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Friday, April 15, 2011

The Business Plan

At this point in the process you should have a grasp of your licensed technology, the products possibilities, market.  You will have recruited some trusted advisors and now are likely considering putting pencil to a paper to craft a business plan.

A business plan is never finalized.  It is a living document changing as NewCo changes.  The plan is often reviewed by financial institutions to help them get a sense of the technology and business.  They will learn how you think and they will see how much preparation and thought you put into the business.  If you plan to raise capital thought private channels or via a future IPO, the plan may be a great start to the offering memorandum that would be needed for the transactions.  The data can be distilled to generate your slide show for presenting to partners and potential investors.  Finally, if you forget what the business direction is, it can help you re-focus.

I have been touching on areas that would likely be included in the plan.  Your thoughts and preparation will be greatly refined as you research and prepare the final version of the document.  If your advisors are helping, you will get great feedback on the document and business as they review and comment. 

Most people never really like preparing the documents and they take a great deal of time to do well.  I have seen business plans that are nothing more than the executive summary of 5-15 pages and I have seen full business plans that are 50-100 pages for a startup business.  Just do a good job in compiling the document and make sure it is accurate.  You will find that investors and partners that read the document will check facts and ask questions based the plan content.  Spend a little extra time on the Executive Summary.  Make it especially clear to read because this is a great document to send as an early introduction to an investor or partner and it really helps them understand the business idea.  You can even include the slide presentation with the executive summary when sending it for their review.  Then follow up with a call to go over the slides and discuss the business opportunity.

Make sure you understand the technology! If you do not, ensure you have a technical person (staff or advisor) that will work with you in writing the document and in presenting to investors and partners.  This technical person is likely going to need to go on the road to many meetings with you until you feel comfortable enough to discuss the technology on your own; including answering questions.

I have provided an expanded version of a Table of Contents for a business plan with a medical slant; see below.  Whether it is a medical or a technology business the contents will be quite similar.  Your real objective is defining the business opportunity in a way that an investor or partner will understand it. 

I will discuss parts of the business plan in more detail in the future.  At least this discussion provides a bit of an outline which helps guide you in the preparation.  As always, comments and suggestions are welcome. 

You can follow Taffy Williams on Twitter by @twilli2861 and you can email me with questions at twilli2861@aol.com and my company website is at http://www.ColonialTDC.com .



NewCo
Table of Contents
                                                                                                                                                                                                                                                     Pages
Executive Summary........................................................................................................................................................ #
Core Technology....................................................................................................................................................... ..... #
General Background.................................................................................................................................................... #
NewCo's Technology.................................................................................................................................................... #
Background............................................................................................................................................................ #
Overview................................................................................................................................................................. #
Supporting Data...................................................................................................................................................... #
Clinical Trials............................................................................................................................................................ #
NewCo's technology 2.................................................................................................................................................. #
Background............................................................................................................................................................ #
Overview................................................................................................................................................................. #
Applications and Supporting Research Data............................................................................................................. #
NewCo's Technology 3.................................................................................................................................................. #
Technology Summary.................................................................................................................................................... #
Ongoing Research and Development........................................................................................................................ #
Disease Targets............................................................................................................................................................ #
Disease 1................................................................................................................................................................. #
Disease 2................................................................................................................................................................. #
Disease 3................................................................................................................................................................. #
Disease 4................................................................................................................................................................. #
Disease 5................................................................................................................................................................. #

Products and Research Pipeline…………………………………………………………………………………………………………………………….……………………  #
Development Timeline and Milestones...................................................................................................................... #
Product 1..................................................................................................................................................................... #
Product 2..................................................................................................................................................................... #
Competition and Competitive Advantages.............................................................................................................. #
NewCo's Technology.................................................................................................................................................... #
Partnerships…………………………………………………………………………………………………………………………………………..…………………………  #
Intellectual Property.................................................................................................................................................. #
Facilities…………………………………………………………………………………………………………………………………………………………………………….  #
Management................................................................................................................................................................ #
Appendices..................................................................................................................................................................... #
Appendix A – Grants and Use of Proceeds...................................................................................................................... #
Appendix B - NewCo's technology 1 Technical Description............................................................................................... #
Appendix C - NewCo's technology 2 Technical Description............................................................................................... #
Appendix D - NewCo's Technology 3 or Drugs Currently Under Development.................................................................. #
Appendix E - References................................................................................................................................................. #
Projected Cash Expenditures               ……………………………………………………………………………………….……………………………………………   #    Product Sales - Estimates and Market Assumptions …………………………………………………………..………………………………….……………    #

2 comments:

  1. This is a good outline. I've used a similar outline in the past when writing plans for biotech start ups. The only minor suggestion I would have is to include some market potential information up front, but only in summary form. The details of your market analysis can go towards the back or as an appendix.

    The other important addition is to add a section on the clinical and regulatory path (and corresponding budget). As much as an investor wants to know the history of the technology, the investor may be more interested in the path forward, since that represents future cash outlays.

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  2. Thanks for writing such an informative and useful blog. The article includes the lot of important points about the startup business plans.Your points will help a lot.You really did a great work. Find more at:
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