Puxatawney Phil has a very important metaphor for Entrepreneurs and their business plan....
If you lead with it, will you ever hear from an investor again?
Investors invest in the jockey, not the horse. Many self-proclaimed 'business coaches' and professors at business schools, teaching MBA candidates give what is perhaps the worst advice in the world: "to lead with a business plan." If they want to read a plan, they will ask for one. It doesn't work today, and it certainly was never that effective in the 'old school'. Fact is, some sent it to people they knew and it worked, so this then became the industry standard.
Very few so-called "experts" realize that VCs receive up to 40 plans per day... that's as much as 200 a week. They don't have time. If they added and looked at all the plans on line, that would add tens of thousands more. This is through no fault of the posters, they've probably never worked in VC or may not know many.
Few Entrepreneurs can even write a good business plan, so they end up looking worse. Too many plans matriculating and not enough hours in a day for investors to read them, spell doom and certainly is not a good first impression and you rarely - if ever - get a second chance.
Leading with a business plan is a waste of an opportunity, a waste of the time of the investor, and the Entrepreneur. It sends the wrong message. Don't get me wrong, will some investors read them before signing checks? Yes. Will they write a check before getting to know you? No. So why put your plan out there? It's like walking onto a used car lot and being told "Have I got the car for you" before the salesman says, "Hello." If you start by selling, you increase your chances for failure and practically guarantee it. If you can't raise capital, you can't get to the next level.
I get plans submitted to me just because I help people or because people know I write checks. The bottom line is that an investor is concerned with how they will get their money back and what is their reason for putting in the money.
Do you want your business to see it's shadow again?
All you really need are the following: Executive Summary, Projections and answer these four questions: Is there a market? What is the strategy to serve the market? Who is the management? Do I like you and do I believe in you? (You might call the last one two, but I see it as one whole, as do most who write checks.)
Chances are, you need other things than just capital. If you've read this far, and you are seeking to raise capital, then you'll probably be very intrigued in this You Tube Short: http://www.youtube.com/watch?v=gn64F3ysPvI
Dave Phillipson, CP
The World's Largest, Oldest & Most
Successful Organization for CEOs,
Entrepreneurs & Visionary Investors
Dave [at] GlobalCEOspace.com
P.S. Those that know me, understand there's not much that gets me as excited as helping a fellow entrepreneur. I'm passionate about sharing my resources, knowledge, and elite connections in order to build business cooperatively.
I do this by receiving referrals from people like you. Who do you know that's a business owner?