Business products profile will explain the company’s product or service in simple language. If the product or service is technically orientated this is essential, as it has to be readily understood by non-specialists.
Emphasize the product or service’s competitive edge. For example, is it:
• A new product?
• Available at a lower price?
• Of higher quality?
• Of greater durability?
• Faster to operate?
• Smaller in size?
• Easier to maintain?
• Offering additional support products or services?
With technology companies where the product or service is new, there has to be a clear “world class” opportunity to balance the higher risks involved.
Address whether it is vulnerable to technological advances made elsewhere.
• If relevant, explain what legal protection you have on the product, such as patents attained, pending or required. Assess the impact of legal protection on the marketability of the product.
• You also need to cover of course the price and cost of the product or service.
• If the product is still under development the plan should list all the major achievements to date as well as remaining milestones to demonstrate how you have tackled various hurdles and that you are aware of remaining hurdles and how to surmount them. Specific mention should be made of the results of alpha (internal) and beta (external) product testing.
• Single product companies can be a concern for investors. It is beneficial to include ideas and plans for a “second generation” product or even other viable products or services to demonstrate the opportunities for business growth.
Your business products profile is important to private equity firms.