Suggestions for Business Plans

by Fred F. Richards, Jr.

Try not to use a "cookie-cutter" approach.

A general format is ok but have it professionally bound.
The business plan must evidence some individuality, or spark, to separate it from the multitudes arriving daily. But nothing too fancy! Presentations should be in black and white and not color - less expensive and shows concern for wise use of money.
Solid & excellent workmanship is more important than flash!
Remember that clear communication is important to your ability to succeed.
Assume that your reader is reasonably intelligent.

The two types of business plans.

Internal operating plan.
External business plan, generally, used in financing activities.

Be concise.

Redundancy only adds bulk.
If a sentence has more than 30 words, rewrite.
Paragraphs should be short and contain only one idea.
Use headings and/or box text to highlight important points.
For the body of text, use 12 point type. Most investors wear glasses!

Your executive summary should be less than four pages including graphs.

Can the reader digest the executive summary in under five minutes. If not, it needs rewriting!

The first paragraph of the summary is the most critical part of the business plan!

Every word should be golden!

It must include the Who, What, Why, When, Where and How, or you have wasted your time.

Assume the reader has the money.

You have probably less than 15 minutes to catch the attention of the venture capitalist.

Hire a professional editor to clean up the document, or at least, a retired English teacher.

Use active voice. Portray quiet confidence in your project's success. Acknowledge the possible problems.
Run all the material through a spell checker including spreadsheets and any prepared exhibits.
Check for plural and singular noun and verb conformity.
No dangling participles.
Have a friend that is completely unfamiliar with your project & your industry, review the plan. If the friend does not understand it, rewrite the plan.

Sponsorship and prior contact is important!

Don't submit your business plan without a prior contact either by a friend, a sponsor, or yourself. Unsolicited plans often go straight into File 13, or to the lowest person in the firm. You want, and need, a champion to fight for your plan!

	Do not call the investor, and/or venture capitalist for acknowledgement of receipt, have the delivery service provide it to you.
	Your cover letter should contain the name and address of the person to be contacted for additional information including a phone & fax number, if available.
	The cover letter should also state that the undersigned will contact the recipient at such a date and time to determine the extent of interest in the project (generally, within 10 days of receipt.) And be sure that you do it.

Where possible, incorporate graphics, graphs and tables within the text rather than as addenda to the document. Be conservative, realistic, and consistent in your projections. Provide a best, probably and worst case scenario. Don't blow smoke - it clouds the opportunity. If you lose the reader once, there is no getting them back.

Emphasize the management team's past successes and acknowledge their failures.

	Nothing hurts a due-diligence investigation like an undisclosed bankruptcy, or lawsuit for breach of contract.
	Be certain that a due-diligence review will be made of not only your plan, but every member of your management team!
	Be sure to discuss your knowledge of the market, your experience in the market and the strengths and weaknesses of your competition.

Check your figures and check again, and again.

	Make sure your references are consistent.
	Label all assumptions clearly. Cite sources and provide documentation for forecasts.
	Use graphs for clarity.
	Number all graphs and exhibits and make sure all references in the text are to the correct graphs and exhibits.
	Provide all figures on hard copy as well as a 3-1/2" disk that is able to be read by Lotus 123, Excel, or Quattro Pro.

Provide the critical path schedule.

Clearly state anticipated goals.
Set appropriate performance hurdles.
State funding needs and how much, if any, is to be provided by the management group.
If funding is required in stages, state clearly the requirement for additional funding and the criteria to be met to obtain the drawdowns.

How are the fund providers going to make money and get out!

If you are seeking funding, be prepared to show the bank and/or investors how they will be repaid and/or realize their profit or losses. State that you are flexible as to structure and an exit strategy.

Want the business plan returned?

If you want the business plan back if the recipient is not interested, include a correctly addressed, postage-paid envelope, or UPS pickup tag, etc.

Last updated - February 28, 2007