June 26, 2010
Want to finish your business plan faster?
Watch this free presentation to see how you can finish your plan in 8 hours or less.
When working on your business plan, it is wise to step back periodically and take a mental snapshot of your progress. Once you have completed a draft of your business plan, ask yourself whether
- your Executive Summary is a one-punch knockout;
- your company fits the management team like a glove;
- and your business plan would satisfy the appetite of your standard seasoned investor.
1. Have Them at Hello
You get one minute to make your case in writing. That is the amount of time that investors will spend reading the first page of your business plan. After that, they will either read on – or let it go forever.
The first page of your Executive Summary represents that first minute. Although it is the last thing you will write in your business plan, the Executive Summary is the one chance you get to hook readers into swallowing the whole plan. It must contain the most gripping, most compelling aspects of your plan.
Every good Executive Summary covers the product or service of your company, who exactly the market is, and the relevant background of the management team.
To score a knockout blow in the Executive Summary, you will have to simplify some of the arguments you make in the rest of your business plan, but that’s okay. As long as it hooks an investor, it’s a good executive Summary. Readers can get the details later in the plan.
2. Vividly Illustrate That Your Management Team is Perfect for the Job
Years of experience count, but not as much as relevant experience. Your management team must be uniquely qualified to carry out the daily and long-term operations of your company. This will come out in the Company Analysis, Operations Plan, and Management Team sections of the business plan.
For example, your management team will be considered more qualified if the members have experience starting and successfully running young companies. Each member of the team must have experience in the job he or she is designated to do within the company. It helps if your management team has worked with recognizable brands. If you do not have the full management team to round out your needs, show how and when you will hire the right people.
3. Get Inside the Mind of the Investor
Worthy investors have a knack for quickly evaluating a venture based on a mental checklist that has become second nature to them over the years. Investors need to be able to
- quickly understand your company’s product or service;
- see that there is a large and growing need for your company’s offering;
- understand how your company builds “barriers to entry” the set your company apart;
- be satisfied that your management team is fit for the job;
- verify that you are realistic in your financial projections;
- and offer an exit strategy or multiple exit strategies for investors.
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