10 Tips to a Better Business Plan

Some of us in the SG Entrepreneurs team are involved in the judging of the business plans for Start-Up@Singapore. Due to confidentiality, we cannot reveal much about what we have judged. However, there are some interesting lessons that can help to improve the quality of the executive summaries. Our resident contributor and co-founder of Entrepreneur27, Justin Lee draws from his recent experience in teaching RJC students with Bjorn and the judging of the executive summaries, and provides 10 tips to a better business plan.

Contributed by Justin Lee

I just completed scoring business plans for Startup@Singapore. A really interesting job. You may ask why am I doing this since I’m not some big shot entrepreneur.

Well I think you don’t really have to be a big shot entrepreneur to contribute. My Silicon Valley experience was extremely helpful because when I was there I trained myself hard at evaluating every opportunity or business model that I came by. My lecturer John also trained us hard and really grilled us hard. I realized this when I did the workshop on business plan writing to RJC students last weekend with Bjorn. A lot of what he taught was still fresh in my head, deeply etched somehow. So evaluating business plans comes quite naturally for me nowadays.

This is my second year helping out with Start-Up@Singapore. I was invited because NOC Alumni gets invited to help out and I felt it was an opportunity I couldn’t miss out on. Firstly to give back to the community and secondly as training for myself. The training is fantastic because you get to see things from the other side, the investor side of things.

For every plan that I read, I asked myself, “Would I put my own money in?”, “How can I offer suggestions to improve the plan for the entrepreneurs?”

I can’t disclose the business plans for confidentiality reasons but here are some thoughts based on the plans I scored:

The 10 TIPS

1. Format your plans nicely: Some of the plans were just walls of text. I didn’t really feel like reading through it. (But I did as I wanted to make sure I understood everything before scoring)

2. Use Graphs: The ones with sales graphs stood out. I’m a visual person.

3. Use product diagrams: I’m surprised that some of the product ideas didn’t have product diagrams. One picture says it all actually!

4. Explain your technological advantage clearly: A lot of the plans didn’t explain clearly why their technology is so much better. Especially in the tech-field, it is important to explain what features are better than the competitors.

5. Consider the threat of Open-Source: I found that some plans in the IT sector didn’t consider that there were open-source applications out there that were free and could take away their competitive advantage anytime. Consider OS not just as a threat but also as an opportunity/strategy as investors are now still investing in open-source.

6. Explain your target market clearly: Don’t just say that you want to reach for the trillion dollar advertising market. It’s better to focus on a $100m niche within there.

7. Explain why you need so much money: Some plans didn’t even explain why they needed millions. To pay for rental, salaries, holidays? Huh?

8. Spend more on marketing: The company that markets the best wins. Don’t just spend like $50k on marketing and millions on development. Especially if it’s in the IT sector, you can no longer have 18 month long development cycles. If can start off with $50k, create a product and get it out to beta, I’d rather put money in such a model.

9. Make sure the numbers make sense. If you said the market size was $10m in the first year and project your company to rake in $30m by the 5th year, do you think this is reasonable? You might even be outgrowing the market!?!

10. Explain your team background. Some teams simply put their names on it. The thing about startups is that you invest in the people and not so much the idea. So it is very important for me that an executive summary talks about WHY the team is so good. Are you a genius programmer? Write it down. So what if you don’t have a business person on board and you’re all programmers? I think any investor would rather put money into a team of all programmers if they can whip up the next Google. So yeah, don’t treat an executive summary like a school project. Put in some background, put in some personality. That stands out!

Hope this has been as helpful to you as it has been to me.

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