Question:
- • Does your business plan address critical risk-related issues?
- • Where
are the strength and weakness in your business plan?
- • Does your business plan meet investor
expectations?
Description: The
Business Plan Readiness Survey
is an assessment tool to analyze business plans from an investor’s perspective.
The
Business Plan Readiness Survey is
not designed to cover every detail that should
be included in a business plan. It is designed to cover the information that investors
look for in evaluating the
risk in a business venture
opportunity. The
Business Plan Readiness Survey allows the entrepreneur to score the business
plan from two perspectives. One perspective simply evaluates whether the information
suggested is addressed or not. The second perspective allows the entrepreneur to
assess the quality of the information compared to the investor’s expectation.
Purpose: The
Business Plan Readiness Survey provides a structured methodology to evaluate
the executive summary and the business plan from an investor’s perspective. The
structure consists of 5 risk factors critical to an investment decision: 1) Execution
Risk, 2) Product Risk, 3) Market Risk, 4) Management Risk, and 5) Financial Risk.
The tool provides a quantitative and qualitative method for analyzing
each of these risk factors by analyzing: 1) presence of required content, and 2)
quality of the content. The final scores for each risk factor provide an overview
of the strengths and weaknesses of the business plan from an investor’s perspective
and where the entrepreneur should concentrate resources to improve the business
opportunity.
Directions: The assessment provides a menu of responses to each
question ranging from poor, fair, good, very good, to excellent. If the question
is not addressed, the scorer should enter “poor.” All other responses will reflect
the scorer’s familiarity and experience with evaluating high-performance, venture
funding-backed business opportunities. Entrepreneurs are strongly encouraged to
get an “outsider” review from a knowledgeable expert who can provide an unbiased
review.
Score: A score is generated for each of the risk areas as well
as the overall plan. A score of 90% or higher is excellent while 80%, 70%, 60%,
50% correspond with very good, good, fair, and poor respectively. Investors would
expect scores 80% or higher in all risk categories as well as the overall score.
A score below 80% in any single risk category would probably disqualify the plan
for investor consideration.
Readiness Level Tools: The
Business Plan Readiness Survey
is one of several tools to assist entrepreneurs and investors in evaluating the
status, quality, and value of a startup or early stage ventures. Database support
for these tools are based upon national venture capital funding averages by stage
of development, generally expected investor rates of return, and expertise gained
from direct interaction with hundreds of startup and early-stage angel and venture
capital financed business ventures. The recommended sequence for using the
Readiness
Level Tools is as follows:
- Entrepreneurial Readiness Survey
- Risk Readiness Survey
- Venture Readiness Model
- Business Plan Readiness Survey
- Venture Valuation
- Capitalization Table.
The Entrepreneurial Readiness Survey is FREE so give it a try, or click here to subscribe to the full Readiness Level Tool Set