In the context of FRC, a business plan is a document(s) that describes how the team:
Every team and “business” will have a different business plan. The business plan is a living document that will change over time. Every year or at a major milestone, the team should review the business plan and update it as needed.
In FRC there is a anecdotal, recurring pattern that seems to affect most new teams, and even some veterans. This is called the “Four Year Hurdle”. When a new rookie team is started the founding members may, at best case, be freshman in high school. That original “Class” of students has only 4 years to figure out how to build a robot, compete in the competition, and attract sponsors. Then document it all so that the next year’s team can do it all over again. This is a lot of pressure for a group of students who are still learning how to drive, do taxes, and… oh yeah build a robot. The business plan is a way to help alleviate some of that pressure.
Now… I’m not saying that the business plan is a magic fix for everything. It’s not. But it is a tool that can help you and your team. Dean Kamen, the founder of FIRST, has said:
“I’ve never had a business plan. Every project we’ve ever done was the intersection of somebody with a real need, a real passion to do something, and hustling.”
The business plan is a tool to help you and your team “hustle”. The worst time to start a business plan is when you need it. Make it a priority to start your business plan early. It will help you and your team keep on schedule and actually finish the robot on time. Knowing the startup tasks, handling some of the paperwork, and having a plan for the future will help you and your team be more successful and alleviate some of the pressure off students, parents, and mentors.
Below are some examples of the items that you may want to include in your business plan. These are just examples and are not required. You can use these as a starting point and modify them to fit your team’s needs. They are sorted by the style of business plan that they are best suited for. These all came from Indeed.com or SBA.gov and are a reference for you to use.
The following is pulled directly, word for word, from here: Business Plan Template
We have added (Parenthetical) comments where appropriate to substitute FRC terms for the example business terms.
Briefly tell your reader what your company (team) is and why it will be successful. Include your mission statement, your product or service (team’s robot or outreach impact), and basic information about your company’s (team’s) leadership team, employees (members), and location. You should also include financial information and high-level growth plans if you plan to ask for financing (sponsorship).
Use your company (team) description to provide detailed information about your company (team). Go into detail about the problems your business (team and STEM program) solves. Be specific, and list out the consumers, organization, or businesses (community, school, other stakeholders) your company (team) plans to serve (impact).
Explain the competitive advantages that will make your business (team) a success. Are there experts on your team? Have you found the perfect location for your store (workshop, practice field)? Your company (team) description is the place to boast about your strengths.
You’ll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses (other teams, sponsors, etc.) are doing and what their strengths are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now’s the time to answer these questions.
Tell your reader how your company (team) will be structured and who will run it.
Describe the legal structure of your business. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you’re a sole proprietor or limited liability company (LLC). (This is not really relevant but is a good place to note if your team is a 501c3 or other type of charitable organization)
Use an organizational chart to lay out who’s in charge of what in your company (team). Show how each person’s unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team. (this is NOT recommended as your team members are not adults and do not need to share their private info with every potential sponsor. You should outline the subteams instead and what those teams teach, their strengths and purpose)
Describe what you sell or what service you offer (We sell nothing! FRC teams are non-profit teams of high school students. However the service here is training students in industry skills, business practices and community outreach). Explain how it benefits your customers and what the product lifecycle looks like (outline the typical season structure and list any recurring outreach plans). Share your plans for intellectual property, like copyright or patent filings (include notes about FIRST and appropriate copyright if using their materials). If you’re doing research and development for your service or product, explain it in detail.
There’s no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs.
Your goal in this section is to describe how you’ll attract and retain customers (new team members, sponsors, mentors, etc.). You’ll also describe how a sale (funding transaction, signup or successful mentorship) will actually happen. You’ll refer to this section later when you make financial projections, so make sure to thoroughly describe your complete marketing and sales strategies (teams do spend money on marketing… Buttons, stickers, spirit wear, website hosting costs, etc.).
If you’re asking for funding, this is where you’ll outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next five years and what you’ll use it for.
Specify whether you want debt or equity , the terms you’d like applied, and the length of time your request will cover (teams do not operate on Loans or equity with “Shares” as is typical in a business. Monetary, Material and Labor DONATIONS only!). Give a detailed description of how you’ll use your funds. Specify if you need funds to buy equipment or materials, pay salaries (some coaches may get a stipend from state grants or school districts), or cover specific bills until revenue increases. Always include a description of your future strategic financial plans, like paying off debt or selling your business (No debt, no selling your team… Again… Teams are not a normal business).
Supplement your funding request with financial projections. Your goal is to convince the reader that your business (team) is stable and will be a financial (community impacting, STEM training) success.
If your business (team) is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now (WHAT DID WE SAY ABOUT LOANS!).
Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets (include registration, maintainence for team tools, parts purchasing, etc.). For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.
This is a great place to use graphs and charts to tell the financial story of your business (team).
Use your appendix to provide supporting documents or other materials where specially requested. Common items to include are credit histories*(no), resumes(sub-team)*, product pictures (robot pictures!), letters of reference, licenses, permits, patents, legal documents, and other contracts (notable alumni, stats on team enrollment or measurable impact).
TODO: Add lean business plan template
TODO: Add growth business plan template
TODO: Add business plan examples from the FRC community