Seeking funding from lenders and investors for your start-up can be an arduous task. Most will require that you create a business plan that covers all the major aspects of your business from organizational design to product development and distribution to financial forecasting.
This 3-part series is intended to demystify the business planning process-making it easier for you to find the funding you need to achieve your dreams. In this installment, we will examine what goes into the Business Synopsis Section of the typical business plan.
The standard business plan begins with a Business Synopsis Section which introduces your business to potential lenders and investors. It should include summaries of the following topics:
Company Background-This segment of the Business Synopsis Section should include a discussion on Ownership which delineates partners, their educational and business backgrounds and percentage of ownership; Company History which describes what inspired you to start the business and the evolution from its beginnings to where it is today; and, Business Locations and Facilities (be sure to present the address, building description and a summary of the type of equipment available in each location). This gives likely lenders and investors a sense of whom and what they're potentially funding.
Products and Services Overview-This component of the Business Synopsis Section should include several parts:
- Product and Service Offerings, which lists a detailed description of each;
- Basic Competitive Assessment that explains ways in which your offerings are differentiated from others already available in the marketplace;
- Sourcing and Fulfillment, which outlines how you get what you need to produce your product(s) and how you deliver them to the marketplace;
- Technology Dependencies that describes the key technologies needed to do; and,
- Future Products and Services. After all, potential sources of funding parties will want to know what you're currently selling and your ideas for what you're going to develop and sell next.
Current Management Structure-This part of the Business Synopsis Section should present an Organizational Chart representing the major functions that make up your business and the reporting lines that are in place to manage the work of the business. A discussion of the extended Management Team is also included. It's important to demonstrate the depth of talent that you currently have in place within the business. A Personnel Plan is also customary. Be sure to discuss any management team gaps that may exist. Lenders and investors want to understand your team and the talent required to bring your business to the next place.
Crafting the Business Synopsis Section of your business plan, as outlined above, provides a nice and easy way for you (and your leadership team) to get into the right frame-of-mind required to complete the more detailed and analytical parts of business plan that are required for completion.
To close, even if a formal business plan is not a prerequisite of the potential lenders and investors that you're pursuing, driving yourself and your partners through the exercise of business planning is worth the effort. It will help you all to better understand what you're undertaking and can expose some blind spots that could upend your business in the future, if left unattended. Be sure to check-back next week for Part II of the series, when we cover market analysis and sales forecasting.
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