268 Business Models and Business Plans The purpose of a business plan is to describe and communicate a for-profit or non-profit project and how it can be implemented, either inside or outside an organization. The motivation behind the busi- ness plan may be to “sell” a project, either to potential investors or internal organizational stakeholders. A business plan may also serve as an implementation guide. In fact, the work y ou may have done designing and thinking through your own business model is the perfect basis for writing a strong business plan. We suggest giving business plans a five-section structure: The Team, The Business Model, Financial Analysis, Exter- nal Environment, Implementation Roadmap, and Risk Analysis. The Team One business plan element that venture capitalists particularly emphasize is the management team. Is the team experienced, knowl- edgeable, and connected enough to accomplish what they propose? Do the members have successful track records? Highlight why your team is the right one to successfully build and execute the business model you propose. The Business Model This section showcases the attractiveness of the business model. Use the Canvas to provide readers with an immediate visual portrait of your model. Ideally, illustrate the elements with drawings. Then, describe the Value Proposition, show evidence of customer need, and explain how you will reach the market. Use stories. Highlight the attractiveness of your target segments to pique the reader’s interest. Finally, describe the Key Resources and Activities needed to build and execute the business model. Financial Analysis This is traditionally an important business plan component that attracts much attention. You can make pro forma calculations based on your Canvas Building Blocks and estimate how many customers can be acquired. Include elements such as breakeven analysis, sales scenarios, and operating costs. The Canvas can also help with capital spending calculations and other implementation cost estimates. Total cost, revenue, and cash flow projections determine your fund- ing requirements. External Environment This section of the business plan describes how your business model is positioned with respect to the external environment. The four external forces covered earlier (see p. 201) provide the basis for this descrip- tion. Summarize your business model’s competitive advantages. Implementation Roadmap This section shows the reader what it will take to implement your business model and how you will do it. Include a summary of all projects and the overarching milestones. Outline the implementation agenda with a project roadmap that includes Gantt charts. Projects can be derived directly from your Canvas. Risk Analysis In closing, describe limiting factors and obstacles, as well as critical success factors. These can be derived from a SWOT analysis of your business model (see p. 216). bmgen_final.indd 268 6/15/10 6:01 PM