Contents of business plan document

When I decided to startup, I was thinking what kind of industry and what kind of service I should provide.

Industry ... of course web.
Service ... 2C (because all of my experiences was services 2B and I wanted to try 2C)

Then I decided to start new web service to consumer.
But I knew that we need much money to expand web services 2C because we must gather lots of users such as to publish ads or something.



I didn't have such much money so I found I need to get funding from angels or VCs. In order to get funding, I thought I need prototype and business plan document to present them. I've not experienced to present business plan. So I read some books to learn how to make business plan document.

Here's the summary of my learning and I hope it can help you to make business document (* of course it's just one of sample). Also I will introduce books I read someday in the other articles.

1. Executive summary

• Vision (that I want to realize through this service)
• Inception deck (or elevator pitch)

2. Team structure

• Main team members and their approximate profiles
• Organization structure (who are in charge of what?)

* Any books and entrepreneurs says "who does" is more important that "what". 

3. External environment

• Market overview (what kind of changes are happening?)
  + Population
  + Internet users / Smartphone users (for internet business)
  + Social infrastructure, AEC (for business in SEA)
• Market size
  Definition of "market"
  Calculation of market size
  * Generally said VCs don't invest for business with smaller than 100M USD market size.
• Market structure
• Competitors
  * This is required in business plan document. If you don't include it, VC must think your research is not enough or you "hide" something.

4. Sales and profit estimation

• Basic strategy of business
  + Number of users
  + Number of contents
  + Monetize point
  + Oversea expansion
• Profit and loss planning
  + Number of users and unit price
  + Sales
  + Cost
  + SG & A expenses
  * Monthly data for the first one year, yearly data for the next 4 years, totally 5 years data is required.
  * When can you get how much profit?
  * When do you need how much funding?

5. Funding overview and equity finance

• What way of exit do you aim?
• Assumed corporation value and its reason
  Calculate the market capitalization in the DCF method
• Scheme of funding
  Decide when you need how much funding based on P/L plan
• Shareholder composition
  Calculate carefully equity finance

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About Tomohide Kakeya

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