Business Plan Basics By William CateFew business plans are well written. It's why reviewers rarely read beyond
first page of
Executive Summary. It's why Venture Capital Firms can review over ten thousand business plans and fund only one.
Since
DotCom Bubble burst, professional money's Prime Directive is "Cashflow Now." The corollary to this Directive is that
equity investment should result in an asset worth a multiple of its present value, within 3-5 years. Your business plan must credibly address these investor needs to be taken seriously.
Your two-page Executive Summary, using simple declarative sentences, should excite
reader and answer these questions. 1. What Do You Have? 2. What Do You Want? 3. If You Had What You Want, What Would be
Result? 4. What Are You Willing to Give Up to Get What You Want?
The purpose of your 30-50 Page Business Plan is to make your proposal credible to investors. The secret to credibility is being specific. Focus on proving that you have what you claim to have. Explain, beyond reasonable doubt, why
outcome of
investment that you project in your Executive Summary will be
outcome in reality, if
Venture Capitalists risk money with your company. Your commitment to your company is essential to your business plan's credibility. If you aren't at risk, few Venture Capitalists are willing to put themselves at risk for your company's success.
Life is risk. Any business proposal has inherent risks. Acknowledge
risks involved in your business plan. Call them "challenges," if you like. But, a business plan without risk acknowledgement isn't credible.
Avoid padding. An investor isn't interested in
fact that you play tennis on weekends, that your daughter is in pre-law at Yale, or that you starred in your high school play. They are interested in
name of
institution where you got your college degree or degrees along with your date of graduation and your major. If you claim advanced degrees, add your Thesis or Dissertation topic. Your work experience is vital to your credibility. Be specific, give
name, address and phone number of past employers and include names of supervisors and exact dates of employment.
Avoid cashflow projections. They aren't credible. Use an essay format to discuss how your funded proposal will ensure cashflow now and increase your company's balance sheet value. Don't query or submit your business plan to Venture Capital Firms that won't fund projects in your industry or country. It's a waste of time.