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finding the U in your bUsiness plan

Written by: Jason Helfenbaum

Article Overview: Don't underestimate the importance your team plays to investors

finding the U in your bUsiness plan

One of the most important mantras in writing is: “know your audience.” When I write copy for web sites or brochures I am focusing on the target market, and not the webmaster. For online application tutorials I focus on the learner, and not the programmers who developed the application. Logic then would follow when writing a business plan I should focus on the potential investors and not the principals. In order to solidify my understanding of what exactly investors are looking for in a plan, I asked a number of people involved in the VC world.

Part of the answer I got was as expected. They read the executive summary, and if intrigued, flip to the financials. But there were several other things that I had underestimated, including the value they place on the principal players in the startup. In some cases, these investors looked at the CVs before the financials. They want to see that if the idea is sound, so are the people who are going to execute it. From my own experiences, I had one web-based startup whose CTO had over twenty years' experience....in sales. Nothing against the individual, his experiences, or qualifications, but to have a technology-based company with a Chief Technology Officer with no hardcore experience in technology casts doubt on the viability on the whole venture. The idea can be great, the numbers, unbelievable, but if you cannot demonstrate that you and your team have what it takes to execute, then you will not be able to convince them that you should be funded.

You have to not just find yourself within the pages of your plan, but prove yourself. Think of it as a job interview. You are trying to prove why you should get the money. The business plan should be a reflection of who you are now and where you see yourself in the future. It should demonstrate that you have thought through all of the issues, and have assembled the team to fulfill your vision. Indeed, this can be a soul-searching exercise because you may in fact discover that you do have this great idea, the numbers all make sense, but you simply have the wrong team. This may be troubling to discover in the planning stage, but it is disastrous to discover once things get rolling in earnest.

This raises a very important point. Even though companies create business plans for their investors, plans are perhaps even more crucial for the company itself than for the investors. To reiterate an earlier point, a plan forces you to recognize who you are now and what you need to be in order to succeed.

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Article Tags: business plan, qualifications



Related Forum Posts
Re: looking for partner - Hey Brad, Do you have an executive summary or business plan created for your venture yet? Having these 2 documents prepared is critical to finding a good partner. These documents will also educate you on what you are going to need other than a partner. Good luck.
Re: Is A Business Plan A Waste Of Time? - We should have a poll here - who has a business plan and who doesn't. I think I contributed to this thread when it first started, but I agree with our recent contributors to the thread. A Business plan is simply a must. If you fail to plan... you plan to fail.
Re: Is A Business Plan A Waste Of Time? - also, it's one thing to "have" a business plan but if you don't "follow" the plan or "review" the plan atleast once a quarter is it really worth going through the trouble of creating one?? I say Yes because it get's you thinking about your business and subconsciously you will stick close to the plan but I'm also inclined to say no because I have spoken to a few people that create one and a year or two later have no idea what they had written in it.
Re: Is A Business Plan A Waste Of Time? - [quote="OmnivoreInk":icvpsdve]We should have a poll here - who has a business plan and who doesn't. I think I contributed to this thread when it first started, but I agree with our recent contributors to the thread. A Business plan is simply a must. If you fail to plan... you plan to fail.[/quote:icvpsdve] I'd be interested to see which of Evan's "Famous Entrepreneurs" had a business plan and which ones didn't.
Re: What makes a good business plan? - Another important component of a good business plan is that it follow the SBA recommended format. That is especially true if you plan to use your business plan to request funding.


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