Writing a business plan: advice from Sequoia Capital, one of the most successful VC of the last 40 years

We love what Sequoia Capital says about Business Plan. The original can be found on their web site, but we are pleased to reproduce it below:

sequoia_capital

We like business plans that present a lot of information in as few words as possible. The following business plan format, within 15–20 slides, is all that’s needed.

Company purpose
Define the company/business in a single declarative sentence.

Problem
Describe the pain of the customer (or the customer’s customer).
Outline how the customer addresses the issue today.

Solution
Demonstrate your company’s value proposition to make the customer’s life better.
Show where your product physically sits.
Provide use cases.

Why now
Set-up the historical evolution of your category.
Define recent trends that make your solution possible.

Market size
Identify/profile the customer you cater to.
Calculate the TAM (top down), SAM (bottoms up) and SOM.

Competition
List competitors.
List competitive advantages.

Product
Product line-up (form factor, functionality, features, architecture, intellectual property)
Development roadmap

Business model
Revenue model
Pricing
Average account size and/or lifetime value
Sales & distribution model
Customer/pipeline list

Team
Founders & Management
Board of Directors/Board of Advisors

Financials
P&L
Balance sheet
Cash flow
Cap table
The deal

The Entrepreneur’s Toolkit

Thinking about launching a new business? Then there is one book not to be missed:

Entrepreneur’s Tookit: Tools and Techniques to Launch and Grow Your New Business

from Harvard Business School Press. In this book, you will learn the following:

  1. Self-Diagnosis: Do you have the right stuff to start a business?
  2. Finding and Evaluating the Opportunity: Is it real and large enough?
  3. Organizing the Entreprise: Which form is best for you?
  4. Building a Business Model and Strategy: How they work together
  5. Writing a Business Plan: The basics
  6. Financing the Business: Where’s the money?
  7. Angels and Venture Capitalists: For serious outside equity
  8. Going Public: Adventures in the capital markets
  9. Entreprise Growth: The challenge to management
  10. Keeping the Entrepreneurial Spirit Alive: The ultimate challenge of success
  11. Harvert Time: Reaping what you have sown

This book is a must read for any new entrepreneur. You can buy it on Amazon.

Last but not least, there is a collection of business tools available on the Harvard Business Essentials companion web site, included a pro-forma financial plan template. Get your own copy!