We are very early stage and don't have an alpha for our web product yet.
EDIT: we are planning on doing this so we have something to show VC/Angels when we seek funding. which we are needing (somewhat) now.
Granted, most online business won't meet all of those requirements, but they also aren't likely to be funded by Sequoia.
* Define the company/business in a single declarative sentence.
* Describe the pain of the customer (or the customer’s customer).
* Outline how the customer addresses the issue today.
* Demonstrate your company’s value proposition to make the customer’s life better.
* Show where your product physically sits.
* Provide use cases.
* Set-up the historical evolution of your category.
* Define recent trends that make your solution possible.
* Identify/profile the customer you cater to.
* Calculate the TAM (top down), SAM (bottoms up) and SOM.
* List competitors
* List competitive advantages
* Product line-up (form factor, functionality, features, architecture, intellectual property).
* Development roadmap.
* Revenue model
* Average account size and/or lifetime value
* Sales & distribution model
* Customer/pipeline list
* Founders & Management
* Board of Directors/Board of Advisors
* Balance sheet
* Cash flow
* Cap table
* The deal
It looks old and outdated and cheesy. But while it is from 1987, the differentiating principles are the same ones that you hear echoed by pg, 37signals, Sequoia, etc. Sound business principles (the kind that an investor who has not drunk of the kool-aid, yet, should possess and be looking for) have not changed in those years. The book pushes you to answer the same hard questions that a good investor will, and position your plan in the best possible light.
Keep working on your product, get a user base, and worry later about verbalizing the specifics of your projected market share and what day exactly you plan to go cash flow positive.
Sure, a business plan will force you to really question what your value proposition is, and how you plan to differentiate your product, but that can all be done by creating a brief outline.
But if you must: http://www.microsoft.com/smallbusiness/resources/startups/bu...
That's only going to be true if you're making something like a website where the market and the monetization strategy are limited to a few well-understood choices. If your business is something like, for example, selling handicapped-accessible home swimming pools to parents of children with disabilities then a business plan is key.
They don't invest their money in hot air :-).
If you're building a web product, and you're in a tech hub like the Valley, Boston, NYC, Austin, etc... I wouldn't bother with a business plan. If you're not in a tech center, I'd bet you're going to have a hard time raising funding with or without a business plan, but YMMV.
If you're gung ho on a business plan, the "Business Plans for Dummies" is a decent start. SCORE: http://www.score.org/index.html offices usually have a lot of good resources on business plans, bus. plan writing software you can use, etc... They would probably have someone who would be willing to look the plan over and critique it for you. And, I know it was mentioned elsewhere, but the Small Business Administration has a lot of resources for small businesses: http://www.sba.gov/ You also might want to try your local chamber of commerce as well. If you're in a smaller/mid-size city, business people are probably going to be your sources of funding, so you might as well go where they are and start networking. You could make your business plan and ask for a critique from a couple of them and see if it gets you anywhere.
What sucks is I'm not in a hub or really anywhere near one. I'm hoping to find something/someone locally who is willing to fund me (and my co-founder) enough to get to one. Until then... I keep hacking.
We used that as a model when we wrote our first business plan.
1. The purpose of a business plan / pitch is to sell your company to an investor, not just describe it. (This is a pretty self-evident point, but it's helpful to hear from my perspective as a hacker who's usually very interested in how things work, and sometimes needs to take a step back to think about those kinds of issues.)
2. Don't try to fool an investor - they see hundreds of business plans a year, and already know all the tricks out there. Just be honest and rely on the merits of your product / team / strategy. If you have a good idea and a plausible way for it to be successful, you've already got all you need. (Another simple idea, but it's nice to hear from an investor that honesty is appreciated, and that a hacker with good communication skills has a chance against a smooth-talking MBA.)
They also distinguished between an operational plan and a business plan, saying most combine them. The "how" you are going to accomplish your goals can be in a separate document for later.
Here is more info on the one-page approach:
Here is what we used to model our business plan from:
Personally I've read my fare share of literature on business plans but must say the book "The Definitive Business Plan" by Richard Stutely stands far above all. It's not written with a specific focus for a Web 2.0 firm but will give you a really clear overview of what you would want to include.
I hope I have been able to be of some help.
It's also important to not overlook the risk analysis section. Go a step beyond a simple SWOT analysis and describe your most primary risks, how you will mitigate them, and what your contingency plan is. If you don't have this section in your business plan, investors will undoubtedly grill you with questions on how you plan to deal with risk.
Keep terms consistent and be sure to PROVIDE CITATION for sources used in your market analysis. Yes, it can be a pain, but it goes a long way in showing the reader that you've done your homework.
Following a template is not a sure-fire way to write a success business plan. The outline posted here is a very good starting point--take it and adapt it, add sections, and remove sections to make the plan more relevant to your business and its operating environment. Above all, avoid using business plan software. In any business plan, your primary goals are to illustrate that you know what you're doing (strong team, market and competitive analysis sections), you know how to deal with risk, and that you are passionate about what you're doing. When writing for investors, try to avoid coming across as desperate--give the impression that whether or not you receive money from them, this is what you're doing, the investment would just make things a little easier.
Having said that, I'm one of those guys who really did find the process of writing a business plan to be personally helpful, whether or not a potential investor likes the result. So here's my .02. I'd start with John Nesheim's books, both "High Tech Startup" and "Unfair Advantage." I'd also check out his blog and his reading list. Somewhere in there he has a template that many successful tech companies have found useful for their own business plans. He also has a sample business plan, written by students, that you can take a look at.
Again, a rough 10 or 15 page business plan can't hurt at this stage, but you should be focused on making your product awesome, so that people will want it. Get that handled, and then worry about writing a really tight executive summary and you'll be good to go.
For writing a business plan, try the book Hurdle (OOS on Amazon at the moment) or try the following from the SBA:
a small business opportunity. allow people to post their redacted business/operational plans for funded/non-funded entities.
allow people who are looking for live plans to be able to search through abstracts/text of the plans to get a feel for what's there... charge people something small, like $10/year for the rights to access/view x number of plans.
charge them something less if they post their own plans...
also, have the ability to have plans (anonymously) reviewed by given trusted people within the site...
to deal with someone's fear that a given idea might be "stolen" the actual idea portion of the doc can be left out... for the purpose of this site, it wouldn't be that important/critical...
if you want to build something like this, let me know.. i'd probably be willing to personally throw a few grand into something like this....
I've found this site to be an awesome resource.