No. 9 - Close with a Bang

Be definite about how investors will get their money back and when. Specify the return rates; state how the risk investor will receive a 30 percent or 50 percent compound annual return, or whatever you're offering. For lenders, show that their funds are adequately secured and that your cash flow more than covers their interest and principal payments.

One of the big differences between ordinary plans and good entrepreneurial plans is that they have been critiqued to work. After you have drafted your business plan, solicit feedback on it. Ask a cross section of people whose judgment you respect to review it. Make any revisions that are necessary, and then prepare a good oral presentation. Follow up with a detailed 15 - 30-minute presentation. All should be modeled on your written business plan.

Individualize your financial projections. Think them out carefully.

Don't just show advertising costs as a percentage of sales. Most advertising expenditures are made some months before sales result.

Your projections should include the financial obligations of bringing your product or service to the marketplace: enlisting new management people as well as workers; taking on more physical space or manufacturing capacity; purchasing support materials and services; and monitoring inventory and accounts receivable.

And what should you do when you have too much information in your business plan? When is a 25-page business plan better than a 100-page business plan? The answer is - always. Long complex paragraphs are also very "popular". The purpose of your plan is not to impress the reader with the depth and extent of your knowledge. Your objective is to focus on the key elements of the plan.

You should also work out your distribution channels. How your product reaches the market is unquestionably one of the most important aspects of your business plan. At all costs, resist the temptation to cover all bases by listing every imaginable channel possibility.

And what about competitive analysis? The operative word here is "analysis". Listing the name and address of your competitors is not a competitive analysis. The investor is interested in knowing what you know and expect to see from your competitors near term and longer term. Why do customers buy from them? Is there a possibility that they might enter into strategic relationship or an acquisition (or be acquired) and by whom?

Knowing little or nothing about your competition is evidence that you haven't done your homework. While it may not be fatal blow, it certainly doesn't help your cause.

Investors today are very conscious of potential legal problems. If you have doubts about any of the above questions, it's probably a good idea to have a specialist review and resolve the issue before you meet with an investor. A good rule of the play is that you want to avoid surprises - at all costs.

THE ESSENTIAL ELEMENTS OF A GOOD BUSINESS PLAN

Every successful business plan should include the following essential elements:

Cover Sheet

1. Indicate full formal name of company.

2. Indicate ownership status.

3. List full street address.

4. List mail address if different.

5. List phone. Fax/telecopier, e-mail and web site information.

6. List principal contact name and title.

7. Date the plan.

Дата добавления: 2015-10-31