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Business Plan Guidelines

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Executive

Summary

Entrepreneurs and VCs:

* Details can be found further in the document

Jurors

Components of evaluation

Evaluated aspects of business plan

Product/

Service Idea

Management

Team

Marketing

Implementation

of Plan

Finance Risk Overall

Impression

Business System/

Organization

Grade business plans

Give constructive feedback

Total pts based on avg. of 2 jurors

Total pts = accumulation grade & nomination pts

20 extra pts when nominated as winner by juror

1. Grade

2. Nominate

3. Feedback

+ Ranking

Top 25 Teams*

Overview of evaluation process

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Evaluation process: besides the grade evaluation, jurors can

nominate teams to increase chances for the Top 25

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Juror feedback constitutes a valuable part of the »venture» experience for

the teams. Constructive and critical feedback helps teams to further

develop their business plan.

1 Determines final ranking

3. Feedback

5 = very good

4 = good

3 = fair

2 = poor

1 = very poor

0 = not covered

2. Nominate

1. Grade

Jurors nominate teams as potential winners

A nomination adds 20 points

to the total grade given by the juror

Jurors can nominate as many teams as they wish,

but we recommend them to only nominate 1

Each business plan is graded by 2 jurors

Jurors rate each area of the business plan TOTAL GRADE

BY 1 JUROR

Sum of rates of

each area

+ nomination points

TOTAL GRADE1

Average of grades

of 2 jurors

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Management

team

1–2 pages

Product /

service

2–4 pages

Executive

summary

1-2 pages

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Highlights experience, skills and competencies of team members

The management team brings in the necessary content related skills (e.g.

technical expertise) and business acumen or is aware of current gaps

Convinces potential investors that the team unites managerial and

technological expertise

The customer need/benefit is clearly identified in detail.

Target customer is clearly identified and specified as a subset of the population

The proposed product/service has as a defined unique selling proposition and

can be patented/protected otherwise (e.g. trade secret, first mover advantage)

Gives the reader a concise and complete overview of the product/service

Highlights key topics of the business plan and guides the reader through it

Presents the product/service attractively and spark the reader’s interest

Evaluation criteria (1/3)

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Business

system/

organization

2–3 pages

Marketing*

6–8 pages

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The paying customer is clearly defined (e.g. Google end-users don’t pay for

the service, advertisers do)

The chargeable product is clearly defined (e.g. Google sells traffic,

not search results)

Strategic partnership requirements are outlined

The revenue mechanism is effective and realistic for the product/ service

Evaluation criteria (2/3)

Provides thorough understanding of markets and competitors

Market size

Market growth

Overall competition

Determines segmentation and selection of target markets

Relevant market segmentation for proposed product/service

Selection of target segment

Positioning of product vis-à-vis competition

Outlines planned marketing and sales activities (e.g. “four Ps” framework)

* Deep-dive for marketing section further in the document

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Risks

1–2 pages

Finance*

4–6 pages

Implementation

Plan

1–2 pages

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Presents plausible financial forecasts including base/worst/best case

scenarios for income statement, balance sheet and cash flow statement

Outlines plausible liquidity planning and forecasts on capital requirements

Outlines deal proposal for investors

Identifies risks and assesses their potential impact (e.g. worst case scenarios)

Develops suitable countermeasures against risks

Describes the most important activities and milestones for the development

of the business

The implementation plan is action-oriented and can realistically be executed

Highlights the interdependence of milestones and activities on critical path

The business plan is readable (also for non-expert readers) and interesting

The document is well structured, concise and consistent

The document can be established in MS Word or Powerpoint

Evaluation criteria (3/3)

* Deep-dive for finance section further in the document

Overall

Impression

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Deep-dive: Marketing Section

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Product

Price

Place

Promotion

Overall Market Size

Overall Market Growth

Overall Competition

Segmentation

Selection of target segment

Positioning in target segment

Estimate market share in segment

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Segmentation and selection

of target market

Determine your marketing

strategy

Number of potential

customers

Number of units sold

Total potential sales (CHF)

Market growth during

the last five years

Forecast for the next

five years

Most important current

and potential competitors

Strategy of competitors

SWOT1 analysis

Meaningful grouping of

potential customers

(e.g., with similar needs,

attitudes and behavior)

Match between offered

product/service and

customer needs

Financial attractiveness

and growth potential

of the segments?

Differentiation from

competition

Development of market

share and sales volume

Customers per segment

Product meets relevant

needs of customers in

the selected segments

Adjustment of product

to each target segment

Pricing strategy

Objective of pricing strategy

Market penetration

Skimming

How are customers reached

Potential outsourcing

of distribution

Means of communication

(advertising, direct

marketing, etc.)

"Unique Selling Proposition”

Overall market potential

and competition1 2 3

1 Strengths, weaknesses,

opportunities, threats

There are 3 essential steps to undertake for a good

marketing strategy

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Key questions Hints

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1

Number of (potential) customers?

Number of units sold?

Total sales in CHF in product-relevant

areas?

Analyze total market size and each

segment

Possible sources: investment banking

reports, official statistical bureaus,

specialist associations, specialist

journals, surveys

In the last five years?

Forecast for the next five years?

Forecasts regarding market growth

need to be realistic and

understandable

Most important current competitors?

Their market share?

Their strategy?

Their strengths and weaknesses?

Potential new competitors?

Can business idea be copied?

How quickly?

Possible substitute products?

An attractive market is ideally

characterized by:

Few competitors

High entry barriers

No (foreseeable) substitutes

Many equally good suppliers

Many potential customers

The overall market needs to be assessed in terms of size,

growth and competition

Competitive

Environment

Market Growth

Market Size

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2Within the overall market, attractive segments need to be

identified and approached

Which customer needs will our

product primarily satisfy?

Which customers/customer groups

are especially financially attractive?

Get to know the markets that you can

serve with your products very well

Set target to dominate first a part of

the market, in order to later expand

into neighboring segments

How is our offer differentiated from the

competition?

What additional benefits does our

product offer?

Possible additional benefits: easier to

use, greater safety, etc.

What share of market and what sales can

we probably achieve with our customers?

How many customers can we reach in

each target segment?

Convert from the competition?

How will our market share and sales

develop over time?

Be aware of the non-linear market

penetration dynamic

Be aware of the 6-12 month delay in

the sales process for expensive

products (B2B)

How to meaningfully group potential

customers with similar needs?

Segmentation is possible, e.g., by

industry, geography, purchasing power,

intensity of customer needs

Simple & feasible segmentation

Estimate Market

Shares and

Sales Volume

Position

Yourself Against

Competitors

Choose Target

Market

Segment Market

Key questions Hints

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Product

Key questions

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What price can we ask for the product?

What objective are we following with

our price strategy?

Market penetration: quick

penetration with low price?

Skimming: fewer customers at a high

price in order to later gradually

expand the target segment?

There are three approaches to pricing

Market price

Costs plus margin

Customer benefit as basis (value-

based)

Customer benefit is ideal as a basis,

costs plus margin is not recommended

As a rule, start-ups use the skimming

strategy, as higher prices can be

justified by an innovative product

Avoid price wars!

Does our product meet the relevant

needs of customers in the selected

target segments?

Do we want to adjust our product to

each target segment?

Customer needs can be defined along

three dimensions

Functional level: product attributes,

value, quality, etc.

Process level: user-friendly

transactions, easy access, etc.

Relationship level: personal service,

loyalty program, etc.

3Target segments need to be served with orchestrated

marketing strategies based on the 4P’s (1/2)

Price

Hints

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Place

Key questions Hints

Promotion

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1 One-time sales argument

How do we want to reach the customer

with our product?

Do we want to outsource distribution or

do it ourselves?

Possible criteria for selecting distribution

channel: # of potential customers,

companies vs. private individuals, need

to explain the product; upper vs. lower

price segment

Sales focus changes with time:

Convince the first five customers

through outstanding service

Convince the next fifty customers with

your first five references

Convince other customers through

segment-specific standardization

With which means of communication do

we want to convey the advantages of

our product to customers? (advertising,

direct marketing, PR, trade fairs, visits to

customers, etc.)

Is our "Unique Selling Proposition“1

precise, brief (two lines) and formulated

from the customer's perspective?

Focus your energies on fewer but more

effective means

Calculate how much advertising you can

allow for each sales completion

Differentiate between

Users

Technically-focused buyers (IT dept.)

Economically-focused buyers (e.g.,

CFO). Note: an economically focused

buyer has the last word on the budget!

3Target segments need to be served with orchestrated

marketing strategies based on the 4P’s (2/2)

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Deep-dive: Finance Section

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The financial section can be structured into two pillars

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Plausible revenue model and cost projection

Cash flow projection

(for 5 years and detailed for first 24 months)

Detailed profit & loss forecast

(for 5 years)

Balance sheet forecast

(for 5 years)

Best/base/worst case scenario

Underlying assumptions

Capital needs resulting from projected

cash flows

Planned financing rounds

Usage of funds

Current shareholder structure and

funding history

Investor shares for each financing round

Internal rate of return (IRR) for investors

Exit strategy

Financial projections11Finance requirement

& deal structure2

1 For teams in startup phase we advise to show also historical/actual financials

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Key

Components

Key aspects

Assumptions

Hints

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Cash flow, P&L and balance sheet

projections: be realistic! Startups rarely

achieve enormous growth rates, or

become a “unicorn” in no time. Be

transparent on the logic and assumptions.

Investors like to see a graph of the cash

balance

Figures should demonstrate that you

understand the major financial

implications of your business plan and

that you have not been over-optimistic

Highlight your action plan if things do not

go as planned.

What logic has been used for the sales

forecasts? Make clear it was not invented.

Provide assumptions behind costs

(production, offices, staffing, etc.)

Mention policies adopted (depreciation of

assets, number of days credit to

customers, etc.)

Provide detail behind any loan (expected

interest rate, etc.)

Plausible revenue model and cost

projection

Cash flow projection

(for 5 years and detailed for first 24

months)

Detailed profit & loss forecast

(for 5 years)

Balance sheet forecast (for 5 years)

Best/base/worst case scenario

Underlying assumptions

Integrate this in each section

(cfr. Key components)

1Key financial data and financial projections

should be provided

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Finance

Requirements

Key aspects

Deal structure

Hints

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Capital needs resulting from projected

cash flows

Planned financing rounds

Usage of funds

Mention how much money you need to

execute the plan, and when it is needed

Elaborate on the sources of this money

(e.g. Business Angels, Venture

Capitalists, Bank Finance,… or a mixture)

Specifically how will that money be used?

What is your financial safety margin if

your plans or forecasts are delayed?

Current shareholder structure and

funding history

Investor shares for each financing

round

IRR for investors

Exit strategy

Provide details on what you offer, in terms

of ownership (shares) in the company,

and for which price

Clearly mention what you expect investors

to receive in return for the risk taken

Mention details behind any banking facility

or other forms of finance you expect

Exit strategy: how do you expect investors

to get their investment and return and

when. Will this be through a trade sale,

a flotation, or a management buy-out?

2Elaborate on finance requirements and deal

structures with investors

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For further information

please take a look at our supporting material

This handbook gives you answers to the essential questions that rise

during the planning of a startup project. The goal is to establish a

professional business plan that can convince potential investors.

Numerous novice entrepreneurs have already made use of this

handbook on their way to a successful business plan. Using this manual

does not require any prior knowledge, as the business language used is

easy to understand. Two case studies demonstrate how a real business

plan is constructed.

Planen, Gründen, Wachsen Mit dem professionellen

Businessplan zum Erfolg (in German only)

Recommended book:

Further reading:

Richard Stutely: The Definitive Business Plan: The fast-track to intelligent business planning for

executives and entrepreneurs (Financial Times Series), 3rd edition, 2012

Guy Kawasaki: The Art of the Start 2.0: The Time-Tested, Battle-Hardened Guide for Anyone

Starting Anything, 2nd edition, 2015

Bart Clarysse: The Smart Entrepreneur, 2011