Posts by : Dave Lavinsky

Finding investors who want to fund your company’s growth is great.

But if the terms they offer you aren’t good, then you have to pass. For instance, if they want to take 90% of the equity of your company, or control 100% of your Board Seats, then you lose too much control.

In this article, you’ll learn two simple strategies for getting more favorable terms when negotiating with investors.

Strategy #1: Create a Bidding War

The best strategy for getting favorable terms is to get multiple investors interested in your business.

You’ve probably heard the phrase, “he who has the gold makes the rules.” This is particularly true in investing. The investor has the gold and thus makes the rules in terms of what type of deal terms they’ll give you.

The best way to get the terms you want is to get multiple investors interested in funding your company. Then, you can essentially create a bidding war. For instance, if one investor says they’re willing to give you $3 million for 40% of your company, you can ask the other investors if they’re willing to beat that deal (e.g., give you $3 million for only 30% of your company). Once they do, you can go back to the original investor, and so on.

The more interested investors you have, the easier it is to create a bidding war and to better negotiate because you have other options. When you have no other funding options, it’s very difficult to negotiate.

Strategy #2: Have a “Ringer” in Your Corner

The second key strategy for getting favorable deal terms is to make sure you have a “ringer,” that is someone on your side who has successfully negotiated investment terms in the past.

This person could be a lawyer, an investment banker, or other advisor who deeply understands each of the deal terms. For instance, if they don’t fully understand “equity dilution” or “stock options,” they can’t help you get the best terms.

Ultimately It’s the Raising of Funding That’s Key

To reiterate, you will receive the most favorable funding terms by 1) getting as many interested investors as possible, and 2) having someone on your side with a track record of successfully negotiating investment deal terms.

Ultimately, though, keep in mind that raising funding, and not deal terms, is your primary goal. Since, for many businesses, if you don’t raise funding, you’ll never launch or grow.

Always consider this question: would you rather own 50% of a company that’s worth $10 million or 100% of a company that’s worth nothing?

So, keep this ultimate goal in mind. But clearly, try for the optimum solution which is to raise the funding you need with the most favorable deal terms.

Negotiating with Investors Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

To further help you negotiate with investors, we put together the slide presentation below to show you “The 10 Most Common Mistakes Entrepreneurs Make When Raising Venture Capital” so you can avoid them!

In this article, you will learn what an elevator pitch is and why it is so important.

You will then learn how to create a great elevator pitch for your business, using the comparative formula or elevator pitch template provided below.

What Is An Elevator Pitch?

An elevator pitch is a brief summary of your business. It is designed to quickly convey the key elements of your business to investors and get them interested.

As the name “elevator pitch” implies, it’s derived from the amount of time you would have to speak to an investor if you were riding an elevator with them. Accordingly, the goal of your elevator pitch is to convey your message and get the investor interested in 60 seconds or less.

Why Elevator Pitches Are Important

Most investors are constantly pitched with new ideas. As a result, if you can’t convey your story and gain their interest in 60 seconds, they’ll move on to the next opportunity. There are just so many hours in the day, and investors are too busy to invest time thoroughly reviewing all companies they come across. So, if you can’t convey your business quickly and effectively, you won’t receive funding.

Similarly, venture capitalists generally work in teams. So, if one member of the venture capital firm is interested in funding your company, they need to present it to the others. In doing so, they need an effective elevator pitch. If they don’t have it, they’ll fail to convince the others to fund you.

A Great Elevator Pitch Formula: Comparing Yourself to Another Successful Venture

One way to concisely explain your business to others is to compare it to another successful business they know and to show how you’re different.

One company who did this well was Bookswim. Bookswim’s elevator pitch was this: “We are Netflix for books.”

From just these five words, investors knew Bookswim was an online book rental company just like Netflix is an online movie rental company.

The Simple Elevator Pitch Template

If you’re able to compare and differentiate yourself from a successful company, that is a recipe for elevator pitch success.

If that formula doesn’t work for you, or if you’re seeking a more comprehensive elevator pitch, use the elevator pitch template below:

A. Start by answering the following questions:

1. What does your company do (start with phrases such as we help, we provide, we manufacture, we offer, etc.)?
2. Who does your company serve (who are your customers? teenagers? entrepreneurs, new parents, etc.)?
3. What key benefits do you offer your customers? (e.g., higher quality/more success, lower cost, more reliable, etc.)?Why is your company better than competitors? (e.g., even faster, less expensive, etc.)? What information gives your firm more credibility (e.g., track record)?
4. Is there a clear and clean business sector that your company fits into (e.g., restaurant, CPA firm, etc.)?

B. Combine the key information from Questions 1-5 into a 35 word or less statement that describes your business.

Say it aloud to make sure it sounds good and makes sense. Tell it to friends to make sure they “get” it. Tell it to employees to confirm that they can repeat it back to you.

Here’s an example: Rick’s Bridal sells high-end wedding gowns and accessories to brides in New York City. For twenty years, Rick’s has served over 25,000 satisfied brides through our six locations.

Practice Makes Perfect

Importantly, you should write down/type up your elevator pitch and practice delivering it.

The more you practice, the more easily you will concisely recite it within 60 seconds and the more natural it will sound.

Finally, try delivering your elevator pitch to friends, family, and warm contacts first to get their feedback before giving your first pitch to real investors or lenders.

Elevator Pitch Template Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

To further help you develop your elevator pitch, we put together the slide presentation below to show you “How to Craft a Killer Elevator Pitch.”

The right business plan template will allow you to quickly and easily complete your business plan.

The key is to know the questions to answer in each section of your plan.

Below is a great business plan template for you to use.

Also, at the bottom of this article, you will find a free business plan template you can download.

Here is your business plan template with each of the 10 sections you need in your business plan.

Let me go right out and tell you the secret to highly effective marketing: it is to focus on and improve your “conversion rates” in each area of your marketing.

In this article, I’ll discuss 4 key conversion points, how a 20% increase to each will give you exponential results, and specific tactics to achieve such results.

What 20% Improvements Do To Overall Results

Let me start with an example.

Let’s say your competitor runs an advertisement that reaches 10,000 target customers and gets these results.

• 1 percent response rate (response rate means that prospective customer visited competitor’s website, went into their store, called them, etc.)
• 35 percent conversion rate (conversion rate means the responding customer then purchases)
• $500 price per widget (widget being the item sold by your competitor)
• 1.5 widgets per buyer (average buyer purchases 1.5 widgets in initial order)
• 30 percent profit margin
• 10 percent repurchase rate (10% of customers buy from your competitor again)

Assuming the ad reached 10,000 target customers, your competitor’s gross profit from the ad would have been $8,662.50 (minus the cost of the ad).

Now let’s assume that your company did a 20 percent better job on each of these factors. Your results would be as follows:

• 1.2 percent response rate
• 42 percent conversion rate
• $500 price per widget
• 1.8 widgets per buyer
• 36 percent profit margin
• 12 percent repurchase rate

Now let’s look at the results.

If your ad reached the same 10,000 target customers, your gross profit would be $19,596.

That’s 2.3 times greater than your competitor’s.

Now, what would happen if you generated 2.3 times greater profits than your competitors every time you ran an ad?

The answer is that you would absolutely dominate them.

Now, the key marketing secret that I’m sharing with you here is that you don’t have to revolutionize your marketing system. Rather, small, 20% improvements in each part of your system lead to revolutionary results.

So, here are some ways in which you can improve each part of your marketing system.

Response Rate

The more you know about your customers’ wants and needs, the more easily you can design advertisements that appeal to them.

And the more you know about them, the better you could craft a unique selling proposition (USP) to attract them.

For example, if you are a local hardware company and you know your typical buyer is a busy male with a wife, kids, and dog, you could easily craft ads with a higher response rate.

You could also boost response rates by developing better offers that attract customers, such as an offer for a 90-day money-back guarantee.

Conversion Rate

Remember, conversion rates are the percentage of prospective customers that you converted into actual customers.

A few ways you could increase conversion rates include having a better process in place for training your staff and sales team, providing better employee incentives (e.g., commissions or bonuses for closing sales), or by developing and testing sales scripts that boost results.

Number of Widgets Per Buyer

To increase the number of units purchased per transaction (including purchasing more widgets or related items), you can rely on similar tactics to increasing conversion rates such as better hiring, training, sales scripts and so on.

McDonalds doubled its profits when it started asking “would you like fries with that?” and increased them again when it starting asking “would you like to supersize that?”

Profit Margins

Better systematizing your business and implementing the right processes and procedures will allow you to generate higher profits per sale than your competitors.

For instance, documenting standard operating procedures so tasks are done the same way by all employees generally decreases costs and thus increases profit.s

Repurchase Rate

Finally, to increase repurchase rates, do a better job of communicating with your clients and showing them how special they are. For example, send them emails, call them, or send them letters in the mail to educate them and remind them that you have products and services that can help them.

Summary

In most cases, to dramatically increase sales and profits, there’s no need to dramatically revamp your marketing efforts.

Rather, just getting 20% better in each core area will do the trick!

The Secret to Highly Effective Marketing Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

While I strongly recommend the 20% improvement approach to increasing your marketing effectiveness, if you’re looking for inspiration to create a world-class marketing campaign, we put together the slide presentation below showing “The Greatest Marketing Campaigns of All Time.”

If you’ve never raised venture capital before, it’s a confusing process. Don’t worry, in this article, I’ll hand you the keys to finding the perfect venture capital firm.

You’ll learn the key factors that distinguish venture capital (VC) firms from one another, and important terms like “dumb money” and “smart money.”

Find VC Firms That Focus On Companies Like Yours

The key to finding the right venture capital firm is to find one that focuses on funding companies just like yours. This is because venture capital firms typically focus in a number of ways as detailed below.

1. Geography

One way in which venture capital firms focus is via geography.

Most venture capital firms prefer to invest in firms located within 150 miles of their office. This geographic proximity allows them to more easily meet with the companies with which they invest and offer advice.

There are plenty of exceptions to the geography “rule,” but particularly for initial rounds of venture capital, odds favor finding a local VC firm.

2. Sector

Most venture capital firms only fund companies in certain sectors. Some focus on software companies. Other VC firms focus on healthcare and/or medical device companies. Some focus on nanotechnology. And still other focus on multiple (but rarely all) sectors.

It is important to target venture capital firms who are actively seeking companies in your sector. If not, the chances of them funding you are slim.

3. Stage of Development

The final way in which venture capital firms focus is on the stage of development. For instance, some VC firms will only fund companies that have revenues. Others might insist your company, at least, have a prototype. And still other VC firms only fund companies that have over $10 million, or even $100 million in revenues.

Paring Down Your List

To find the perfect venture capital firm, find a venture capital directory (there are many of these online) and then search by geography, sector and stage as specified above. This will give you a great initial list of firms that might be the perfect fit for you.

Next, you need to visit each VC firm’s website to pare down your list as follows:

A. Portfolio Companies

Virtually all VC firms list their portfolio companies (the companies they have funded). Look at these companies to make sure they don’t include any of your direct competitors. Clearly, if they have a vested interest in a direct competitor, you must remove them from your list because they won’t fund you.

Next, look at their portfolio companies to see if any could be good partners. For example, if your product or service could help one or more of their portfolio companies, this will make them more interested in your firm.

B. Team Members

Next, review the individual team members of the venture capital firms that remain.

Particularly look at the partners of the firms and what boards they currently sit on or have sat on. This will give you a sense of the types of businesses and areas in which they have great expertise.

If they sit or have sat on a board in your industry, they will most likely quickly understand your value proposition and be in a good position to fund you and provide value (advice, industry connections, etc.).

Always Look for “Smart Money”

This “value” is important since there are two types of money: smart money and dumb money. Dumb money is anyone that can provide you money. Clearly if someone will give you a $5 million check, it’s a good thing.

However, smart money is always better. Smart money is the $5 million check plus intelligence and help. If an investor can provide advice, introduce you to customers and partners and potential team members, that’s value that could help your company ultimately be successful.

Summary

In summary, to find the perfect venture capital firm, start by finding firms that fit your geography, sector and stage. Next, pare the list down by looking at who they’ve funded and their team members.

Then, reach out to these team members (email is best) with a compelling message as to why they should speak with you and learn more about your business.

Finding Venture Capital Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

To further help you find venture capital, we put together the slide presentation below to show you “The 10 Most Common Mistakes Entrepreneurs Make When Raising Venture Capital” so you can avoid them!

In showing you the six biggest mistakes to avoid in your business plan, it’s helpful to start with the goal of your plan. In general, this goal is to get someone else to say “yes.”

That someone may be an investor or lender who you want to write you a check. It might be an employee you want to join your company. It might be a firm with which you want to partner. In any case, you want them to say “yes” to your plan.

Thinking about it this way, you will realize that your business plan is essentially a marketing document. Its goal is to market your business to the reader and get them to say “yes.” Anything that could dissuade them from saying “yes” is thus a mistake.

Below I will cover the most common mistakes.

1. Typos and Bad Grammar

The first mistake to avoid in your business plan are typos and bad grammar. Consider the following statement/question a prominent venture capitalist once asked me: “If this entrepreneur can’t even put together a well-written business plan, then how could they possibly run a successful venture?”

So, make sure your business plan doesn’t have typos and that it’s well-written. Likewise, make sure it visually looks nice. No one wants to read pages and pages of unformatted text.

2. Too Much Information

The second mistake to avoid is having your business plan be a ‘data dump.’

An example of a ‘data dump’ is adding tons of information to your business plan that is neither enticing nor easy to read. Your business plan can’t just be a bunch of information about your business. No one wants to read that. Remember, your business plan is a marketing document that markets your business to investors, lenders and/or other readers.

So, instead of, for example, providing four pages of industry research with loads of statistics, include two succinct pages of research that offer select statistics. And most importantly, focus on why these statistics support the success of your business.

Each piece of data included in your business plan should support why your business is a good opportunity for the reader.

3. Mentioning Past Achievements

The third most common mistake in your business plan is failing to discuss what your business has already accomplished.

The best indicator of future success is past success. As such, if you’re able to show that in the last months or years your business has already accomplished specific tasks and/or milestones, this helps prove you’ll be successful in the future.

So, be sure to highlight all key accomplishments your company has achieved to date.

4. Exaggerating Your Market

The fourth key mistake to avoid in your business plan is to overstate the size of your market.

Rather, get as specific as possible as to the size of your relevant or specific market.

Let’s use the healthcare market as an example. If someone says they’re competing in the $1 trillion healthcare market, that is clearly not a relevant market. Even if they say they’re competing in the multibillion-dollar medical device market, a sub-segment of the healthcare market, they are still not being targeted or relevant enough.

You must continue to pare down your market to get the relevant market, such as the stent segment of the medical device market. Then, as well as you can, determine the size of that relevant market.

5. Not Focusing on Your Customers

The fifth biggest mistake to avoid in your business plan is not focusing on customer needs.

At the end of the day, your business will succeed or fail based on whether or not you satisfy customer needs. Your customers, with their checkbooks, ultimately determine whether your business prospers or fails. So spend time focusing on who your customers are, what their needs are, and proving that what you’re offering really caters to these needs.

6. Unrealistic Financials

The sixth and final mistake to avoid in your business plan is showing outrageous or outlandish financial assumptions.

Rather, your financial assumptions in your business plan and specifically your financial model must be more realistic. For instance, if you say you expect $1 billion in revenue in your first year of operations, you will turn off any sophisticated investor.

That’s because no company in the history of the world has ever achieved such revenues so quickly. While your business may be unlike any other, you should still research other companies to understand the most likely growth scenarios such as how fast your revenues can grow, how quickly you can hire and train employees, and so on.

Most entrepreneurs haven’t created scores of business plans. Nor have most presented their business plans to experts who provided feedback. As a result, most business plans, unfortunately, exhibit one or more of the mistakes detailed above. Now that you know about them, yours won’t.

Business Plan Mistakes Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

In addition to business PLAN mistakes, there are many business mistakes to avoid. We put together the slide presentation below to show you “20 Business Mistakes to Learn From.”

When seeking equity funding for your business, the two primary options are angel investors and venture capitalists.

This article will teach you the difference between these two types of investors and help you determine which one is right for you.

The Difference Between Angel Investors and Venture Capitalists

Angel investors are individuals who invest their own money in companies.

A venture capitalist, who typically works as part of a venture capital firm, invests the money of others hoping to get a handsome return.

The primary difference between angel investors and venture capitalists is that venture capitalists invest solely for return on investment (ROI). That is venture capitalists make investment decisions based on the ROI they expect or hope to receive from their investment.

While angel investors care about ROI too, they often have other motivations such as:

• Knowing or liking the entrepreneur and wanting to see them succeed
• Ego: feeling good about investing in specific firms and having others know they invested
• Perks: as an equity holder, they are sometimes entitled to perks (e.g., if investing in a restaurant, they can go there and receive free meals and special attention)

Venture Capital Criteria

There are several criteria venture capitalists (VCs) use when judging whether to invest in a company or not. These criteria will help you understand whether VCs or angel investors are most appropriate for you.

Traction

More and more VCs will only fund companies if they have revenues or, at least, beta customers or a prototype built. If you have not achieved any of these milestones, then angel investors are more appropriate.

Funding Requirements

Another key criterion is how much money you need to raise. If you need to raise less than $1 million, generally you should seek angel investors. Most venture capital firms don’t invest less than $1 million or $2 million dollars.

Sector

Most VCs have very specific sectors in which they focus. For instance, some VCs focus exclusively on the Healthcare sector. Others only invest in software. Nearly all focus on the technology sector since such ventures have the highest chance of growing quickly and getting to a large exit (sale of company or IPO).

Conversely, most retail or services business grow more slowly, and although they may be great investment opportunities, they are more suitable for angel investors.

Geography

Most venture capitalists only invest (or strongly prefer to invest) within a certain geographic range.

Most VC firms invest within 150 miles of their location. For angel investors, 70% of angel investments are made within 50 miles of the angel’s home or business location.

So, if you are located far away from VC firms, then angel investors are probably a better option.

A Common Scenario: Raising Angel Funding THEN Venture Capital Funding.

A very common scenario is for a company to start by raising angel funding and then VC funding later.

It generally works as follows. You raise your initial funding from the angel investors, which is usually a smaller amount, such as $50,000 to $500,000.

You use that funding to progress your business, to create a prototype, to get beta customers and/or to ideally generate revenues. Once you’ve achieved such milestones, you seek venture capital. In fact, you might raise multiple rounds of venture capital. You might start with a $3 million round of venture capital to get to the next level of success, and then you might raise a $10 million, or a $20 million, or even a $50 million round of venture capital later.

One of the most famous examples of pursuing this funding path is Google.

Google initially raised funding from friends and family, and from credit cards. It then received angel funding from Andy Bechtolsheim.

The funding from Bechtolsheim allowed Google to achieve milestones and grow. Google subsequently raised an initial amount of venture capital, then larger amounts of venture capital, and eventually Google went public.

Conclusion

While there are differences in funding deal terms (e.g., how much equity they take, whether they take a board seat, etc.) between angel investors and venture capitalists, the bigger and more important difference is which type is more relevant to fund your business in its current state.

Without funding your business can’t grow to its fullest, so make sure to go after the investor type that is best suited for you.

Venture Capital vs Angel Investors Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

To further help you decide between venture capital and angel investors, we put together the slide presentation below to show you “The Key Differences Between Venture Capital & Angel Investment.”

Finding angel investors is a common need for entrepreneurs. With an angel investor, your company can be poised for great growth.

Without one, unfortunately, your great idea might remain in your head, for it doesn’t have the funding to flourish.

The 2 Types of Angel Investors

In discussing how to find angel investors, we need to start by identifying the two types of angel investors.

One type of angel investor I call public angel investors. The second is what I refer to as private angel investors.  Each has their advantages and disadvantages, as you’ll learn below.

Public Angel Investors

Public angel investors are angel investment groups or individual angel investors that you can find online and/or specify themselves as angel investors.  For instance, you can do an online search on angel investor groups in your area and will most likely find local angel groups.  Such groups work together on finding companies to fund and vetting them. They also pool their money together to enable them to invest in multiple businesses in order to have a portfolio of angel investments, which is generally the best investment strategy. Because you can find these angel groups online, I refer to them “public” angels.

The second type of “public” angel is someone who publicly identifies himself or herself as an angel investor. By going to a site like LinkedIn and searching the keyword “angel investor,” you will find such individuals and then contact them.

The advantage of “public” angel investors is that they are easy to find. The disadvantage is that because they are easy to find, everyone finds them. That is, they are constantly being approached with investment opportunities and can only fund a tiny portion of those that they see.

How To Raise Funding from Angel Investors

If you want to raise your first $100,000 (or more), click below to learn my battle-tested, 6-step funding formula for raising funding from angel investors

Click here to raise angel funding for your business today.

Private Angel Investors

Understanding “private” angel investors is really exciting because there are many, many more private angels than public ones. Private angel investors are people who have either made just one or a small amount of angel investments or who have the financial ability to make an angel investment but have not.

Most “private” angel investors are what I call “latent” angel investors. They are  “latent” because they have the means and interest in making an angel investment but they just don’t have any angel investments that they know about.  They’re just not getting approached with businesses to fund.

These angels are my favorite because they are not receiving tons of business plans.  Conversely, a public angel or a venture capital receives tons of investment opportunities, and as a result, they must be much more stringent in their funding criteria. And ultimately, the chance of them funding your business is much less because they have so much else to choose from. But with “private” angels, who have much less to choose from, there is a high likelihood that they’re going to choose you.

Finding Private or “Latent” Angel Investors

So how do you find these private or latent angel investors?

The way to do so is via networking.  You network by asking who do you know and who do others know.

Ask your lawyer, “Who do you know that might be interested in funding my business?”  Ask your uncle. Ask your accountant. Ask your current friends. Ask your friends from high school or college. Ask other members of your religious congregation. Ask everyone, “Who do you know that could fund this business?”

And importantly, ask other business owners. We all go into retail establishments often and many times you’re speaking with the owner of the business.  Ask the owner, “Hey, is this something that you’d fund?” Or ask, “which other business owners do you know that you can introduce me to?”  Most business owners know other business owners since often their members of local Chambers of Commerce together.

The name of the game here is networking.  Networking allows you to find other business owners, executives and/or other people with money.

How to Get Started

The easiest way to get started with raising funding from angel investors is to target “public” angels. As discussed above, you can go on any search engine or LinkedIn to quickly and easily find these investors.

Reach out to them via emails and try to attain a meeting. Remember that the odds of any of these investors funding you are low since they review so many other investment opportunities. But, if you speak with enough, one may fund you. And many may refer you to others and/or provide valuable feedback.

While you’re reaching out to the “public” angels, start your networking process to find “private” angels. While these angels are much harder to find, remember that when you do find them, they have a much higher likelihood of funding you.

How To Raise Funding from Angel Investors

If you want to raise your first $100,000 (or more), click below to learn my battle-tested, 6-step funding formula for raising funding from angel investors

Click here to raise angel funding for your business today.

How to Find Angel Investors Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

To further help you learn about and find angel investors, we put together the slide presentation below to show you the key differences between angel investors and venture capitalists.

Your business plan should be as long as is required to convince the reader that your business plan is worth investing in or taking an interest in.

That being said, the average length of a business plan to accomplish that goal is 15 to 25 pages.

The Ultimate Mission of Your Business Plan

Importantly, to determine the ideal length of your plan, remember the ultimate mission of your plan. That mission is to convince the reader to get involved in and or fund your business. If your business plan is too short, you’re probably not giving them enough information on your business. Conversely, if it’s too long, you’re providing too much information and you’re going to bore them, with the result being that they’ll lose interest.

Because length matters, the most important part of your business plan is clearly the first page or pages of your business plan. The first page is usually the cover page, followed by the table of contents. And then, the first real page of content is your Executive Summary. This is why the Executive Summary is so important. Because if you don’t capture the interest of the reader here, on these first pages, they’re just not going to read on.

In particularly, the very first paragraph of the Executive Summary is of critical importance because if you don’t excite somebody right away, they are not going to keep reading.

I typically want the Executive Summary to be one to two pages to get the reader interested in your business. Then, the rest of your plan supports the Executive Summary and goes into more detail about what your business is about, what products and or services you will offer, what is your marketing plan, what are the highlights of your financial plan, etc.

After the Executive Summary, there are 9 other key sections of your business plan. Each of these sections should be one to two pages each. And so, if we take an average of 1.5 pages per section times 10 sections (including the Executive Summary), we now have our 15-page business plan.

Importantly, the final section of your plan is your Appendix. Your Appendix could be longer than other sections because here you’ll include your full financial statements — your income statement, balance sheet, and cash flow statement – and any other supporting documentation. But once again, the core of your business plan should be only 15 to 25 pages, or whatever amount of text and or pages is required to convince the reader that this is an opportunity worth pursuing.

Your Plan Supports Your Executive Summary

Let’s revisit your Executive Summary since it’s so important to the success of your plan. Importantly, in your Executive Summary, you must convey why your business is exciting and why it’s going to be successful.

Then, the rest of the document, that is, in the rest of your business plan, you will support this. For example, you might say in the Executive Summary that “our business is poised for success because we are competing in this market. This market currently enjoys sales of $845 million per year and is growing at a rate of 9% per year.”

This is enough research to include in the Executive Summary to get the reader or investor interested. Then, in the body of your plan, particularly in the Industry Analysis section, you must include whatever supporting information to prove this fact and go into more depth.

Specifically, in the Industry Analysis section, you would not only repeat that “the market size is $845 million and is growing by 9% per year” but you’ll cite different sources proving these figures. You’ll discuss different segments of the market. You’ll mention different geographic regions of the market, and so on. In summary, in the Industry Analysis section of your plan, you’ll go into as much detail as is required to further prove that the market opportunity is sound.

Likewise, in your Marketing section, you’ll go into as much detail as is required to prove your marketing plan is sound. For example, if one of your promotional strategies is PR or public relations, you’ll detail what specific newspapers, magazines, and websites you will target backed up by research on the customer demographics of those media sources. You’ll also discuss your PR strategy, such as whether you’re going to hold events or create stories.

Nobody’s Going to Read a 100 Page Business Plan

A final and important point on the ideal length of your business plan is that you want to make sure to include enough information to answer the reader’s most important questions, but not every question.

If you answer every question, your plan will be too long and you will bore most readers. Remember, nobody’s going to read a 100-page business plan. Rather, include the critical, concise information upfront in your Executive Summary and then, in the other sections of your plan, provide enough information to prove what you’ve said in the Executive Summary, add additional detail, and answer core questions that investors or readers will have when reading your plan.

Business Plan Length Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

We put together the slide presentation below entitled “How Your Business Plan Should Look” to give you additional pointers on creating a great business plan. These pointers allow you to keep your business plan short in length, but still very impactful.

The overarching question that you must answer when writing a business plan for investors is this: what’s “in it” for the investor?

To accomplish this, you need to put yourself in the investor’s shoes to think about what they care about.

What should be “in it” for them is the opportunity to invest in a business that has huge upside potential and low downside potential. With regards to low downside potential, I’m referring to a low risk of failure.

The specific 6 questions to answer in your business plan to accomplish these goals are below.

Size of the Business Opportunity  

The first question is how big the business opportunity is, and is it growing?  To answer this, you need to provide information on the size of the market in which you’re competing and trends affecting the market.

Financial Implications of Investing  

The next question that you must answer for an investor has to do with the financial implications.

Specifically:

• How much money are you asking the investor for?
• What are you going to do with that money?
• What are the projected financial results? For example, what do you expect revenues will be in year one, in year three, in year five?  What are expected net income in year one, year three, year five? Etc.

Exit Strategy?

Your exit strategy is critical when writing a business plan for investors since the exit strategy dictates how the investor will ultimately receive payback for their investment and get their money out.

Consider this example. You start a company and you grow it to $5 billion in sales. If you keep that company private, then an equity investor may not have the ability to get their money out.

So the exit plan details how the investor will cash out or make money.  Usually, the exit plan is going public or more likely is selling your company.  There’s a much greater likelihood that a company is sold than that it will go public.  So if the prospect is you eventually selling your company, you need to answer questions in your business plan such as:

• Who are the likely buyers of your company?
• Why would they buy you? More specifically, why would they buy you versus possibly building a competing business or strengthening or growing their own business?

Management Team

The next critical question to answer when writing your business plan for investors is who is on your management team and who will you add to your management team later?

This is key because most investors, or, at least, the smartest investors, are betting on the management team as much as they’re betting on the market opportunity.  You see, even if you have the greatest business idea in the world, if the management team can’t execute on it, then the business will fail.

One of the great examples of this is the story of PayPal. PayPal was formed by great entrepreneurs including Peter Thiel, Elon Musk, and Max Levchin. Clearly PayPal had a great management team. However, the original PayPal concept which was to allow one PDA (Personal Digital Assistant like a Palm Pilot) to pay another PDA failed. It just didn’t catch on.

But the management team was smart enough to recognize that they could use their technology to allow one person to pay another person or a company online and they basically launched a new service which is PayPal as we know it today. PayPal became a huge success that was sold to eBay for over $1 billion.

So that’s why you need to answer in your business plan this key question: what is it about your management team that makes you qualified to execute on the business opportunity. Importantly, if you’re currently missing people on your team, document the qualifications of people you plan to hire to fill such positions.

Risk Factors  

Every business has risk factors, and the earlier on in your business, the more risk factors. For example, if you currently have an idea for a new product, risk factors include:

• Whether or not you will be able to design the product
• Whether you could cost effectively manufacture the product
• Whether consumers/businesses want/will buy the product
• Whether you can cost effectively market the product
• Whether you could build a quality management team that can execute on the opportunity

The more risk factors that you’ve already overcome, the better. And importantly, be sure to document each of these accomplishments in your business plan.

Barriers to Entry

A final question to answer for investors is what are the barriers to entry. Specifically, once you start growing your company, what is there to prevent others individuals and companies from stealing your customers?

The more you can show barriers to entry, how once a customer comes to you they’re probably going to stay for a long time, the better job you’re going to do in convincing investors to fund you.

Writing Business Plans for Investors Infographic 

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Recommended Slideshare 

Writing a great business plan is key to getting investors to fund you. So you understand other helpful tactics and strategies, we put together the slide presentation below to show you “Sure Fire Ways to Impress Investors.”

If you’re looking for equity funding, the exit strategy section of your business plan is very important.

This section details how you plan to eventually “exit” the business (usually via the sale of your company or an IPO) so that investors can get a return on their investment.

This article details the importance of your exit strategy and the two keys to include in this section of your business plan.

Exiting A Business

“Exiting” is also known as cashing out of your business. While many people think of an IPO (initial public offering) as an exit (which it is), the most likely successful exit for a business by far is selling the company.

It’s called an “exit” when you sell the company because that is how you exit the business. That is how you end your ownership and the equity owners’ (i.e., investors) ownership of the business, and that’s how they “cash out” (get their money back plus their return).

Let’s use an example. An investor gives you $1 million for 50% of your business. You grow the business and sell it for $100 million. You will receive a check for approximately $50 million, and the investors will get a check for approximately $50 million.

That’s how the investor cashes out. Barring other provisions in your funding agreement, if you never sold this business, the investor who gave you $1 million would never get a return on their investment no matter how successful your company became. This is why the exit strategy section of your business plan is so important.

1. Detail Your Most Likely Exit Strategy

There are two main components to include in the exit strategy section of your plan.

The first is to detail your most likely exit strategy. Is it go public? Is it to sell the company to an acquirer? Is it to sell it to your employees?

Take a moment to think about your most likely exit and then document it.

2. Prove Your Exit Strategy

The second component is most important, and it is to prove the likelihood of your exit strategy to the best of your ability.

For example, if your exit strategy is to go public, then show other companies in similar markets or positions that have gone public in the last three to five years.

Provide research including the names of those companies, the dates they went public and the returns their investors received.

Conversely, if your most likely exit strategy is to sell your company, list potential buyers. Discuss not only who they are and their current financial positions (e.g., estimated total revenues if a private company), but the reasons they’d want to purchase a company like yours. Ideally, show other companies these firms have acquired in the past and at what price points.

Finally, as much as possible, show other companies that were similar to yours that were recently acquired. As much as possible, determine the sale price of these companies and the returns their investors might have received upon the acquisitions.

Making Your Exit Strategy Section Shine

In summary, your exit strategy section should discuss your most likely exit or preferred exit, and then prove the potential likelihood of that exit. This gives investors the confidence they will ultimately get a nice return on their investment in your company.

In general, the more research you do here the better; as this will improve your case as to the potential of eventually realizing a large exit. Likewise, this research might help you identify strategies to increase the likelihood of any exit. For instance, you might find that acquirers in your market tend to first become customers or partners of the firms they acquire. In such a case, you might decide to adopt this same strategy.

How to Create the Exit Strategy Section Infographic

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Recommended Slideshare

For inspiration when creating the exit strategy section of your business plan, we put together the slide presentation below to show you some Killer Company Exits (companies how have exited for BIG dollars).

There are 7 core strategies I use most. These are the same strategies I’ve taught to thousands of entrepreneurs, and most importantly, which have allowed them and me to create thriving businesses.

Below, I’ve detailed each one. Learn them and use them as I’m confident the level of your success will increase dramatically.

1) Have a Clear Vision Of Where You Want To Go

If you don’t have a clear picture of the company you want to build, there’s no way you can build it.

Spend time figuring out the precise attributes of the business you would like to build. How much will your revenues be? What products and services will you be offering customers? How many employees will you have? And, by what date will you achieve all this?

2) Have a Written Business Plan

Your vision is your dream. And to attain the dream, you need a business plan that details how you will achieve it.

Among other things, it must document your product strategy, your marketing strategy, and your human resource strategy. Your plan should detail your long-term vision, but focus more specifically on what you must accomplish in the next year.

3) Have Quarterly, Monthly, Weekly, And Daily Goals

If you were able to draw a line from where you are now to where you want your company to be, that line would be known as a trajectory. Success is about getting on the right trajectory. That is, as long as what you accomplish today, this week, this month and this year progresses you farther and farther along the line (versus going below the line or stagnating) then you will eventually reach your long term goal.

To stay on the right trajectory, you must set quarterly, monthly, weekly, and daily goals. Each goal should be set with an understanding of the larger goal. For example, figure out what you need to accomplish this quarter in order to properly progress towards your annual goal. And then figure out what you need to accomplish this month to properly progress towards your quarterly goal. And so on.

By creating and achieving these smaller, periodic goals, you start to ride the trajectory to your ultimate vision.

4) Educate Yourself Continually

To succeed you need to continually invest in educating yourself.

You should be reading the right books. You should be attending the right seminars, conferences and trade shows. And you must read the right newspapers, magazines, newsletters and blogs.

Do not skimp on spending money on educating yourself. Investing in your education (and that of your key employees) will generally give you a larger return on investment than anything else in your business.

5) Satisfy Your Customers

Satisfied customers are the key to your success. If you can’t satisfy customers, you will fail.

They say it takes one dissatisfied customer to undo the good that nine happy ones provide by spreading the word about their experience with you friend-to-friend or in online reviews.

You can satisfy your customers on the front end (at or immediately after the time of the first sale) by making the sales and delivery process smooth and seamless, by reducing the customer’s participation or steps required to use the product, by managing their expectations so that what they get is exactly what they were promised, and of course with spectacular customer service and support.
In addition to providing a great experience as just specified, the product or service you deliver them should be high quality and fully satisfy them.

6) Market to Your Customers

This is a big one, particularly since most business owners don’t do it enough. Most entrepreneurs and business owners are so focused on getting new customers that they neglect their current customers.

And, unlike prospective customers, current customers have a track record of buying from you…and are much more likely to buy from you again than prospective customers.

So spend time listening to and communicating with your current customers. Find out what that truly want and need, and stay top-of-mind so they buy from you again and again.

7) Be Laser-Focused in Your Work

This ties in with #3 (Have Quarterly, Monthly, Weekly, And Daily Goals), but deserves its own mention. Which is this: be sure to focus on one aspect of your business at a time. Conversely, trying to do too many things at once will diffuse your focus and inevitably result in failure.

Limit the number of projects you’re working on until they are finished. Remember, twenty projects that are 99% complete but not live yield less revenue that just one project that is 100% complete and live.

As we keep hearing in the presidential debates, you, the entrepreneurs and small business owners, are the backbone of our economy. Follow these strategies and you’ll be more successful, and so will the economy!

7 Proven Strategies to Methodically Grow Your Business Infographic

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Recommended Slideshare

Strategy #2 above is to have a written business plan. To help you expertly complete your business plan, we put together the slide presentation below to walk you through the “10 Key Elements of a Business Plan.”

Launching a new business is an exciting time. You’re eager to move things forward and begin building your dream.

However, in developing the perfect startup business plan, there are four keys you must follow.

Below you’ll learn those 4 keys and the 10 elements you must include in a winning startup business plan.

BONUS Alert: at the bottom of this article, you will find a free business plan template you can download and complete.

1. Market Viability

The first key to successfully launching a new business is to make sure you have a viable market. A viable market means that the market size is big enough to support your company, and ideally is growing in size. Conversely, if your market is too small, then you can’t succeed.

Let’s use an example. Let’s say that I want to offer pet cleaning services in my town and research shows there are only 18 people in my town who own pets. In this case, even if I get 100% of the market to use my services, and the average person spends $100 a month, this business could never generate more than $1,800 a month in revenue, and doesn’t have much growth opportunity. As such, this is not a viable market (unless I’m satisfied with a business generating $1800/month in sales).

Because this is so important to the success of your business, be sure to thoroughly conduct market research to prove your market’s viability.

2. Action Plan

The second key to successfully launching a new business is to document your action plan. To do this, write down the precise accomplishments you hope to achieve:

• Monthly for the next six months
• Quarterly for the following two quarters, and then
• Annually for the following two years

For example, you may write that in the current month, you will create your website.  Next month you conduct market research to determine underlying customer needs. The month after that you will hire your first employee. The following month you will start advertising your business. Then the following quarter you will make 100 phone calls per day to gain your first three customers.

By specifying precisely what you need to accomplish during each time period, you gain a better understanding of how your business should progress and the time and/or funding requirements of each activity. Equally, if not, more importantly, it forces you to set precise goals. The goals keep you focused and help you avoid being distracted by other opportunities and mundane tasks.

Most entrepreneurs severely underestimate the amount of time and number of steps required to launch a business.  By creating a detailed action plan month-by-month, particularly for the first six months, that lays out your plan, you will gain a better understanding of what’s required of you, and ultimately be much more successful.

3. Customer Traction

The next key to successfully launching a new business is to gain customer traction quickly.

“Customer traction” is when customers test and/or buy your product or service.  The earlier the traction you can get, the more successful you will be in launching your business.

Importantly, this involves getting your product or service into the hands of prospective customers as quickly as possible.  A lot of times we refer to this initial product as the MVP or Minimum Viable Product.  Your MVP is not the perfect, completed product that you ultimately envision, but it is a product that has enough functionality that customers can use it.

Importantly, by getting your MVP in the hands of customers, you can learn what they like about it, what they don’t like, and if they might eventually buy it.  This customer feedback is critical to launching a successful business.

You will get feedback with regards to price ranges customers might pay. You’ll learn the features they want and don’t want. This feedback tells you if you have a viable opportunity, that is if customers buy your product or service from you.

Note that in certain cases, it’s hard to gain customer traction in the earliest stages of a business. For example, when launching a restaurant, it’s hard to gain full customer traction or feedback until you’ve built out your restaurant, staffed it, and so on.

But still, there are creative ways to gain customer traction and feedback. For instance, perhaps you could set up a booth at a local festival, offer food and speak to customers. Figure out a way that gets your offering to customers quickly, as the feedback is often priceless.

4. Business Plan

To reiterate, there are three keys to successfully launching a new business.

1. Make sure you have a viable market
2. Document your action plan
3. Gain customer traction as quickly as possible

Once you’ve completed these steps, be sure to include them in your business plan. By detailing your market size and viability, your action plan, and the feedback and traction you’ve gain from customers, and combining this with other key information such as your marketing plan and financial model, you are on pace to create a business plan that investors and lenders will find irresistible.

Your startup business plan needs to include 10 sections as follows:

1. Executive Summary: This section sums up your entire plan and gives the reader a quick overview of what your company does and why it will be successful.

2. Company Analysis: provides an overview of your company’s status. Are you newly conceived? Have you been around for years? Are you incorporated? Where?

3. Industry Analysis: details your precise industry, its size, and trends that are shaping it.

4. Customer Analysis: discusses the key customer segment(s) you serve. Answer questions such as: What are their demographics (e.g., age, income, or industry and function if B2B)? What are their psychographics (e.g., what websites do they frequent)?

5. Competitive Analysis: shows your direct (similar offering to similar customers) and indirect competitors (similar offering to different customers OR different, but related offering to similar customers) and their strengths and weaknesses.

6. Marketing Plan: details your products/services you offer, your pricing strategy, your channel strategy (e.g., sell via a website, via partners, via wholesalers, etc.), and your promotions strategy.

7. Operations Plan: shows your short-term and long-term growth strategy and processes.

8. Management Team: includes your biography and biographies of other team members.

9. Financial Plan: provides an overview of your Income Statement, Balance Sheet and Cash Flow Statement, and discusses financing requirements.

10. Appendix: includes any supporting information such as your full financial projections (Income Statement, Balance Sheet and Cash Flow Statement) and other key information such as patents, lease agreements, etc.

Startup Business Plan Infographic

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Recommended Slideshare

In thinking about your startup business plan and successful launch, we put together the slide presentation below to give you inspiration from 2015’s Most Succesful Start-ups:

Your business plan is an absolutely critical document in determining the success of your business. That said, it’s probably not something you should rush. However, there are certainly times when you need to create a business plan quickly since you are so busy with other tasks. This article explains how to do just that. 

You’ll first learn 3 key organizational tips and then 2 tools that will allow you to more efficiently create your business plan. You’ll then see what research to assemble before starting your plan. Finally, you’ll learn what to put in each of the 10 sections of your business plan.

The 2 Keys to Your Success

The key to successfully creating your business plan in just one day is to:

1. Be highly organized
2. Have the tools you need

With regards to organization, it’s very similar to having a written shopping list when going to the supermarket. Better yet, a written list organized by aisle. Since we all know that when you go to the supermarket without a list, you either waste time going to the same aisle twice or forget something (and need to go back or live without it).

With regards to having the right tools, an analogy probably isn’t needed. But remember Abraham Lincoln’s famous quote, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” Now imagine chopping down the tree if you didn’t even have the right tool; that is, you didn’t even have an axe!

Organization

With regards to organization, I suggest the following:

• • Block out time to complete your plan. If you budget 8 hours for the total plan completion, I suggest four 2-hour blocks. During those blocks, you must remain 100% focused. That means no answering the phone, no checking email, no looking at social media, etc. Every time you lose focus, your productivity will suffer sorely.

• • Get the input you need from others before sitting down to write your plan. For example, if you have a marketing manager and she has the key details about your marketing plan, consult her prior to writing your plan. At a minimum, you should have a consensus about the key marketing elements such as how you will promote your company.

• • Assemble any business documents (e.g., incorporation papers) you have accumulated since your organization’s inception.

Tools

With regards to tools, have these handy:

• • A business plan template or a business plan outline: these will ensure speed since if you already have a document with section headers and/or questions to answer, it will be much faster than starting with and completing a blank document.

• • Appropriate word and spreadsheet processing software. While Microsoft Word and Excel are the standards, more and more options like Google documents are available. Use whatever word and spreadsheet processing software you are most comfortable with. Just make sure you have both as completing your plan without them will take much longer.

Market Research

Finally, ideally, you can complete the key market research for your business plan before sitting down to write your business plan.

This research includes:

• • Industry Research: which answers key questions such as how large your industry is and what trends, if any, are shaping it.

• • Customer Research: which answers questions about your target market such as how many people comprise it, what their demographic make-up is (e.g., age, gender, socioeconomic status), etc.

• • Competitive Research: which details not only who your key direct and indirect competitors are, but their strengths and weaknesses.

Let’s Get Started

Now that you’re organized and have the tools and market research you need, it’s time to get started on your plan.

Below are the 10 key elements of your business plan and how to complete them most effectively.

Section 1: Executive Summary

Your Executive Summary is the most important part of your business plan, since if it doesn’t excite readers, they’ll never get beyond it to the rest of your plan.

Complete your Executive Summary last, and have it include a brief synopsis of all the other sections of your plan. Of critical importance, you Executive Summary MUST answer why your business is unique. That is, what is it about you, your products/services, your market, your marketing plan and/or anything else that makes you extremely likely to succeed? Answering this is the cornerstone of not only a successful business plan but a successful business, so spend time on this one.

Section 2: Company Analysis

Your Company Analysis gives a snapshot of the current state of your company. If you’ve incorporated, you’ll state your type of business (e.g, C-Corp) and the date of your incorporation (remember, you pulled out this documentation in the Organization phase above).

Even if you’re just starting out, you can provide background information such as when and why your idea for the business was conceived.

Section 3: Industry Analysis

Here is where you’ll include the industry research you conducted above.

Importantly, don’t just copy/paste a research report into your business plan. Rather, the ideal research helps prove the viability of your business. For example try to show how industry trends favor your success.

Section 4: Customer Analysis

Above you identified your target customers, and conducted research into their demographic profiles. When targeting consumers, these profiles include factors such as their age, gender, and socioeconomic status as mentioned above. If targeting businesses, detail the types of businesses (e.g., size, location, industry) and the target contacts (e.g., title, function) within those businesses.

Section 5: Competitive Analysis

This is the final “research” section of your business plan, where you will detail your direct (similar offering to similar customers) and indirect competitors (similar offering to different customers OR different, but related offering to similar customers).

For your top 3-5 direct competitors, document each of their strengths and weaknesses. Then document the strengths and weaknesses of your indirect competitors as a whole.

Section 6: Marketing Plan

There are four sub-parts to your marketing plan:

1. The products and services you offer: document them

2. Your pricing strategy: tell what it is; are you the low-cost provider? The premium cost?

3. Your channel strategy: how will customers buy your products/services (e.g., sell via your website, via retailers, etc.).

4. Your promotions strategy: how will customers hear about you: pay-per-click advertising, social media, etc.

Section 7: Operations Plan

Here you will document your growth plan.

To do this, write down the next 6 months, the following 2 quarters and the following 2 years and detail the key accomplishments you plan to attain during those time periods.

For example, if today were January 1, 2020, your operations plan would look as follows:

• January 2020
• February 2020
• March 2020
• April 2020
• May 2020
• June 2020
• 3rd Quarter 2020
• 4th Quarter 2020
• Annual 2021
• Annual 2022

Once again, for each of these time periods, you would detail your key goals.

Note that the reason we start monthly and then move to quarterly and annually is that it’s much easier to determine market conditions in the short term. Longer-term there is much more uncertainty and it’s thus harder to predict what will happen.

Section 8: Management Team

In your Management Team section, write the key facts about yourself and other key members of your team. This is often written the same way as the “Management Team” or “About Us” sections of most websites.

Tell the past accomplishments of team members here. If you are planning to add key team members in the future, document the roles you will fill and the key criteria you will use to fill the roles.

Section 9: Financial Plan

The Financial Plan includes two elements.

The first element is completing, in a spreadsheet, your Income Statement, Balance Sheet and Cash Flow Statement. These three financial documents detail key information such as the profitability of your business and how much funding, if applicable, is needed to grow the business. Your full financial statements will appear in your Appendix.

The second element is completing the section of your word document. In this section, you will show summary/top-level figures from your financial statements such as your Revenue and Profit projections for the next five years.

You will also provide written commentary supporting your financials, such as how you will generate the sales you expect and any key assumptions you’ve made.

Section 10: Appendix

Your Appendix will include any supporting information. As mentioned above, your full financial statements will go here. But also include any other information that supports your potential future success such as references from customers, signed contracts or purchase orders, etc.

The Time is Now

You now have all the information you need to complete your business plan in just one day.

Remember, start by organizing your efforts and making sure you have the right tools. This seemingly simple first step makes a huge difference.

Then methodically make your way through the 10 business plan sections. Don’t allow yourself to be stumped in any one section. Rather, if you get stuck, move on and come back to it. This way, you’ll make lots of progress quickly, and most likely when you come back to the issue that stumped you earlier, you’ll already have conceived an answer.

How to Create a Business Plan in 1 Day Infographic

Below is an infographic of this article for quick reference.

Recommended Slideshare

To further help you expertly create a business plan in one day, we put together the slide presentation below to walk you through the “10 Key Elements of a Business Plan.”

There is one business plan tip I give above all else, particularly if the goal of your business plan is to access funding.

This tip is to treat your business plan like a brochure or marketing document with the key goal being to get readers excited about your company. This tip and other critical business plan tips are explained in detail below.

Your Business Plan as a Brochure

When you create a brochure, you must determine they key value propositions that customers care about. For example, in the toothpaste business, certain brands promote whitening your teeth. Others promote anti-cavity properties. Some focus on fresh breath and still others promote all or several of these value propositions.

What toothpaste companies do is very simple, but powerful: they figure out what their customers want, and then position their offering as the perfect solution. Importantly, in addition to simply telling customers their product is right, they prove it. For instance, they mention their ingredients, show before and after photos, or tell what percentage of dentists trust them.

Identify Your Target Audience & Needs

Now, let’s move back to your business plan. Because a successful business plan does much of what the toothpaste companies do. The first thing to do when creating your business plan is to identify your target audience. This audience may, for example, be banks, angel investors or venture capitalists.

Next, think about their needs. Their needs are generally to fund a company that’s going to give them the greatest potential for a high return on their investment with the lowest possible risk

Prove Your Case in Your Business Plan

So, to write a business plan that gets you funded, you need to convince readers that you have a business with growth potential and with as little risk as possible.

You also need to show you have a product or service with unique attributes. And you want to prove your market is large, and ideally growing, and present your proof in the form of market research and statistics.

Finally, you want to prove the competence of your team. Show what your team has already accomplished in the past, in order to give readers the impression they can do it again.

More Tips

Some additional business plan tips to boost your chances of raising funding include:

• Proofread your plan. Typos and/or grammatical errors will cause you and your plan to lose credibility.
• Keep it concise: 15 to 25 pages is a great length for a business plan. Don’t bore your readers with useless information.
• Create realistic financial assumptions: don’t show growth rates that no company in the history of the world has ever achieved

Summary

To summarize, in order to write a business plan that gets you funded, you need to start by considering your target market. Think about their needs and the value proposition they seek. Then deliver your answers in a well-written, easy to digest document that excites rather than bores them. Keep your plan concise and well-formatted, with realistic assumptions, and you will put yourself in the best position possible to raise money for your business.

Business Plan Tips Infographic

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Business Plan Tips Slideshare

We put together the slide presentation below to show you “10 Tips For a Successful Business Launch.” In addition to the business plan tips above, this should help you better understand the keys to ultimate building a thriving business. Good luck!