
going about it and what are they not getting right
or doing wrong?
Current Solutions

Product / Service
Tell the story of your customer and how customers
use/value your product or service
Images and visuals are better than lots of text: show
don’t tell

Revenue Model
Who is your primary customer & how do you make money
What is the pricing / model
Revenue and # of customers to date
Show basic math on revenues and conversion rates
Life-time value of an average Customer (How many months,
how many dollars?)

Marketing & Growth Strategy
Where are your customers looking today and finding
help?
Where will you get in front of them?
How will you achieve your target growth rates?
What are the most important and unique channels and
methods you will use to find and win customers?
How are you doing it differently than others in the
space?

Team
Highlight key team members and their prior positions,
successes, domain expertise
Demonstrate relevant experience
Which roles are the keys to success in your
company/space?

Financials
Include 3-5 years of financial projections
Mention key & critical assumptions in your model of
expenses, customer conversion, market
penetration %
Highlight each of these Yearly for at least 3 years:
• Total Customers
• Total Revenue
• Total Expense
• EBITDA

Competition
Where do you exist in the larger overall Market Space?
What are your Advantages?
How is your place in the market unique to you, and the
right one for your company growth and customers?
Who are the competitors, why have they succeeded, and
how do you truly differentiate from them?

Investment
State how much Capital you are raising, and with
what general Terms: Equity, Debt, Convertible Note
What is the timing of your Capital raise?
Who are your existing & notable investors, if any?
What are your key Use of Proceeds (as % of total
raise)
• Founder salaries
• Sales & Marketing
• New hires
• Technology / Product or Service development
• Capital expenses / equipment

STEP 3:
Full business plan
• The business plan is the most used document for startup
competitions, incubator acceptance, investor contracts,
bank funding, some government grants etc.
• I never met an entrepreneur who likes to write a business
plan, but most agree on the benefits of a plan that is
regularly updated.
• Banks don’t fund R&D and want securities, investors go
for return on investment, governments want to contribute
to society, startup competitions award innovation, etc.
Take your audience into account while writing a plan.
www.groosman.info
Following business plan slides inspired by: http://www.slideshare.net/goldfinger80/investor-presentation-template-1227413
8-6-2015

Business plan
0. Summary
• Problem
• Market
• Team
• Technology/Solution
• Customers/Revenue Model
• Go to Market
• Competition
• Financials
• Milestones

Business plan
1. Team
• List key team members and brief history
• Highlight former work together and the length of the
professional relationships
• Highlight former startups or corporate experience
• Are there any gaps in your team that this funding will help to
fill?

Business plan
2. The Problem
• What is the problem you are solving?
• Describe the pain points you are addressing
• Quantify the pain and how deep it is
• Why does the problem exist?
• Why has no one solved this before?
• What barriers exist?
• Why are you addressing them?
• What advantages do you have in solving this problem?

Business plan
3. Solution (product/service)
• Say what your primary product/service does
• Say how this is an improvement
• What stage are you at?
• Pictures of your product/servce in action
• Visual/chart on how your product/service works
• Is your product/service defensible? (Patents, trademarks,
model rights etc.)

Business plan
4. Business model
• Who are your customers?
• How do you make revenue?
• What is your pricing model?
• How profitable are customers?
• How do you make sure your customers keep buying?

Business plan
5. Market Size
• How big is the problem you are solving?
• Can you quantify it?
• Are there any references?
• Investors want to know that this is a good opportunity that they
can build a big business around. You need to show that the
market is significant enough.

Business plan
6. Go to market
• How will you reach your customers in an economical way?
• What is your distribution strategy?
• What channels will you use?
• Are there key partnerships you have locked up?

Business plan
7. Competition
• Who are your main competitors?
• How are they currently addressing the problem you are
solving?
• In which key ways is your product/service superior?
• What (IP) protection do you have?

Business plan
8. Financials
• Provide financial information for current year and previous year
• Provide 3 to 5 year forward looking projections
• Provide top line revenues, costs, and margin figures
• How much have you raised to date?
• How much are you looking for now?
• What milestones will you achieve with the funding you are
looking for?

Alternative business plan content
• The following slides present the table of contents is from my
startup Salusion, it is to illustrate that fixed formats don’t
always have to be used. Find a logical way of presenting your
plan, without forgetting crucial business information.
• For 5 years we’ve been updating our business plans: for
competitions, banks, informal investors, VC’s, strategic
partners, goverment grants and even as a “information
memorandum” to sell the company’s assets.
• Present more facts and less assumptions in your plan!
• Use visuals/infographics for the key parts of your plan.
• In appendices you can go in dept, not in the main content.
Main content should be ~20 pages (maximum).

Table of content Salusion startup
0. Summary
1. Company details
a. Core activities
b. Mission and vision
c. Team
d. Organizational structure
2. Current situation
Describe the market and the current problem(s). The reader of the
business plan has to get a feeling of the current situation. You quantify
it in chapter 5.
8-6-2015www.groosman.info

3. Product (or service)
a. Describe your startup’s solution.
b. Unique qualities solution.
c. Intellectual property.
d. Benefits of product/service.
4. Business model
a. How do you make money?
b. Key activities.
c. Production and distribution chain with strategic partners.

5. Marketing and market
a. Sales proposition
b. Substitutes
c. Competition
d. Target market and target customers
e. Quantify the market (size)
f. Market trends (future development market size etc.)
g. Potential other markets

6. Price, promotion and forecast
a. Analyze the price of substitute products and/or cost savings for
using your product
b. Determine sales price product
c. Distribution channels (and revenue margin)
d. Promotion
e. Sales forecast for 5 years
7. Risk analysis
a. SWOT analysis
b. Risks and corresponding strategy to minimize risks

8. Current financial situation
a. Annual reports or current spending to date
b. Total funding to date
9. Financial forecast
a. Funding need now (asked) and future
For b. and c. first 2 years per month, other 3 years per quarter:
b. Financial exploitation 5 years (costs, revenues, results etc.)
c. Liquidity forecast
10. Appendices with (technical) details and supporting facts

Some extra resources
• http://www.businessmodelgeneration.com/canvas/bmc
• https://canvanizer.com/new/business-model-canvas
• http://www.slideshare.net/Sky7777/the-best-startup-pitch-deck-how-to-
present-to-angels-v-cs
• http://www.pitchenvy.com/
• http://www.businessinsider.com/airbnb-a-13-billion-dollar-startups-first-
ever-pitch-deck-2011-9?op=1&IR=T
• http://onboardly.com/startup-pr/best-startup-pitch-decks-of-all-time/

Good luck!
Benno Groosman MScBA
www.groosman.info
Follow me:
www.twitter.com/benno_groosman
www.slideshare.com/benno_groosman

Writing an effective business plan

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