Primaxis Technology Ventures Inc. Business Plan Template This template outlines the specific information that Primaxis Technology Ventures looks for when making an investment decision. Please understand that these headings and questions are guidelines only and it is understood that, at an early stage, not all of the sub-headings will be appropriate and not all of the questions will be answerable. However, all of the questions in this document are relevant and the more you answer, the easier it will be to understand the value of your business concept. There is no set format for a business plan, however packaging the material as we have presented allows Primaxis to quickly understand how your opportunity fits with our investment criteria. Our investment criteria can be broken down into five categories: Technology Intellectual Property Market Management Return on Investment It is our experience that the following template properly documents these five criteria. Any questions concerning this document should be directed to the attention of Andrew Harrison.
p: 416-313-5977 f: 416-313-5218, andrew.harrison@primaxis.com Table of Contents 1.0 Executive Summary... 2.0 Business Opportunity... 2.1 Mission Statement... 2.2 Company History... 2.3 Basic Need and Company Solution... 2.4 Value Proposition... 2.5 Customers and End-users... 3.0 Technology Assessment... 3.1 Product and Technology Description... 3.2 Technology Advantage... 3.3 Intellectual Property... 3.4 Concept Risk... 4.0 Market Analysis... 4.1 Target Customers... 4.2 Market Segmentation... 4.3 TAM, SAM and SOM... 4.4 Product Adoption... 5.0 Business Strategy... 5.1 Business Model... 5.2 Business Strategy... 5.3 Channels to Market... 5.4 Key Milestones with Revenue Projections... 6.0 Sales Plan... 6.1 Marketing and Sales Strategy... 6.2 Advertising, Public Relations and Tradeshows... 6.3 Client Support... 7.0 Competition, Positioning and Strategic Advantage... 7.1 Industry Outlook... 7.2 Competitors... 7.3 Competitive Advantages... 7.4 Risk Mitigation... 8.0 Operations Plan... 8.1 Product Development Schedule... 8.2 Manufacturing/Outsourcing Plan... 8.3 Facilities and Administration Plan... 8.4 Web Presence... 9.0 Management and Key Personnel... 9.1 Core Team and Leadership Plan... 9.2 Hiring Needs... 9.3 Board Members... 10.0 Financial Projections... 10.1 Overview and key Assumptions... 10.2 Financial Projections... 10.3 Deal Summary... Primaxis Technology Ventures Inc. Page 1 of 13
Appendix A Resumes of Company Founders 1.0 Executive Summary At the end of this section, the reader should know exactly what you are going to do, how you are going to do it, why you can do it better than anyone else, why you will continue to do it better, how much money you are going to make and the funding you will require. This section should be no longer than three pages and should detail the following (See the body of the business plan for an explanation of these headings): The Basic Need and Company Solution Market Opportunity Product and Technology Value Proposition Revenue Model Channels to Market Competition Sustainable Competitive Advantage Product Roll-out Strategy Management Team Funding Requirements Financial Summary Primaxis Technology Ventures Inc. Page 2 of 13
2.0 Business Opportunity and Customer Need 2.1 Mission Statement The mission statement should sum up the goal of the company in one or two sentences. It should instantly clarify what the company is trying to achieve. 2.2 Company History When was the company incorporated? Where was it incorporated? How many employees does it have? Where are the offices/facilities? 2.3 Basic Need and Company Solution What basic customer need does your product satisfy? How is this need currently addressed and how is the current solution inadequate? What is the product or service that your company will offer? How are you addressing this customer need and how does your product overcome the limitations of other solutions? 2.4 Value Proposition What savings does your product represent in terms of time and money? How will it better position your customers against their competition? 2.5 Customers and End-users Who are your immediate target customers? How will your target customers use your product to their competitive advantage? Why do these customers need your product the most? Who will benefit from your products in the long term? Primaxis Technology Ventures Inc. Page 3 of 13
3.0 Technology Assessment 3.1 Product and Technology Description What is your product? Discuss and make clear the technology and/or unique skills behind your product, defining the relevant acronyms and terminology needed to understand the technology. What is the current state of development of your technology and product? 3.2 Technology Advantage What sustainable advantages does your technology/product offer over competing technologies? 3.3 Intellectual Property (IP) What have you patented and what will you patent? Outline your entire IP strategy in terms of what will be patented and what will be kept as a trade secret. What can you do to further secure your intellectual property position? Discuss how your IP makes the value position outlined in Section 2.3 possible. 3.4 Concept Risk What development risks does your technology have? What risks are there that your technology will be made obsolete by new technologies? What technology trends could change the specific needs of your customers? Primaxis Technology Ventures Inc. Page 4 of 13
4.0 Market Analysis 4.1 Target Customers Define, very specifically, the target customers you have chosen. Briefly mention why you have chosen them and why you think they will chose your product (real examples of customer interest). How will these customers use your product to their competitive advantage? Mention relevant trends that may affect your target market (geographic, demographic, cultural, regulatory, etc.). 4.2 Market Segmentation What other segments of the market represent a revenue opportunity? What other segments represent a strategic opportunity or lead to other market segments? What is the money potential of all of these market segments and how much will it grow in the future? Try to break down the opportunity by segment if possible. Predict the dates when you will enter these markets. The market segmentation section is sometimes referred to as your bowlingpin strategy. The bowling pins represent the market you intend to serve. The lead pin is your target market. The other pins are other market segments that can be secured only after you have knocked down your target market pin. Write this section describing each segment in the sequence that it will fall after the target pin is knocked over. 4.3 TAM, SAM and SOM Quantify the Total Available Market (TAM) available to your company. The TAM is the total value of the sector that you will be competing in. Quantify the Served Available Market (SAM) that your company can realistically service. This is the size of the market represented by your target customers. Calculate the share of the SAM that your company will try and capture. The Share of Market (SOM) can be calculated from your financial projections in Section 8.0, or can be assumed if you make reasonable, understandable assumptions. Example: Total Available Market Year 1 Year 2 Year 3 Year 4 Year 5 Size of market (in 000s) $20,500,000 $22,037,500 $23,690,313 $25,467,086 $27,377,117 Total people in market 23,400,000 23,605,022 23,605,022 23,605,022 23,605,022 Served Available Market Size of market (in 000s) $18,186 $19,550 $127,204 $137,943 $149,588 Women in our target market 20,759 20,941 126,746 127,857 128,977 Share of Market Size of served market (in 000s) $0 $2,025 $13,800 $29,314 $52,312 Pct. of served market captured 0.00% 10.36% 10.85% 21.25% 34.97% Table ** TAM, SAM and SOM Primaxis Technology Ventures Inc. Page 5 of 13
4.4 Product Adoption Has the market adopted this type of product? How long might it take for the market to accept it? What is necessary to achieve market adoption? Site historical examples of situations where a similar new technology has had to establish itself in this market. Detail how long it took, how it was marketed, and who the early adopters were. Primaxis Technology Ventures Inc. Page 6 of 13
5.0 Business Strategy 5.1 Business Model What kind of business are you and what will you become in the future? How is your business structured? Outline the sales process. What happens to the customer from the moment of contact to the end of the customer relationship? How do you make money? What is your revenue model? How are you going to increase your reach and revenues? How will you further penetrate the market? What are the major costs and how can they be controlled? 5.2 Business Strategy What is your target market and why? How are you going to position yourself in your competitive landscape? Why is that position the right one for your company and what advantages and disadvantages does it confer? Who are your strategic partners? How will they help you strengthen your business? After you secure your target market, how are you going to attack the other segments of the market? With what new products? 5.3 Channels to Market How do you get your product to the customer? How long does it take? Detail all of the partnerships and joint ventures that will get your product to market. 5.4 Key Milestones with Revenue Projections What milestones have you chosen to define the success of your model and strategy (i.e. product development, headcount, sales, etc.)? When will the milestones be met? How much money should you be making at each of these milestones? How much funding will you require and when? When will you IPO? This section is best supported by a graph, Gantt Chart or other carefully selected diagram. Primaxis Technology Ventures Inc. Page 7 of 13
6.0 Sales Plan 6.1 Marketing and Sales strategy How do you reach your target market? What are the points of contact between your company and the customer? What is the structure of your sales team? Where is your company physically located relative to your customers? Why there? How does this location help or hinder your sales efforts? How are you going to market your product effectively? What is your branding strategy? At what price point will you release your product and future products (low, mid, high)? Justify the chosen price points. What joint venture or partnership strategies will you employ to sell your product? How will you compensate the sales staff? Outline any trends that may be relevant to your sales strategy. Predict actual dates and forecast your sales. 6.2 Advertising, Public Relations and Tradeshows Who will you use as an advertising firm and why? How much will you spend? What public relations firm will you use? Why? How much will they cost? What tradeshows will you attend? What do you expect to accomplish? 6.3 Client Support What long-term service and maintenance programs are necessary? Detail plans for call centers and customer relationship management (CRM) packages. Are they in-house or outsourced? What are the costs and personal required for client support? Primaxis Technology Ventures Inc. Page 8 of 13
7.0 Competition, Positioning and Strategic Advantage 7.1 Industry Outlook What is the nature of the market you are in? Explain the relevant history and the current state of the market. What are the major competitive and technological trends in this sector? Is the competition fragmented or are there a few big players? Are the companies in this market young or old? What other technologies and products exist that answer the consumer need? How many other companies are taking your approach? Will there be more or less companies in this market in the near term or the future? What companies from other sectors could extend themselves into the space you are in? Comment on the equity performance (including P/E ratios and market capitalization) of similar companies in the market and on relevant M&A activity in the market. 7.2 Competitors Who are your direct and indirect competitors? Write a paragraph on each of them. How will these companies react to your company entering the market? How does your company plan to address each competitive threat? 7.3 Competitive Advantages What are your Sustainable Competitive Advantages? Why will you best your competition in the short term and why will you continue to do so in the future. What are the unique selling points of your solution or product? Why will these be compelling enough to convince people to buy your product over your competition? Compare and contrast your solution with your competitors. Note that a lower price, while attractive, is one of the weakest competitive advantages and should not be your only discriminator. 7.4 Risk Mitigation Describe your business risks under the headings of the technology risks, market risk and execution risks. Outline your mitigation plan for these risks. Primaxis Technology Ventures Inc. Page 9 of 13
8.0 Operations Plan 8.1 Product Development Schedule Detail the following: Products that will be released. Dates of each product release. Technologies that will be developed to support the products. Dates for each technological milestone. Product design and manufacturing plans. Short and long-term R&D plans. Other details relevant to the design and manufacture of the product. 8.2 Manufacturing/Outsourcing Plan Who will build your product? Where will it be built and why will it be built there? What equipment will be needed and how long will it take to get? What suppliers will you rely on? How will cash flow in the process? Where will the product be sent when it is manufactured? What are the shipping and receiving arrangements? How will you finance all of this? 8.3 Facilities and Administration Plan How much and what type of space will you need? How will this be financed? 8.4 Web Presence Detail your web presence. Outline e-commerce strategies. Detail outsourcing arrangements or the structure of your network and website administration team. 9.0 Management and Key Personnel Primaxis Technology Ventures Inc. Page 10 of 13
Sum up the experience and accomplishments of the team members and highlight the experience that is directly relevant to the position they hold in this company. 9.1 Core Team and Leadership Plan Who has founded the company and been hired? Give a one-paragraph profile of each person outlining his or her relevant skills and history. Reference resumes in Appendix A. 9.2 Hiring Needs What are the current deficiencies of the team? Who will you have to develop and strengthen your team? Identify key hires post-financing (by name if possible). By what dates will these people be on board? 9.3 Board Members Who is on the board of directors? Give a one-paragraph profile of each. Who is on the advisory boards? Give a one-paragraph profile of each. Primaxis Technology Ventures Inc. Page 11 of 13
10.0 Financial Projections 10.1 Overview and key assumptions What assumptions have you used to construct your financial statements? Your assumptions should be conservative, understandable and backed up by the information outlined in the body of your business plan. 10.2 Financial Projections You should show the following: Balance Sheet Income Statement Cash Flow Statement 10.3 Deal Summary You should show the following: Funding Required Valuation - In your opinion, what is the current value of your company? What percentage of your company will you give away for how much money? Prior Funding Received Future Funding Required Funding Timeframe Current Share Schedule Exit Strategies Primaxis Technology Ventures Inc. Page 12 of 13