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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:
  1. Entrepreneurial Readiness Survey
  2. Risk Readiness Survey
  3. Venture Readiness Model
  4. Business Plan Readiness Survey
  5. Venture Valuation
  6. 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

 

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  Entrepreneurial Readiness
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