How to write better business plans
Are you starting a new company? If you are, it won't be long before someone asks you if you've written your business plan. This is especially true when you seek funding of any type. Gone are the dot-com wild-west days when snotty-nosed Stanford students could sit in a VC's office and mumble "We don't have time for a business plan" and still receive $20 Million Dollars.
Business leaders, today, ought to have their act together. And, part of having your act together is having a good plan.
What are the keys to writing a successful business plan?
Here I'm going to describe 12 Keys to Writing Better Business Plans:
1. Know your weaknesses and address them.
2. Make an impact.
Use a video, use a demonstration, anything to show why your product or service is superior.
What type of competitive environments are you submitting your offering? Are you entering contests? Are you willing to put your name on the line? Are you submitting your ideas against the pack? Bill Gates would never have succeeding with Microsoft had he never got his basic disc operating system in front of IBM. Success often starts with the early competitive moments that define us.
4. Tell a story.
You have to tell a story. If your story isn't compelling, people won't buy from you.
5. Be doggedly determined.
Are you committed to making it work no matter what obstacles get in your way?
6. Make it fundable.
Great ideas aren't the only thing that matters. Often, the most fundable project that may get you funding. Set your business up with enough punch to attract funding.
7. Refine, refine, and refine your pitch.
A better elevator pitch - have someone catch you in an unsuspecting moment and ask: "Why you?" See how you answer... then refine it. Rinse, repeat, etc.
8. Management team ought to know.
What is your management team's record related to what you are doing? There ought to be a long-tail of related history tying what you did in the past with what you're doing now.
9. Determine your market, then sell to that.
If you can determine your market early, the better for you. The more you narrow your niche to the people who truly have the money, power, and desire to buy from you, the more you will win.
10. Put some of your own money in your company.
Do you have skin in the game? An entrepreneur who hasn't invested any of their own money probably won't be as committed. At least, that's the prevailing logic used by VC (venture capitalist) investors.
11. Know your risk.
What's your risk? In addition, are you aware of the risks to your business? Many investors want to know the exact risk of investing in your business. You ought to know your risk before and test your strength against it PRIOR to going after the money, if possible.
12. Know both break-even and ROI points for investors.
What's the projected gain? If you can't show a reasonable ROI (return on investment) within a reasonable period of time, you won't get the money you need to grow your business. As my Dad likes to remind me, "Cash Is King" and if you're getting cash you must realize there WILL be an expectation that you'll make MORE cash in a short amount of time. This will increase the pressure on you to succeed. So, have your act together when you ask for money.
When you design your business plan, consider these twelve steps to success. I probably could have added: 13. Know your exit strategy, because that will come up, too. Many business leaders don't understand that if they don't have the background for their company, they either need to hire it (get better managers) or sell their idea. Otherwise, they may be facing years of struggle.
If you need help, ARRiiVE's business planning team has an incredibly strong track record of writing business plans that get funded. In fact, ALL of the business plans we've written in the past seven years have received the desired funding.
Make sure you identify your strengths and weaknesses. And, if you don't need money now, still keep in mind that you may in the future. Raising money is often a part-time job for many new entrepreneurs. Get good at it, and you'll succeed much more wildly in the early years of your business launch.
Copyright © 1999-2008 by ARRiiVE Business Solutions. All Rights Reserved. SUBSCRIBE.
Mar 6, 2008
How to write better business plans