Your Business Plan…Mach 1
Too many business owners spend too much time writing their business plan when they are preparing to raise money for their business. I’ve seen it time and time again. They procrastinate, and approach the business plan all wrong. This is precisely why building a business plan becomes a chore more than a process that should be enjoyable and insightful about your business.
Not The Kitchen Sink Approach
Over the last 12 years, I have helped hundreds small and medium-sized businesses successfully raise capital for growth. Lenders and investors need a business plan to take you seriously so it’s usually the first thing on the list to get the fundraising process started. However, many business owners do not get past this stage and end up harming their chances of fundraising (and their business) by coming at it all wrong.
The biggest hump business owners need to get over is that “more is better”. Including all information imaginable about all parts of your business is a good way of ensuring you don’t get the business plan finished, you tire funders out with the length of your material, and you end up with a business plan that has no focus.
Focus is not saying “yes” to every thought that comes in your mind regarding what you could potentially include in your business plan. Focus is about saying “no” to many of the ideas you may think about including in your business plan.
Throwing the kitchen sink at your business plan is one of the worst things you can do in the process of building a business plan. As an investor, it demonstrates to me you cannot articulate what is special about your business and do not know why you are presenting your business plan to me. Business owners wrongly believe that presenting all facets of their business to funders, will ensure that something will stick and resonate. Wrong. A funder will just get confused with how you are positioning your business.
The Two Key Things Funders Want To Know
There are only two significant areas funders want to know about your business, and that you need to convey from your business plan. Get these right in your Executive Summary, and you have a good chance of the funder wanting to read on.
The first is highlighting the opportunity you are presenting. For example, you have developed a product that solves a specific problem, and solves it better than the market. Highlight what is special about your business and where the growth opportunity comes from.
The second area of interest for funders is in understanding the risks your business is exposed to. Customer concentration, team gaps, and poor traction are all examples of areas that a funder will want to know about. Your job is to highlight how you have mitigated against these risks to limit the exposure.
Both these areas need air time in your business plan. But surprisingly, so many people dismiss, or underplay both areas. That is why so many business owners struggle with fundraising and waste so much time in the process.
Once you have determined the opportunity you are pitching, and how you mitigate risk, the tone of your business plan becomes clear. This will allow you to retain focus throughout the rest of your business plan.
Accelerating The Business Plan Process
Given that you now know of the need to retain focus in your business plan and you know the two key areas funders will be interested in, it should be easier for you to build a business plan quicker.
The quicker you get the business plan in the hands of funders, the quicker you have a chance of getting funded. Don’t aim for perfection with the business plan. It it not a dissertation. Instead, aim for usability, and your business plan as a tool that answers the key questions. Money loves speed.
Not only does building a business plan in this way save you time (time that you can focus on growing your business), but it also presents you as being more credible to lenders and investors. Understanding the needs of your audience with a business plan is critical. And with funders, the requirements are pretty simple. Business owners introduce unnecessary complexity to the process and make it hard on themselves.
Now that you have the framework to accelerate your business plan to secure funding for your business, find out how to execute this step-by-step. I’ve put together an email course that goes into only the most relevant of details regarding how I helped hundreds of small and medium-sized businesses raise millions in funding.
The course is called “The Smart Business Plan Academy” and enrolment is officially open! My FREE video training gives you immediate access to my proven, step-by-step system that has succeeded in raising capital time and time again. Visit http://thesmartbusinessplanacademy.com to learn more. I’ll see you on the inside!