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This question has been closed, and points have been awarded.
Business Plan For A Software Product.
Posted By: BM on 10/21/2004 2:51 AM (CST) 40 Points
I need to make a business plan for a software product. What elements should I include?

Posted by: ASVP/ChrisB Accepted Answer
10/21/2004 3:16 AM (CST)
Here's a start:

Business Plan Outline
1) Executive Summary
2) High level overview/summary of the business;
a) Outline of what the company produces, the estimated market size, names and size of the competitors, (if it is a start-up, a summary of how the need that was identified, how big is the market for the needed product and why this product solves that need).
b) Who the people are behind the deal, summary of their experience, qualifications;
c) High level financial summary, sales, forecasts, EBIT forecasts for 3-5 years, major assumptions in the financial table summarized
d) An outline of what the deal is.
e) What is the investor being asked to do and what does he get in return for his investment. This must be very clear. They have to know what is in it for them, you must be able to answer the question; “What do I get for investing in this business?” just to get him to read the rest of it.
f) NB: All of the above must be in the executive summary as professional investors will not bother to read the rest of the document if they aren’t excited by the opportunity, if they don’t understand what the deal is or what they are being asked to consider. The ES should be no longer than 3 pages.
3) Business Overview – What is the business about?
a) Vision for the business
b) Company Background – where we came from
c) Business Description – what is the business doing?
d) Product (Range, inc. accessories/packages) Offering
– what it is, how it works, how it will be packaged and sold.
4) Business Strategy
a) Industry Analysis
b) Market Entry Analysis
c) Route to Market
d) Strategic Alliances
e) Exit Opportunity
5) Marketing Plan
a) Environmental Analysis – SWOT, PEST
b) Competitive Analysis - Porter
c) Target Market Segments
d) Consumer Research
e) Channel Strategy
f) Pricing (across range/packages)
g) Value Proposition
h) Promotional Plan
6) Operational Strategy
a) Critical Success Factors
b) Major Risks and Mitigation Strategies
c) Major Milestones
7) People
a) Current Management Team
b) Key Hires, Recruitment, and Retention Strategy
8) Financials
a) Revenue Model
b) 3 Year Revenue and P/L Forecasts inc B/E analysis, DCF, IRR and ROI for investors
c) 12 Months Detailed Operating Budgets
d) Key Assumptions and Sensitivities (ref. risks per 4.b)
e) Capital Raising Requirements and Strategy inc. Investor Exit


Hope this helps. Sorry the document format indentation doesn't work well via the web...

ChrisB
 
Posted by: BM Author Response
10/21/2004 3:30 AM (CST)
The plan looks good. However I feel that It should be more pertinent towards the product instead on focusing the company.


Thanks,
 
Posted by: Squirrel* Accepted Answer
10/21/2004 5:47 AM (CST)
Briefly, in my opinion a good business plan always answers well those questions about:

- Marketing (How to be the best-seller?)
- Management (Who fight beside you in the battle field?)
- Finance (When does your money get home with his friends? How much?)
 
Posted by: W.M.M.A. Accepted Answer
10/21/2004 7:01 AM (CST)
In response to your statement about the product being the focus, you are incorrect. The market does not garner respect for a product and embrace it unless they first embrace the company.

Please remember that quality and service propositions are extremely important.

Building the plan around the company IS in fact building the plan for the product.

Perhaps you were looking for AdMark strategies? If so, you will find them within the Business Plan.

Read the Search Questioins area of the forum. I am sure you will find many answers.

Randall
WMMA
 
Posted by: NuCoPro Accepted Answer
10/21/2004 8:31 AM (CST)
I'm living in this world right now with a software startup. While ASVP's description is very comprehensive, some of the information suggested is NOT part of the Business Plan, but instead goes into a 2 page investor summary.

Keep in mind it is a BUSINESS Plan, not a Product Roadmap. While people want to know about the product, the primary concerns are: a) does the executive team have the business and industry expertise to make this happen, b) is there a demonstrated market for the product - at the proposed price point, c) how soon can they get to market, d) how difficult will it be to sell, and e) when and how do they reach the liquidity event.

I urge you to use the KHE search feature as there have been many such questions posted in the past and there is a LOT of valuable information available. Also, I STRONGLY urge you to seek out a local mentor with experience in entreprenuerial activities to provide you with guidance in this and the MANY other issues you will face.

From a fellow entrepreneur - GOOD LUCK! I would be happy to continue the dialogue with you, if you want to contact me directly via the email in my KHE profile. I've been fortunate to have lots of people helping me and this is how I can repay the favor! If you would like I could provide you with information on my Business Plan, which has been well received by the investment community.
 
Posted by: Peter (henna gaijin) Accepted Answer
10/21/2004 12:21 PM (CST)
I am going to chip in also about the business plan being business focused, not product focused. That is why it is called a 'business' plan not a 'product' plan...

I am making an assumption here - that you are getting in a trap hit by many startups. You are really focused on your product, where you need to keep in mind the business. When it comes to the marketing, the symptoms of being product focused will be that you promote features of your product, where a business focused person would be promoting what the product does for the customers.
 
Posted by: Sharon Moderator Response
10/21/2004 12:50 PM (CST)
You haven't really told us what the business plan is for. Is it for a venture capital firm, or is it just a roadmap for your own purposes, or do you need to sell friends and individual investors on your idea? All of these goals for a business plan need different issues addressed. If you are asking for money, you need to say how much and what the investors' ROI will be. If this is just for you, that info isn't necessary. Every one will want to know what you want to do once your business is successful -- in other words, how will you leave the business model you developed for a start-up?

There are lots of websites that will help you with developing a plan, but I am a fan of the Small Business Association in the US.
http://www.sba.gov/starting_business/planning/basic.html
If you aren't in the US, it is still useful, but if you are or have someone in your new co who is, then you can actually arrange for a free meeting with a mentor who has been a successful entreprenuer.

Good luck to you.

Sharon
 
Posted by: mbarber Accepted Answer
10/22/2004 1:33 AM (CST)
Mmm lots of dancing around the issue above (appropriately so) until Sharon kicked in with the 'what exactly do you want?' suggestion.

The debate is because the parameters you've offered aren't clearly defined.

If you want a business plan, focus on what the business INTENDS to do. This is the WHAT statement

Part of that includes the statement about HOW you plan to do it.

The Product plan is a separate issue. Product plans are actually part of the HOW, not the WHAT

The Business plan should also include a WHO statement - who you are, and the capabilities you have. In start up the business plan acts as a way of definig goals for each member of the team to ensure someone is doing something that needs to be done and that everyone is dong one thing the business needs achieved/actioned.

Your board meetings are where you check in on progress

If this is not a start up then I suspect you already have trouble with the initial stage of the process - defining what exactly it is you do. Unitl you work that out, even starting on a business or product plan is of little value.

So my question for you would be 'What exactly is the benefit that customers will get as a result of using the products or services you intend to make available?'

Once you have answered that you will have your Intention statement. Then work out each of the HOWs on deliverables that you need to attend to then work out WHO will do each job then work out the HOW of products.
Cut and paste the appropriate section to make your business plan.
 
Posted by: pkemper* Accepted Answer
10/22/2004 10:25 AM (CST)
This is what we use in our product business units. But note that this is a full plan, not just a business plan:

1 Executive Summary 5
2 Mission, Goals, and Initiatives 6
2.1 Mission 6
2.2 Goals/KPIs 6
2.3 High Level Operational Plan 7
3 Situation Assessment 8
3.1 Market Situation 8
3.2 Financial History 11
3.3 Historical Roadmap 13
3.4 Product Quality 14
3.5 Competitive Assessment 15
3.6 Competitive and SWOT Analysis 17
3.7 Current Mindshare 17
3.8 Current Inbound Partnerships 19
3.9 Assets in Other Business Units 19
4 Market Opportunity 20
4.1 Market Segmentation 20
5 Overall Strategy 34
5.1 Major Programs and Initiatives 34
5.2 Product Roadmap 34
5.3 Solution Offerings 36
5.4 Go Forward Competitive Assessment 36
6 Go-to-market Plans 38
6.1 Marketing Objectives/KPIs 38
6.2 Marketing Strategies 38
6.3 Target Customer Segments 39
6.4 Marketing Campaigns and Activities 39
6.5 Global Marketing Overview 43
6.6 Geo-specific supporting Go-to-Market Activities 44
7 Functional Interdependencies 46
7.1 Common Engineering Services 46
7.2 PR / Communications 46
7.3 Global Sales and Channel Partners 46
7.4 Global Alliances 46
7.5 Worldwide Services - Consulting, Support & Training 46
7.6 People Development & Growth 46
7.7 Finance / IS&T, Legal 46
8 Preliminary Financials 46
9 Monitoring of Execution 47
10 Opportunity Identification processes 48
11 Appendix 1: Competitive Feature Comparison 55
 
Posted by: peter.englund* Accepted Answer
10/23/2004 2:53 PM (CST)
If I were you I would differentiate between a marketing plan and a business plan.

A business plan is focused on identifying the reason for your existence, such as what products you intend to offer the market, the nature of the market, and the way you intend to serve this market. This is to help you to set up the business, analyses markets, identify key success factors, find out about your strength, weaknesses and so on.

Now, then you need to implement your business strategy and then you create a marketing plan, which will integrate with the business plan, and its strategy, but will in the end focus more on the tactical issues such as what needs to be done in regard of, product, place, price, promotion, and service.

So wether you need a business plan or a marketing plan is difficult to tell, but with regard to your response to Chris B it seems as you need a marketing plan.

Peter!
 
Posted by: Val (Moderator)* Moderator Response
11/2/2004 2:59 AM (CST)
Hello all. I am closing this question, since its more than 10 days old. We do this to make sure members' contributions are rewarded in a timely manner and to improve the visibility of newer questions.

Thanks, so much, for participating!

Val (Moderator)
 


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