Business Plan in the ICT industry: Excel template!

Finding a good business plan template in Excel format can be really hard, for the following reasons:

You need the right level of detail. More often than not, the templates provided by others (your corporate HQs, your boss, you name it) are much too detailed – if you work for a large company, you know what I mean. In those horrible templates, you really wonder who might ever read the hundreds and thousands of rows that try to forecast what could happen 10 years down the road….

If you are looking at an existing business, the financial projections should also take the recent past into account. Too often, the templates don’t seem to care about what happened in the last couple of years. If you haven’t analysed the recent performance of the company, how can you pretend that your 7-10 year forecast is realistic?

Forecasting ‘costs’ is hard, but forecasting ‘markets’ and ‘revenues’ is really a lot harder. One way to address this challenge is to forecast the market in two different manners: by regions / countries on one hand, and by product lines / products on the other hand. And then reconcile them so that the two projections are aligned.

Bus_Plan_Chart

Finally, the financial plan must look good. Not only it must support the story that you are trying to sell (to your management, or to investors), but it must also be visually appealing.

In the ICT industry, there are quite a lot of software and service businesses (as well as hardware, for sure), with the added charm that gross margins can be (very) high, and working capital requirements low (who doesn’t love prepayments or annual software / service fees paid upfront?). So we have reflected these salient features of the ICT industry in the template below. Business Planning Template PDF (4763 downloads)

Enjoy the template in PDF format! If you want a copy of the business plan in Excel, provided by Investaura Management Consultants, you need to register for the ‘Business Plan templates‘ package on the web side. Beside this template, the package also provide a Business Plan in Excel specifically for Telecoms operators (service providers). Check our various packages here.

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

Forecasting Telecoms Technology on the Demand and Supply sides

Recently we came across Telektronikk.

Telektronikk was the international data and telecommunications journal of the Telenor Group, presenting research, analyses and updates on industry challenges to experts, students and other readers from all over the world. Each issue was dedicated to a specific theme. Telektronikk was discontinued in 2010 after 106 years of publication. Which is a pity, because Telektronikk published great stuff. Like this publication on Telecommunications Forecasting (1308 downloads) .

More about Telektronikk, including an archive of all released volumes.

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!

The Planning ‘Fallacy’

Plans are always wrong – everything takes twice as long and costs twice as much. Why is that the case?

  • There is not enough slack built into the plan (slack is not acceptable to the management)
  • People wanted to win the project in the first place so made unrealistic assumptions (“Are these projects presented to me because they have a positive NPV, or do these projects have a positive NPV because they are presented to me”)?
  • Unexpected things happen, incl. stuff that were fully unpredictable (e.g. a Tsunami in Japan)

Plans are inaccurate, but they are not worthless. The value of planning is not so much in the plan itself, but:

  • In the communication value: aligning everyone to pull in the same direction
  • They help you better understand the opportunities, requirements, dependencies, and risks – plans are a “mental simulation” before the project get started. This helps make the project more successful (or less of a disaster if you did not have a plan).

If you want to improve your plans in a very uncertain environment, the Scenario Planning technique can help.