To summarize:

• Make every statement count – be clear, be precise
• Don’t be technical (after all it’s a business plan)
• Make the job of reading the plan easier,  visually alert the investor to things they want to see
• (Early Stage/Startup Companies) If you have paying customers this is a big deal..
• Really make the executive summary stand out. Give the investor the motivation to read on.It really should be a self contained document that you can extract and it makes sense by itself.

Checklist:

• Business Overview (what you do and why)
• Size up the market opportunity
• Industry Analysis
• Describe the team
• Explain the business model
• Show Financial projections
• Show Funding sources (and usage)
• Exit
• Appendices/Schedules

Personally, I want to wish all entrants for the InterTradeIreland Seedcorn competition the best of luck and cannot wait to see who gets selected this year both as regional finalists and overall finalists. Winning the investment really has helped Cauwill. Financially it helped out but the PR and confidence it gave was worth than the money – as a result we’ve had a great year, signed more customers and are now looking to take our 1 year old company to the next level!

Finally, if any one entering the competition wants to get in touch please feel to do so.

Regards,
Ronan.

These sections really bring the plan to a close and it’s focused one major thing: Think Jerry Maguire – think “Show me the Money!”.

You need to show the money (twice).

1. Money that company will make from the product year to year
2. The amount of money the company will be turning over in 3 / 5 years

Remember you are inside the mind of an investor.. if they are going to but €MONEY into the company they will want to see a return of, say, 10 times €Money. You have to be realistic. You can’t sell an iPhone App to every owner of an iPhone. You’ll get a % (a two digit number if your lucky). Investors are very smart and will therefore spot any flaw.

The last section is “The Exit”. For us (and presumably others) this was a very short section – we clearly stated what we wanted to happen in 3 years. The investor wants to see an exit otherwise no matter how good everything is they won’t invest. Scroll down to see an answer investors like to see.

Tomorrows post will conclude the series and have a word document template with even more comment!

7    Operations

Being a software company we don’t really buy stuff in as part of the production process so there is no real supply-dependencies. This section for us was pretty short.  We do everything in house so there was major outside dependencies except for some 3rd party software.

7.1    Location

Where are the super heroes located? Store house needed?

7.2    Equipment

Shovels? Spades? Clouds?

7.3    Licensed 3rd party software

If you use other software list it here.

8    Key Risks

Spell out the risks
•    Cloning?
•    Speed to Market?
•    Funding & Finance
•    Key personnel ?
•    Scaling

Give clear statements to how these risks can be mitigated. These risks can be fixed, a lot of the time with money – so the next section and this section are closely linked.

9    Financial Plan

So you have outlined a plan showing the product, why it exists, who will buy it, how much they will pay for it. Behind this plan is the team of superheroes and it will cost money to execute the plan. This section does 2 things:
•    Shows how much money the company can make using your outlined business model(investors like to invest in companies that make or show great potential in making money)
•     How tight/mean/lean your company can run on

9.1    Shareholders/Ownership

•    If the superheroes have shares  indicate %
•    Who else has shares?

9.2    Royalties

If applicable.

9.3    Profit and Loss Summary

We put a condensed version of our excel sheets in here. (3 years). Expanded versions were in the schedules below
Year 1                            Year 2                           Year 3
Sales revenue
Less cost of sales
Gross profit
Less expenses
Net Profit(Loss)
Less Tax
Net profit(Loss) after Tax

9.4    Balance Sheet

We put a condensed version of our excel sheets in here. (3 years). Expanded versions were in the schedules below

10    Funding

Now that you’ve shown how much money the company make in 3-5 years but you need a small amount (in comparison to year 3/5 profits) to get there.
How many rounds of funding will be needed?
If there has been previous rounds:
•    How much money have you put in to the company yourselves?
•    How much money has other people put in so far?
If you need money now (and let’s face it you are entering the seedcorn competition to win investment)
•    How much money do you need now? (200k? 500k?)
•    What are you going to do with this money? (Top-tip on what you should NOT spend investment money: your salary, new car etc. )

10.1    Achievements to date

To help the reader/investor believe in your business plan, state you achievements to date.
•    Get on an EPP?
•    Win any awards?
•    Spin out of a knowledge provider?
•    Got customers?

11    Exit Strategy

Right answer: “Trade sale for cash ( with revenue streams of X million euros) in Y years. ”
Wrong answer: “We don’t want to sell the company. It’s our baby”.

Time to get inside the venture capitalist who is now looking at  your business that offers:

1. a clearly specify the product or service
2. a large potential number of paying customers
3. at a price well above what it would cost to produce i.e making a profit (while delivering customer satisfaction)

What else do you need to let the investor know? You need a good business model. One that offers genuine choices of:

1. Who is the target customer? Why was that target sector chosen?
2. What is the product?
3. How is the company planning to deliver the product and maximise margins?

I can’t stress enough that this needs to be in plain and simple English – no jargon!  Each of these points has to be obvious to the investor.

4 Product or Service Proposition

4.1 Unique Selling Points

Expand on your products USP. Sit down and using a clean sheet of paper work on your USP. Remember this is a Marketing concept so thing like a marketing guru.  Why would someone buy your product over the next? If you buy this product what are you getting? Leave the sheet of paper in a drawer and come back to it in a couple of days. Does it make sense now? Show & tell the USPs  to random people – do they look at you with one raised confused eyebrow or nod? If they nod you on the right track.
Have a think about other Products say an iPhone. Why would you buy an iPhone over any other smartphone?

4.2 Protecting the Product

If you have protection on the product – trade marking, patent etc. declare it in full.  Show the logos, box, packaging  etc. of the product.

4.3 Endorsement of the Product

4.3.1 Customers

The biggest endorsement is having customers.  Get the CEO/MD of one of your customers to say something nice about your product.

4.3.2 Reviews

If anyone has endorsed your product – blog write-ups, if it’s been promoted (say at the Las Vegas Consumer Electronic Show by Nokia).

4.3.3 Nominations

Been nominated for any awards? Win any prizes?

4.3.4 Poll/Survey of X000 users

What do your users think of it?

4.4 Additional R & D

What next are you going to do with the product to improve it?

4.5 Time to market and route to commercialization

Is it ready now? Does it need further work? If it’s ready how are you going to bring it to the market?

4.5.1 Selling directly to business

4.5.2 Selling directly to the end consumer

4.6 Technical risk

There is always technical risk! What sort of secret sauce do you have  - is it reversible? Can you prevent it from been cloned?

5 Marketing Plan

How are you going to inform people of your product? Tradeshows? Cold calling? Magazines, Radio, TV, viral marketing ? Have you contacts in the market that you can leverage?

5.1 Business model

Check out “Business Model Generation” by Alexander Osterwalder book for more on this section . I’ve included the Canvas page but make sure you read the freely available section of the book that explains it. [grab it here]

Some fundamentals that need to be clear:  B2B or B2C?  and how you make money!
E.g. you can buy an apple for 10cent.  You sell the apple for 20cent. It will cost you 2 cent to deliver an apple.  8 cent profit.  You must avoid the South Park Underpants Gnomes business model  at all times! [Google it!]

5.2 Distribution strategy

How are you going to distribute the product? Direct Sales or via a distributor?

5.3 Revenue model

Revenue share? Direct Sell? Via a reseller? Transaction based? Percentage of membership?

5.3.1 Business to Business

5.3.1.1 Pricing:

Clearly show how much your product is selling for. The cost of sales etc.

5.3.2 Advertising

Is there a way your product could carry advertisement? Extra revenue scheme?

5.4 Key Customers

Who are your key customers in the next 12 months? How are you going to get them? How do you promote to them? How much can you make if you secure the key customers?

5.5 First Addressable Market

So you have a few markets you are going to go after – but which one first? Spell out your logic.

5.6 Funding Avenues

It’s going to take a bit of time to get customers on board (it always takes longer than you think!) so how are you going to keep the show on the road?

• FFF?
• Banks?
• Business Expansion Scheme?
• Angel Investor?
• Joint funding from EI & Venture Capital investment ?
• Other

6 Management Team

Big section here – you can have a super-duper product but without good people to execute a plan then the product will not gain traction. Who are the super-heroes in your team and what are they responsible for?  What are the backgrounds of the founders? Experienced?
Outside the core team who are the advisors? The accountants, the solicitors? We are fortunate to have a good set of mentors in the Valley and this helped us stand out.

Section 7 ( Operation, Risks, Financials) coming in Part 3.

Don’t worry about cutting and pasting from the blog – with the last blog of the guide (Thursday)  I’ll be attaching a complete word document version of the guide with extra comments from InterTradeIreland. Feel free to ask & post questions – I’ll be happy to respond to them.

At a later stage I’m going to do the same for the regional and final presentations for fortunate companies that make past the business plan evaluation section of the competition. Let’s hope it’s you!

DISCLAIMER TIME: There is no guarantee that if you follow the guide exactly that you will win the competition.. quite the contrary this business plan worked for us because it is OUR business plan. Your company business will be different to ours so your business plan will be different also. Things we left out, you may need to include. With that, we wish the best of luck.

So let’s look at Part 1 of the guide which will cover: Overview Document length and style, Cover Page, Executive Summary and  Sections1 – 3.

English and style of our business plan

• Formal English
• Font size 11 (Calibri/Myriad Pro)
• Numbered Section Headings
• Short snappy sections – no long & fluffy paragraphs!

Total Document =

1 Cover page + 25 page BizPlan + 4 pages Schedules / appendices

Cover page had:

Company Name, Date and Seedcorn Category.

Executive Summary (3 pages)

Really important section and you should do this LAST as it’s the best of the document.

• The Problem
• The Solution (add a picture if it helps describing the solution)
• Business Model
• The Opportunity
• Achievements to Date
  • If you have paying customers make sure you state it (helped us stand out)
• Management
• Forecast Sales and Profit
• Funding Required
• The Exit
  • Investors want to see how they are going to get their moneyx10 back

1         Business Overview

1.1       About the Company

Who you are, What you do in. Who you sell to.  All in less than 300 words.

The most important things to talk about here is the “Value-add” – what have you got that others will see the value of and will therefore pay for. Do you save them money or provide a way for them to make more money – that’s all its really about. Need to capture the reader imagination here – if they “get it” and believe you at this point then everything else will confirm it for them – if you lose the reader on the value-add –then you’ve lost them totally!

1.2       What the product is

• Features
• USP
• Benefits (to your customer)

2         Market Opportunity

2.1       Who needs the product?

Identify the sector who needs the product. Cleary Identify why they need it.

2.2       How many of them are there?

Quantify.

2.3       Other Markets

Maybe your product is applicable to other markets but you are focusing on one/two at the moment.  If so identify them here.

2.4       Key purchasing criteria

Why would customers buy your product. Hint you are going to:

• Save them money
• Save them time
• Make them money (by selling it, getting more customer etc.)
• all of the above

2.5       External Factors influencing market demand

Eh – downturn!

2.6       Specific market/demand opportunities

You should show very specific and independently delivered facts that the market is looking for your product.  “According to Market research conducted by PhoCusWright.. PWC etc.)

3         Industry & Competition

What makes you confident that you are in the right industry? What has happened to strengthen your belief that the industry is growing.

What is happening within the markets/sectors that convinces you the business has potential to grow?

3.1       Competition | Direct

List direct competition here – find out as much as you can about them. Market share, funding, backing , strength, weaknesses etc.

ps. You have competition. If you don’t there probably isn’t a market for your product.

3.2       Competition | In Direct

Same here but not as much detail as direct.

3.3       Competitive Advantage

Why is your product better than the direct competition.

Section 4 in tomorrows Post…

We arrived nice and early and got very cool rented Cube bikes from the centre for 40 yoyos. We were joined by another keen mountain biker who had done the Ballyhoura trails before so he was our lead and suggested we take the White trail – just 35km. The bikes were top class, very new, well serviced and well up to the task at hand – I therefore can’t blame the bike on nearly keeling over on some of the hills. I was wrecked after about 20km! Cycling up mountains is tougher than you’d think!

Apart from some steep climbs, the white trail is amazing! Some very fast parts, dark and spooky forests, long wooded boardwalks and fantastic views. The climbs might be tough but the downhill sections are just amazing and make up for the hard work getting up the hills. Speeding down a narrow track avoiding rocks really gets the adrenalin going

Because the scenery is so spectacular you might be lured into looking around but this is the biggest mistake you’ll make – it will only result in a crash – which will hurt! I came off a few times the worst when the pedal caught a rock and sent me flying! The other thing that will hurt like mad will be your ass! So here is my top-tip for mountain biking – wear shorts with (extra) padding!!

I’ll definitely be going back again – once my ass has recovered!

Iano brought his super-duper GPS watch which produces a map of of the trail.. (very cool). Note the steep climbs!

12 months ago we had a nifty piece of mobile technology, no customers, no money (except our savings) and no real idea what the future held. Leaving the safe* employment as a researcher in a university was one of the scariest decisions we had to make but it’s been all worth since we spun out the company. That’s not to say there hasn’t been bad days since spinning out – of course there has been! Someone told me recently the longer you are in business and the highs get higher and lows get lower.

Looking back over the year we certainly had some really great days, first customer, getting more paying customers, hiring staff and of course let’s not forget about winning InterTradeIreland’s Seedcorn competition as ‘Best Emerging’ Company!

We have learnt so much over the past 12 months and sitting in UL researching & lecturing seems like a lifetime ago. I think I would find it very hard to go back. I spoke to a mate of mine last weekend (whom I spent countless hours in the UL WAR lab trying to get a testbed to work) about leaving and the challenges/changes it has brought. He was adamant that I needed to leave and it was the best thing to do as it’s open a entirely new world. I couldn’t agree more. Hindsight is a wonderful thing. The only downside to leaving is the lack of a salary! Startups don’t pay well at all

So over the past 12 months what have we learnt? Here is a list in no particular order of some of the learnings.

You have to be a little crazy.
You need to love what you are doing otherwise you will grow tired of it. You have to give up a lot of things to follow this dream. You will have to be able to make, what seems like, crazy decisions to try better the company. Finally, you need to be able to calculate risk and act on it (it helps here being a little crazy!)

You need a plan.
It doesn’t have to be much, but you need a plan! Who are the customers? How many customers? Why do they need your service product? Why would they buy from you and not Joe down the road? How much will they pay for it? How do you get to them? Where do you want the company to be in 3, 5 years? How are you going to get there? How much money do you need? Where will it come from?
I’m preparing a post about our Seedcorn business plan which may be of interest to people in Ireland.

Make sure you have a partner.
I was super lucky. Ian was in the same position/mindset. We worked together in UL for the past 10 years so we knew each very well. Cauwill wouldn’t be where it is right now if either did this alone. It probably wouldn’t have made it to one. Simple as that.

Don’t ram technology down customers throats!
We’ve learnt when talking to potential customers the secret is not to talk! Ask questions about their business, their needs, things that are hurting them in terms of time/money. If you have a solution for their pain they will be a lot happier to engage with you.

Build Relationships & Communicate
It’s important to go out and meet people. At times it’s hard but it has to be done. If you don’t do this how will be people be made aware of you and your product? Be active on the social networks, go to seminars, open coffees, trade shows, etc. the key is just to get involved. Some of this seems like it will go nowhere, and the majority of it will go nowhere, but on occasions some connections you make can lead to big things down the line. Some of these connections could lead to my next point.

Build a network of mentors.
Mentors = friends, colleagues, people in the shared office, maybe elite and trusted customers. You won’t be able to do everything and you’ll need people to talk to on a regular basis. You draw on their experience in business, marketing, PR, sales etc. to help you make better decisions. Note: you don’t want a bunch of yes ‘men’ either.

Keep on top of things.
This includes; market research (know what has happened, happening now, might/will happen in the future). Keep all your financial accounts in order from day one. Keep a track of every correspondence with {potential} customers – get a CRM package (onepagecrm, zoho, capsulecrm etc.) in place.

Don’t spend all your time on development
Can’t stress this point enough. Don’t spend all your time developing the mother-of-all-products. No-one will use it. You might get lucky but chances are you won’t. Listen to what your customers want and develop to their requirements. Release often and release early. Provide good great customer service and you’ll be on to a winner.

Out source
Know your weak areas and out source these tasks to people how can do it better than you.

*Safe; once you have a contract you get paid every month! Getting the contract is another matter altogether!

Under the hood the n900 has ARM Cortex-A8 processor with up to 1Gb of Ram and 32GB internal storage, 3.5mm AV connector
TV out (PAL/NTSC), Micro-USB connector, High-Speed USB 2.0 Bluetooth/WIFI/Integrated FM transmitter and the quickest Integrated GPS with A-GPS I’ve ever seen on a nokia. Not to mention it has a full qwerty keyboard, a good 5mp camera but unfortunately the device is let down a little by the dodgy touch screen. The stylus does improve the touch screen but not something I would use all the time so I’ve been left tapping the n900 a couple of times before I get the desired response. Anyhoo – that’s a lot of spec for just a ‘phone’ – this thing is capable of running XP for heavens sake!

The operating system, Maemo, is built on Linux so you get all the benefits of a Linux OS – It’s not every day you can open one can open an x-term on a phone and ssh into your cloud! sweet!

The user interface is pretty good – nice and swishy. Nokia have kept some of the Symbian look and feel (most notably under the main menu) but the rest of the system is what you expect from a modern phone, errr, tablet pc.

Here is a list of my favourite apps so far

• Facebrick
• TweeGo
• Angry Birds
• Stellarium
• Hermes
• Firefox
• Foreca Weather Widget
• rootsh
• wifiEye

Some of the downsides:

We met up with Paul Sandham of Geosho at the Inventorium event and climbed Mynydd Friday evening. Paul then recommended we take the Watkin path to avoid the masses – and boy was he spot on. On Saturday we climbed Snowden in glorious sunny weather as did 100o’s of others – thankfully they all took the easy path while we took the hardest . It was tough going but we managed to get up in just over 2 hours. On the way down Iano transformed in some kind mountain goat.. he would have been down in less than hour if I hadn’t slowed him down!

If you ever get the chance you should climb Snowdon – the view is just amazing..