The executive summary below is actually an altered and disguised version of a real executive summary. But it remains as badly done in this state as it was in its original one.
Electronic Components Inc.
Electronic Components Inc. is a start-up company that will make a variety of electronic components, beginning with a new type of aluminum-based capacitor. This unique product, coupled with excessive commercial demand for capacitor devices, will provide us with an ample share of the capacitor market and numerous opportunities for expansion into related electronic components.
The founders are dedicated and determined to make the venture a successful and profitable entity. Technical expertise is provided by James F. Lynch, who has been involved in designing capacitors for 11 years. He obtained a Bachelor of Science degree in electronic engineering from the Massachusetts Institute of Technology.
Technology for capacitors is changing rapidly. Electronic Components Inc. has an opportunity to capitalize on a major technological change by getting off to a quick start and expanding quickly.
This proposal pertains to two additional phases of required financing. The first phase, consisting of about $150,000 for pilot plant start-up, has been completed from the personal funds of the principals. The remaining financing is for the following:
Phase Two: Obtain $750,000 capital for:
Phase Three: Increase production and sales
Financing will be used to purchase manufacturing equipment, hire the necessary employees, and develop new markets. In addition, management intends to spend between 10% and 20% of revenues on research and development of new products.
The electronics component field offers attractive opportunities for fast sales and profit growth. Already, demand exceeds supply in the capacitor area as well as in other related areas.
What's wrong with it? You can probably spot some problems, but here are four prominent ones:
Of course, you will likely see other weaknesses, such as the lack of explanationabout the competition and the management team. But essentially, the businessplan's authors wasted space; by devoting so much time to certain issues, theyneglected others. It's hard to get excited about the business plan.
This material was excerpted from Chapter 4 of How to Really Create a Successful Business Plan, by David E. Gumpert.
Copyright © 1996 Goldhirsh Group Inc.