Business Planning, Business Plans and Venture Funding

- Business Planning -

The business planning process is used to provide the “roadmap” for your corporation. If not done, your corporation, public or private, has no rational path forward in which to invest its resources. In addition, there is no ultimate understanding of the “topography” of the market. The result is that your corporation is walking down the road with a “blindfold” on, not knowing what to do or where to invest its resources. Even if the blindfold is taken off and there are multiple paths in which to take, your corporation does not know, based on a rational planning process, which path forward will be the best for the company. There are no defined strategies or tactics that allow your company to navigate the turns or bumps in the road. In addition, there is no way to define your company and how you plan to position yourself, relative to your competitors, in the market.

The figure below outlines a business planning process that results in multiple business plans for a company to consider. For each potential investment opportunity (e.g., Business Plan), the company must consider both the Investment Amount, in dollars (y-axis), and the total Development Time (x-axis). The size of each “bubble” represents the potential return on investment, for a given investment opportunity. As an example, Business Plan 1 represents the highest return on investment for your company, but at the same time, it requires the highest amount of investment while being delivered to the market in the shortest time period. This figure outlines why your company needs to consider multiple potential investment opportunities in the business planning process and make rational decisions on the future direction of your company.

Business Planning Process – “Provides the “Roadmap”

The exercise of going through the business planning process and at the same time using this process as a tool in which to vet your company’s business ideas, resulting in a focused business plan does several things for your company. First, this process allows all business concepts and ideas to be reviewed on a level playing field. This gives each business idea and resulting business plan the ability to be presented and evaluated on its own merits. Second, this process provides the ability for the company to review each business plan on its investment requirements and return on investment. This provides a financial basis in which to evaluate all business plans. Finally, once completed it provides a corporate-level vetted roadmap in which your company can move forward to introducing its new technologies, products, or services into the market.