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Concept Stage:
Business Plan: Show them you can think it through.

By Gerald Youngblood and David Mackie
Managing Partners, seedstage.com

A business plan at the concept stage should clearly explain that you have a business opportunity and a business model that shows the way to get there. In contrast to the later stages of development, it will not contain a lot of financial information.

Why It's Important
At the concept stage, a detailed business plan accomplishes two things:

1) it makes you think it through and
2) it tells an investor that you did so. It is of less value at later stages, because you already will be in the business.

How It Works
Primarily, your business plan should focus on:

1) your concept, that is, your business model,
2) your market, and
3) your team.

It should include a technology assessment for de veloping your product. This is essentially a technology balance sheet: the key technology components that are external and those that you will invent plus the technical risk that's involved. You should project what it will take to build your product and identify your first few customers. You may need to enter into partnerships, for technology or perhaps marketing, and these should be spelled out.


DO:  
  • Remember that no one expects you to be able to forecast your expenses a year out - too much can go wrong.
  • Prepare a business plan - it's to your advantage and will impress an investor.
DON'T:  
  • Forget that nine out of 10 companies fail, so your investor is looking for a 20X return.
   

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