The art of the one page business plan

We had gathered together the three co-founders for a review of the draft investor pitch. This was not long after we started Duet and we were advising on the Series A raise for this deep tech business. What should have been a routine funding preparation meeting turned out to be anything but. It was an eye-opener for us.

The CEO, who had put the draft together, spread the slides out on the meeting table and started to walk us through. By slide 5, the other co-founders were starting to ask probing questions, not directed at us, but at their colleague. By slide 8, they were clearly not happy with how their business was being positioned, in particular the vision they were supposed to share, and the plan for scaling.

It quickly became clear that this team had fallen out of alignment on some really basic elements of the business strategy. In fact, the very act of reviewing the draft pitch was the first time in several weeks that the founders had sat down together to review their plans. It became a heated debate, but nevertheless quite cathartic in flushing out the business model - although at the cost of several weeks delay as they worked and reworked the ingredients.

The fact is that for many early stage businesses, particularly between the later Seed rounds and the first institutional (VC) investment, the picture is constantly evolving as the business model is nailed down in preparation for early scaling. Everyone is working hard to validate the key business assumptions, especially around product/market fit and the go to market strategy. Huge amounts are being learned from early adopters, sometimes taking the business back several steps before going forward again, and in more extreme cases requiring a more disruptive pivot. This is all very routine in an early stage business, but can sometimes leave the top team out of synch when things are developing quickly.

Since that early experience we have urged pitch teams to take a ‘time out’ before setting about the investor deck. We give them a simple challenge to answer two ‘alignment' questions before they begin drafting the pitch itself:

1. What is our Vision for this company?

2. How are we going to achieve it?

These questions, especially the second one, can be meaty and complex if you try to dig too deep, so we need a simple method to capture the answers at a high level. We want an approach that allows us just to focus on the key points, otherwise it’s too easy to get lost in the weeds.

Let’s take each question in turn, starting with what should be the easy one:

What is our Vision for this company?

The Vision question is a real 30,000 ft question. We suggest just writing down a few sentences to describe the BIG DREAM. This shouldn't be difficult. It's probably why the team formed in the first place but it has to be checked, just in case there has been an unnoticed divergence.

The Vision is often the right place to start when you meet an investor, so it's absolutely crucial. As Eric Paley, Managing Partner at the Founder Collective (@epaley) so eloquently puts it, start with a splash, [this is] the biggest statement you can make about your company’s impact in the future. The message from the outset should be “If we do our job right, we will completely change the way…!”

Whatever you do don't just assume you are all going to give the same answer if an investor asks this question. You may not be asked when all together! Make sure you are 100% aligned and be prepared to have this debate behind closed doors first, just in case!

How are we going to achieve it?

Now we need to come down to 10,000 ft, but definitely not ground level! We still need to keep this light. Fortunately, there are some proven methods we can adopt here to make the task achievable, and dare I say, fun!

The key is brevity, knowing the right questions to ask and keeping the answers short. When you have finished it should take no more than one page of A4, font size 12! A really neat approach is to use a Business Model Canvas as this provides a very simple and intuitive layout, or you can just make a list. Here are the questions, clustered for context:

"What is our value proposition?", "Who are our customers?", and "How will we interact with them?"

"What are the key initiatives?", "Who are our key partners?", and "What resources are required to take us to the next stage?"

Finally, "How much will this cost?" and "How much will we make (Revenue & Profit)?"

The Business Model Canvas is described in the best-selling book Business Model Generation by Alexander Osterwalder. Many examples of how to apply the canvas are available online and it's been used by 1000's of companies. The beauty of the canvas is its simplicity - you're not trying to write some gargantuan business plan that will be out of date by the time you have your next customer meeting.

Remember, at this stage you are not yet writing your investor slides, you are creating a one-page internal document that can be shared with other employees, the Board, and your professional advisers. Don't try and make it perfect or cast in stone. It's a stake in the ground about how you see the business today. It will evolve - and should do - as you gain more customer feedback, refine your approach, and start to scale.

Operationally, there are also huge benefits in having this simple summary to check-point where you are, right through Growth stage. If you are resourcing an activity that isn’t on the canvas ask ‘Why are we doing this?’ If the canvas is loaded up with all sorts of disparate information and has simply become a catch-all, ask ‘Where is our real focus?’.

And when sitting down to write the investor pitch, this becomes your key reference document. It contains the essence of your business plan that will help you describe everything from your 'go to market strategy' to the 'use of funds', all from one sheet of paper. Most importantly, it will reflect the combined understanding of where you are all headed together.

In our upcoming second article we will dig into the creation of the investor pitch. In the third and final article in the series we will discuss the pitch meeting itself.

About the author: John Hall is CEO and co-founder of Duet Partners, a corporate finance firm that provides specialist funding support to high growth technology companies. His 30-year tech career began with major US semiconductor and software companies, and was based in the Valley during the late '90's. Before Duet he was CEO of a VC-backed consumer electronics company, sold in 2009 following several rounds of capital raising. In the past 10 years he has advised dozens of founders on the startup to scaleup journey and is a retained Board advisor to a number of UK technology companies.