Whether you’re writing a business plan for the purpose of raising money, or simply crafting an internal document to guide your team, asking the right questions is essential. For most small companies a well-written Strategic Plan detailing Vision, Mission, Values, Goals and Objectives is the best planning approach. But if you’re planning to raise money from private investors or an institution, you need to focus on giving the investors the information they want. Too many entrepreneurs make the mistake of detailing items surrounded with too much boilerplate and meaningless information.
This article is about writing a business plan that directly addresses the specific information desired by the investors who are willing to hear your story. And the more sophisticated the investor to whom you present your plan, the faster they will want to get to their bottom line. No fluff.
In working with a technology partner specializing in CRM for entrepreneurs, I ran into one of the most useful set of questions that a solid business plan should address. I am referring to a Venture Capital firm that backed Infusionsoft. Mohr, Davidow Ventures is a heavy hitting firm. You won’t always get to present to such an elite group, but you learn to organize your plan around the questions any prudent investor will ask.
Think of it this way, you’ve got one of the best startup concepts on the planet Earth. Or you’ve been in business for a while with some decent numbers to build on. And now you’ve got one shot to convince an elite Venture Capital firm to fund your expansion.
Well in this case you are about to present your plan to Mohr, Davidow Ventures, based in Menlo Park, California. Some of the companies they’ve funded are Brocade, Epigram (BRCM), FormFactor, Freshwater Software (MERQ), Infusionsoft, Ipsilon Networks (NOK), Pivotal Technologies (BRCM), Rambus, Vantive, Vitesse, and Zip2 (AltaVista).
In advance of this meeting you had the presence of mind to go to their web site and do your homework regarding what they might want to see and hear from you. And you have taken the time, including your key people, to address each and every issue in order to affect a positive outcome.
What you need to know about this firm and any other elite firm is that presenting a lame business plan will get you nothing but a big fat “No.” In presenting your business plan to anyone, think about and answer the following questions.
1. What problem will you solve?
2. Who currently has the problem?
3. How will you solve it?
4. How big is the market potential?
5. What is your distinct advantage?
6. How does the competitive landscape look?
7. What are the financial implications?
8. How much capital will you need to develop the solution?
9. What kinds of volumes and margins are reasonable to expect?
10. What are your team's qualifications?
Elite investors are typically much more interested in the content of your plan. They could give a hoot about your plan format. Investors will want to learn about you, your past experiences and specific accomplishments. You will not want to blow smoke about your track record as chances are they have already done their homework on you.
Savvy investors need to understand the justification for your business idea. They will look for straight answers to their very well intended questions. What you will also need to include is an Executive Summary. Writing a succinct Executive Summary often presented at the beginning of a killer business plan. Protect the document, make a pdf file for example, and send it via email. Most firms today prefer working digitally. Be sure to know the investor preference.
If you do not have an inside track to a contact with the influence to really read and evaluate your plan, do your homework by looking at the team section or similar page of their website. In the absence of this, pick up the phone and start asking questions.
Writing a killer business plan and presenting it to the right audience is essential to capitalizing many businesses. In my years of working with entrepreneurs and investors, I have seen far too much time, energy, and paper wasted on crappy plans. So focus on giving your prospective investors what they really want. Provide great answers to the right questions.
How to Write A Killer Business Plan - To learn more about this author, visit Clifford Jones's Website.
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Clifford Jones
(Visit Clifford's Website)
Clifford Jones is the founder and
president of WealthNet Business Coaching,
LLC based in Scottsdale, Arizona.
WealthNet is an expanding and dynamic
network of business coaches, consultants
and advisors specializing in building and
growing small companies. The WealthNet
team serves past and current clients in a
wide variety of industries including
publishing, financial services, banking,
accounting, executive search, mortgage and
travel/hospitality. He and his team focus
on coaching entrepreneurs and executives,
as well as providing tactical advice
regarding strategic planning, business
development, and human capital. Cliff has
more than 25 years experience as a sales,
marketing and financial executive and
entrepreneur. He has launched and sold
several small businesses. He also has an
incredible passion for helping
entrepreneurs create wealth. For more
information regarding WealthNet Business
Coaching, LLC please visit
www.wealthnetcoaching.com.
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