Entrepreneurs must articulate clearly and concisely the goals of the management team and the company looking five years ahead. Arriving at a convincing statement of goals entails going through a four-step process of evaluation as follows:
Self-assessment by the founders. What do they want for themselves personally and financially five years down the road in terms of their interests, wishes, and needs? Among the alternatives are to be a starting
pitcher, a professional entrepreneur, and a lifestyle entrepreneur.
Stating of the company objectives. How can the founders' personal-financial goals be transformed into a realistic venture? Among the alternatives are to go public, become a giant, be acquired, be a niche company, and be a cash cow.
Matching of individual and company objectives to industry realities. How realistic are these objectives in terms of what ordinarily occurs in the venture industry. Investors do not like to back companies which expect to be the exception to the industry trends.
Satisfying of investors' goals. How well do the venture goals mesh with investor and lender financing criteria? Investors must obtain specific investment returns, and lenders must ensure re-payment of loans. Entreprenenurs must satisfy the criteria of the financiers approach.
1. The Company:
This section should summarize the enterprise's overall objectives, its origins, its expectations, and the management team. Investors should get a clear indication early on of where the company is going and how it plans to get there.
2. The Market:
Within the business plan, the definition of the market to be served by the company is second in importance only to the definition of the company itself. An important part of that market definition is a description of the benefits to the user of the company's product or service and why. That is, entrepreneurs must demonstrate that they focus primarily on the market their company will serve rather than on the technicalities of their product or service. Investors are interested in companies which are market-driven, not product driven.
3. Product (or service):
This section describes the company's products or services, including a summarized theory of operation and a statement about performance and present status. The proprietary, patented, or patentable features of the company's products should be summarized in this section.
Investors will want to know precisely how the company plans to approach its customer prospects and thus capitalize on its potential.
In this section, the business plan