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Private Equity Firm Business Plan Template

Written by Dave Lavinsky

Writing a Successful Business Plan For Your Private Equity Firm Business + Template

If you’re looking to start or grow a private equity firm business, you need a business plan. Your plan will outline your business goals and strategies, and how you plan on achieving them. It will also detail the amount of funding you need, and if needed, present a case to investors and lenders regarding why they should invest in your business.

In this article, we’ll explain why you should invest the time and energy into creating a private equity firm business plan, and provide you with a private equity firm business plan template that includes an overview of what should be included in each section.

Why Write a Business Plan For a Private Equity Firm Business?

There are many reasons to write a business plan for a private equity firm company, even if you’re not looking for funding. A business plan can help you see potential pitfalls in your business strategy, as well as identify opportunities you may not have considered. It can also help you track your progress and adjust your plans as needed.

That said, if you are looking for funding, a business plan is essential. Investors and lenders want to see that you have a solid understanding of your industry, your customers, and your competition. They also want to know that you have a realistic view of your financial situation and how much money you’ll need to get started.

 

How To Write a Business Plan For a Private Equity Firm Business

While every business plan is different, there are 10 essential components that all private equity firm business plans should include:

  1. Executive Summary
  2. Company Description
  3. Industry Analysis
  4. Customer Analysis
  5. Competitor Analysis
  6. Marketing Plan
  7. Operations Plan
  8. Management Team
  9. Financial Plan
  10. Appendix

Keep in mind that you’ll need to tailor this information to your specific type of private equity firm business, but these 10 components should be included in every plan.

Executive Summary

The executive summary is the first section of your business plan, but it’s often written last. This is because it provides an overview of the entire document.

In the executive summary, briefly explain what your business does, your business goals, and how you plan on achieving them. You should also include a brief overview of your financial situation, including how much money you’ll need to get started.

Company Description

The next section of your private equity firm business plan is the company description, where you’ll provide an overview of your business.

Include information about your:

  • Company Overview
  • Success Factors & Accomplishments To Date
  • How & When Incorporated

With regards to the company overview, here you will document the type of private equity firm company you operate. For example, a private equity firm company description might look something like this:

Company Overview

Summit Capital Partners is a new Private Equity Firm serving customers in Johnson City, TN. We are a local private equity firm. There are no high-quality local private equity firms in the area, which positions us uniquely to meet the specific needs of businesses within our community. Our commitment to fostering growth and driving success for our clients sets us apart as a premier partner for businesses looking to achieve their strategic objectives.

At Summit Capital Partners, we offer a comprehensive suite of services designed to address the myriad challenges and opportunities businesses face today. Our offerings include Strategic Planning and Operational Improvement, designed to enhance efficiency and effectiveness at all levels of the organization. Financial Restructuring and Optimization services are tailored to improve financial health and ensure sustainability. Our Mergers and Acquisitions (M&A) Advisory service provides expert guidance through complex transactions, while Talent Management and Leadership Development are focused on cultivating the human capital essential for success. Additionally, we specialize in Market Expansion and Growth Strategies, helping businesses to scale and thrive in new markets.

Based in Johnson City, TN, Summit Capital Partners is strategically positioned to serve the businesses within our local community. Our deep understanding of the local market, combined with our expansive expertise, enables us to deliver tailored solutions that drive real results for our clients.

Summit Capital Partners is uniquely qualified to succeed for several reasons. Our founder brings valuable experience from previously running a successful private equity firm, ensuring that we have the leadership necessary to guide our clients to success. Additionally, we offer superior market expansion and growth strategies compared to our competition, along with a broader range of private equity firm services, setting us apart as the go-to partner for businesses seeking comprehensive, effective solutions.

Since our founding on January 6, 2024, Summit Capital Partners has made significant strides as a newly established S Corporation. Our accomplishments to date include designing our logo, developing our company name, and securing a prime location for our operations. These foundational steps underscore our commitment to building a solid infrastructure from which to support our clients’ success.

This is just an example, but your company description should give potential investors a clear idea of who you are, what you do, and why you’re the best at what you do.

Industry Analysis

The next section of your business plan is the industry analysis. In this section, you’ll need to provide an overview of the industry you’re in, as well as any trends or changes that might impact your business.

Questions you will want to answer include:

  • What is the overall size of the private equity firm industry?
  • How is the industry growing or changing?
  • What are the major trends affecting the private equity firm industry?

For example, your industry analysis might look something like this:

The private equity firm industry in the United States is currently thriving, with a total market size of over $3 trillion. This industry has been experiencing steady growth over the past decade, with an average annual growth rate of approximately 8%. With the increasing number of high-net-worth individuals and institutional investors looking for higher returns on their investments, the private equity firm industry is expected to continue to expand in the coming years.

One of the key trends in the private equity firm industry is the rise of middle-market private equity firms, which focus on investing in small to medium-sized companies. These firms have been gaining popularity among investors due to their ability to generate attractive returns by actively managing and growing their portfolio companies. This trend bodes well for Summit Capital Partners, as a new private equity firm serving customers in Johnson City, TN. By targeting the middle-market segment, Summit Capital Partners can capitalize on this growing trend and attract investors looking for opportunities in this space.

In addition to the increasing demand for middle-market private equity firms, another trend in the industry is the growing interest in impact investing. More investors are seeking to align their investment strategies with their values by investing in companies that have a positive social or environmental impact. Summit Capital Partners can differentiate itself in the market by focusing on impact investing and attracting socially conscious investors who are looking to make a difference while also earning a return on their investments. With the industry trends favoring growth and innovation, Summit Capital Partners is well-positioned to succeed in the competitive private equity firm industry.

This is just an example, but your industry analysis should give potential investors a clear idea of the overall industry, and how your company fits into that industry.

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Customer Analysis

The next section of your private equity firm business plan is the customer analysis. In this section, you’ll need to provide an overview of who your target customers are and what their needs are.

Questions you will want to answer include:

  • Who are your target customers?
  • What are their needs?
  • How do they interact with your industry?
  • How do they make purchasing decisions?

You want a thorough understanding of your target customers to provide them with the best possible products and/or services. Oftentimes, you will want to include the specific demographics of your target market, such as age, gender, income, etc., but you’ll also want to highlight the psychographics, such as their interests, lifestyles, and values.

This information will help you better understand your target market and how to reach them.

For example, your customer analysis might look something like this:

We will target high-net-worth individuals and families in Johnson City, TN, who are seeking to diversify their investment portfolios through private equity opportunities. These local residents often have substantial disposable income and a keen interest in high-return investments. Our tailored financial strategies will appeal to those looking to maximize their wealth while minimizing risk.

Local business owners and entrepreneurs will also be key customers. They will benefit from our expertise in leveraging capital to fuel business expansion, acquisition, and innovation. We will provide them with the financial backing and strategic guidance needed to scale their operations effectively.

We will also focus on institutional investors such as pension funds, endowments, and family offices. These entities will be looking for robust investment opportunities to ensure long-term financial health and growth. We will tailor our investment strategies to meet their stringent requirements for risk management and return on investment.

Retirees and pre-retirees in the area will form another important customer segment. Seeking stable yet lucrative investment options for their retirement funds, they will find our private equity offerings particularly attractive. Our customized plans will help them achieve their financial goals during and after retirement.

In summary, your customer analysis should give potential investors a clear idea of who your target market is and how you reach them.

Competitor Analysis

The next section of your business plan is the competitor analysis. In this section, you’ll need to provide an overview of who your major competitors are and their strengths and weaknesses.

Questions you will want to answer include:

  • Who are your major competitors?
  • What are their strengths and weaknesses?
  • How do they compare to you?

You want to make sure that you have a clear understanding of your competition so that you can position yourself in the market. Creating a SWOT Analysis (strengths, weaknesses, opportunities, threats) for each of your major competitors helps you do this. 

For example, your competitor analysis might look something like this:

Summit Capital Partners’s competitors include the following companies:

Alexis Greene – Foundation Realty Group

Alexis Greene – Foundation Realty Group offers a wide range of real estate services, including residential and commercial property sales, leasing, and property management. Their price points vary depending on the property type and location, generally ranging from mid-market to luxury segments.

The company generates significant revenues, although specific figures are not disclosed. They are headquartered in Johnson City, TN, and serve the surrounding areas, including Kingsport and Bristol.

Their key strengths include a strong local presence and a highly experienced team. Weaknesses may include limited geographical reach and a focus primarily on real estate rather than broader investment services.

Evans & Evans Real Estate

Evans & Evans Real Estate provides services such as residential and commercial property sales, property management, and real estate investment consulting. Their price points are competitive, catering to both budget-conscious buyers and high-end clientele.

Revenues are robust, driven by a diverse portfolio of services. The company is based in Johnson City, TN, and extends its services to nearby regions such as Elizabethton and Greeneville.

Key strengths include a comprehensive service offering and strong customer relationships. However, their focus on real estate might limit their appeal to clients seeking diversified investment opportunities.

David & Rachel Moody-Livingston

David & Rachel Moody-Livingston specialize in real estate sales, particularly in the luxury residential segment. They also provide property management and investment advisory services. Their price points are relatively high, reflecting their focus on upscale properties.

Their revenue streams are substantial, largely due to high-value transactions. They operate from Johnson City, TN, with a client base that spans the Tri-Cities area.

Their primary strengths lie in their niche expertise and personalized service. A key weakness is their limited focus on the luxury market, which might not appeal to a broader audience.

Your competitor analysis should give potential lenders and investors a clear idea of who your major competitors are and how you compare to them.

Marketing Plan

The next section of your business plan is the marketing plan. In this section, you’ll need to provide an overview of your marketing strategy and how you plan on executing it.

Specifically, you will document your “4 Ps” as follows:

  1. Products/Services: Here is where you’ll document your product/service offerings.
  2. Price: Detail your pricing strategy here.
  3. Place: Document where customers will find you and whether you will use distribution channels (e.g., partnerships) to reach them.
  4. Promotion: Here you will document how you will reach your target customers. For instance, private equity firm businesses often reach new customers via promotional tactics including advertising and online marketing.

For example, your marketing plan might look something like this:

Products, Services & Pricing

Summit Capital Partners specializes in offering a range of services designed to enhance business performance and growth. One of the primary offerings is Strategic Planning and Operational Improvement, which focuses on creating detailed roadmaps for businesses aiming for long-term success. The average selling price for this service is $50,000. This service includes comprehensive assessments and actionable strategies to optimize business operations, reduce costs, and increase efficiency.

Another key service is Financial Restructuring and Optimization. This involves evaluating and reshaping a company’s financial structure to ensure sustainability and profitability. With an average selling price of $75,000, this service aims to address debt management, capital allocation, and overall financial health.

Mergers and Acquisitions (M&A) Advisory is another critical service provided. Priced at an average of $100,000, this service offers expert guidance through the complexities of mergers, acquisitions, and divestitures. Clients can expect comprehensive due diligence, valuation, negotiation, and integration support to ensure successful transactions.

Talent Management and Leadership Development services are also offered to help organizations build strong leadership teams and cultivate a productive workforce. At an average selling price of $40,000, this service includes executive coaching, leadership training, and talent acquisition strategies tailored to the unique needs of each client.

Finally, Market Expansion and Growth Strategies are vital for businesses looking to enter new markets or expand their presence in existing ones. This service, priced at an average of $60,000, encompasses market research, competitive analysis, and strategy formulation aimed at driving growth and capturing new opportunities.

Promotions Plan

Summit Capital Partners employs a multi-faceted promotional strategy to attract customers. Our online marketing efforts include a robust website that offers detailed information about our services, success stories, and team expertise. This is complemented by a strong presence on social media platforms such as LinkedIn, Twitter, and Facebook, where we share industry insights, company news, and engage with our audience.

We invest in search engine optimization (SEO) to ensure our website ranks highly on search engines when potential clients search for private equity services in Johnson City, TN. Additionally, we use targeted online advertising, including Google Ads and social media ads, to reach a broader audience.

Content marketing plays a significant role in our strategy. We publish high-quality blog posts, whitepapers, and case studies that demonstrate our expertise and provide value to our clients. This content not only drives traffic to our website but also establishes us as thought leaders in the private equity industry.

We also leverage email marketing to nurture relationships with potential clients. By offering a monthly newsletter that includes market analysis, investment tips, and company updates, we keep our audience informed and engaged.

Networking and relationship-building form the backbone of our offline promotional tactics. We participate in local business events, industry conferences, and networking groups to meet potential clients and partners. Additionally, we host exclusive events and seminars to showcase our expertise and provide a platform for discussions on relevant industry topics.

Public relations efforts, including press releases and media engagements, help us build credibility and increase brand awareness. We aim to secure features in reputable financial publications and local business journals to reach a wider audience.

Lastly, we rely on referrals and word-of-mouth from satisfied clients. We incentivize referrals through a structured referral program, rewarding clients who recommend our services to others. By consistently delivering excellent results, we create a positive reputation that encourages clients to spread the word about Summit Capital Partners.

As you can see, your marketing plan should give potential investors a clear idea of your marketing objectives, strategies, and tactics.

Operations Plan

The next section of your business plan is the operations plan. In this section, you’ll need to provide an overview of your company’s day-to-day operations and how they will be structured.

Questions you will want to answer include:

  • What are your company’s daily operations?
  • How are your company’s operations structured?

Your operations plan should be detailed and concise. You want to make sure that potential investors have a clear understanding of your company’s day-to-day operations and how they are structured.

You will also include information regarding your long-term goals for your operations and how you plan on achieving them.

For example, your operations plan might look something like this:

To ensure the success of Summit Capital Partners, there are several key day-to-day operational processes that we will perform:

  • Deal Sourcing: Continuously identify and evaluate potential investment opportunities through networking, market research, and industry connections.
  • Due Diligence: Perform thorough due diligence on prospective investments, including financial analysis, market assessment, and risk evaluation.
  • Portfolio Management: Monitor and manage the performance of portfolio companies, providing strategic guidance and support to drive growth and profitability.
  • Investor Relations: Maintain strong relationships with investors, providing regular updates on fund performance and addressing any queries or concerns.
  • Financial Reporting: Prepare and review financial reports, ensuring accuracy and compliance with relevant regulations and standards.
  • Compliance: Ensure all operations and transactions comply with legal and regulatory requirements, including SEC regulations and investor agreements.
  • Capital Raising: Develop and execute strategies to raise capital from institutional and individual investors, including creating marketing materials and conducting presentations.
  • Market Analysis: Stay informed about market trends, economic conditions, and industry developments to make informed investment decisions.
  • Operational Efficiency: Continually evaluate and improve internal processes to enhance efficiency, reduce costs, and maximize productivity.
  • Risk Management: Identify, assess, and mitigate risks associated with investments and operations to protect the firm’s assets and reputation.
  • Networking: Build and maintain relationships with industry professionals, advisors, and other stakeholders to support business development and deal flow.
  • Team Management: Lead and manage the firm’s team, fostering a collaborative and high-performance culture that aligns with the firm’s goals and values.

Your operations plan should give readers a clear idea of your company’s day-to-day operations, how they are structured, and your long-term goals for the company.

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Management Team

The next section of your business plan is the management team. In this section, you’ll need to provide an overview of your management team and their experience.

Questions you will want to answer include:

  • Who is on your management team?
  • What are their qualifications?
  • What is their experience?

Your management team ideally includes individuals who are experts in their respective fields. You want to make sure that lenders and investors have a clear understanding of your management team’s qualifications and experience, and feel they can execute on your plan.

For example, your management team might look something like this:

Summit Capital Partners management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Ava Brown, President

Ava Brown has a proven track record of success and has previously managed a private equity firm with outstanding results. Her leadership and strategic acumen have been pivotal in driving growth and achieving business objectives. With a wealth of experience in private equity, Ava brings a deep understanding of investment strategies, risk management, and operational improvement. Her ability to identify and capitalize on market opportunities makes her an invaluable asset to Summit Capital Partners.

Your management team should give potential lenders and investors a clear idea of who is on your team and how their qualifications and experience will help your company succeed.

Financial Plan

The final core section of your business plan is the financial plan. In this section, you’ll need to provide an overview of your company’s financials.

Questions you will want to answer include:

  • What are your company’s projected revenues?
  • What are your company’s projected expenses?
  • What is your company’s projected growth rate?
  • How much funding do you need and for what purposes? 

Your financial plan should give potential investors a clear understanding of your company’s financials. While you may include a summary of this information in this section, you will include full financial statements in the appendix of your business plan.

For example, your financial plan might look something like this:

To accomplish our growth goals, Summit Capital Partners needs $453,000 in funding. Key uses of this funding will be as follows:

Capital Investments
Location Buildout $100,000
Furniture $10,000
Equipment, Machines and Computers $20,000
Non Capital Investments
Working Capital $200,000
Initial Rent/Lease (for 3 months) $6,000
Staff Salaries (for the first 3 months) $100,000
Initial Marketing and Advertising $10,000
Supplies $2,000
Insurance $5,000

Below is a summary of your financial projections. If/when you change the Revenue Assumptions, Cost Assumptions, and/or Other Assumptions, the results below will change.

FY 1 FY 2 FY 3 FY 4 FY 5
Revenues $6,183,278 $6,695,440 $7,250,024 $7,850,545 $8,500,807
Direct Expenses $2,934,451 $3,083,948 $3,241,060 $3,406,177 $3,579,706
Gross Profit $3,248,827 $3,611,492 $4,008,964 $4,444,367 $4,921,101
Gross Profit (%) 52.5% 53.9% 55.3% 56.6% 57.9%
Other Expenses $97,085 $100,030 $103,065 $106,192 $109,414
EBITDA $3,151,741 $3,511,461 $3,905,898 $4,338,175 $4,811,686
Depreciation $26,000 $26,000 $26,000 $26,000 $26,000
Amortization $0 $0 $0 $0 $0
Interest Expense $45,300 $45,300 $45,300 $45,300 $45,300
Income Tax Expense $1,078,154 $1,204,056 $1,342,109 $1,493,406 $1,659,135
Net Income $2,002,287 $2,236,105 $2,492,488 $2,773,468 $3,081,251

This is just an example, but your financial plan should give potential investors a clear idea of your company’s financial projections.

Appendix

The final section of your business plan is the appendix. In this section, you’ll need to provide any additional information that was not included in the previous sections.

This may include items such as:

  • Full financial statements
  • Resumes of key management team members
  • Letters of reference
  • Articles or press releases
  • Marketing materials
  • Product information
  • Any other relevant information

By including this information in the appendix, you are allowing potential investors and lenders to learn more about your company.

 

Conclusion

In summary, writing a private equity firm business plan is a vital step in the process of starting and/or growing your own business.

A business plan will give you a roadmap to follow. It can also help you attract investors and partners.

By following the tips outlined in this article, you can be sure that your business plan will be effective and help you achieve your goals.
 

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