4 Key Business Plan Strategies For You!

Happy Monday, everyone. I hope your weekend treated you well. Now the workweek is once again interrupting our Sunday afternoon happiness, I thought it’s be a good time to infuse a bit of )useful information.

Today we’re going to discuss how to make your business plan more appealing to potential investors.

I’ve considered hundreds of business plans over the last 23 or so years. I’ve heard pitches on everything from motion pictures, TV shows, video game companies, concerts, radio stations, DVD duplication, production slates, online magazines, oil drilling expeditions, bottled water, wind energy, real estate, private schools, leasing airplanes, airplane parts, car parts, melting metal, minerals, foreign currency exchange, a Christmas lights company, an ostrich farm, alpacas, a production backlot, hotels, motels, jewelry companies, garment factories, a surplus store, antiques, technology and several more that I can’t remember off the top of my head. While I said “no” to most of the business plans I read, I did invest in more than a handful of them, namely films, real estate and video games. When I look back at why I said “yes,” to the ones I did, my reasons were because a) I believed in the people and b) I believed in the product.

In all of my years on considering business plans as well as writing some of my own, I’ve come across several faux pas that will likely kill most investors’ interest. Thus, here are three key things to know about your business plan in order to give your dream the best to become reality.

Investors Don’t Actually Read Business Plans…

Most investors are too busy to read 40-60+ pages on why you need their money. They’d much rather know how much money you need and when they’ll see it back as quickly as possible. Thus, it behooves you to keep your business plans concise and focused. While there is no magic number, under 20 pages will usually illicit a stronger response than a document north of 50 pages. Remember, while the first thing any investor will do is look at the first page of your business plan, the very next thing they’ll do is flip to the last page to see how long of a commitment it is for them to read it.

Utilize Executive Summaries

Another effective practice is to send a two to three three-page “executive summary” of your business plan to potential investors, before you send them the full document. Doing so will substantially shorten your “investor response time” and it will also filter out those investors who aren’t interested in investing.

Make Sure Your Profit Assumptions Are Within The Realm Of Realism

Plugging in realistic numbers of what your investment is expected to earn will go a long way toward helping you gain respect with your potential investors. Remember, investors got to where they are in life by being smart, strategic, focused and shrewd. Thus, planting “pie in the sky” numbers into your business plan will hurt you far more than it will help. Doing so will tell your investors that you are either a) trying to hoodwink them or b) aren’t smart enough to know the pie in the sky numbers are unrealistic. Now, don’t get me wrong, you should definitely share with investors how much your investment could possibly make, but don’t present those numbers expectations.

Do Not Use A Sense Of Urgency To Land Investors

Far too many entrepreneurs try to use their own sense of urgency to convince investors to cut a check. However, doing so is never a good idea. Remember, Investors are already wealthy, and it’s highly unlikely they gained their wealth through pressure-packed, time-sensitive situations. Thus, no matter how much of an urgency you may have, your investors will not share in your urgency.

Now I’d like to share a great video about business plans:

If you need a little Monday morning pick-me-up, here’s a link to my podcast, “Limping On Cloud 9.”  In addition to the link below, you can also find us on iTunes, Google Play and Stitcher. Thank you for lending me your eyes and ears.

Overcoming Disability Hurdles

 

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