Tips for Crafting a Great Business Plan
In order to create your business plan, you'll have to learn to write, or hire, cajole or entice a writer to work with you. Your plan must show you've mastered the business. Bad writing comes across as muddled thinking-not mastery. Besides, bad writing is dreadful to read, and venture capitalists have to read a lot of it each year. Trust me-I've seen some of these plans. Clear writing puts you far ahead of the pack.
First off, stay far away from business plan software. Your plan is the opening line in the romance you'll have with your investors. After reading six dozen plans created by the same software program, an investor gets jaded. The once-original opening line has become the electronic equivalent of "What's a nice idea like you doing in a plan like this?"
A good book will guide you through the basic issues. My favorite is New Venture Creation by Jeffry A. Timmons. Be sure to get the 1995 version, not the 1998 edition. The book takes you through the logic and research needed to turn your idea into a business.
When you've thought through your business, sit down with a friend and a tape recorder. Work through the topics by talking and taping the conversation. Start with your elevator pitch-three or four powerful sentences that summarize your product or service and the need it fills. For example, "We make razors for men ages 15 to 80 that make them look great by shaving closer and more safely than anything on the market."
Next, talk through your business:
Product/service: What are you selling?
Market: Who buys it? What need does it fill? How many people can you reach?
Business model: How do you make money?
Competition: What do people use instead? (Your competition may not be in the same industry! Quicken, which is personal finance software, competes with a pencil-and-paper checkbook.)
Financing: How much money do you want? On what terms? How will you use it?
People: Who are your teammates and your advisors? Why does having them involved make you more likely to succeed than your competitors?
Partners: Who will you pursue as partners? Why?
And talk through your progress-to-date:
Customers: Who are your current ones? Are new customers in the pipeline?
Partners: Who do you have signed up as partners?
Money: What's your actual revenue to date?
Business development: What's your development schedule (milestones and progress you've made)?
After recording your discussion, play back the tape and use a transcription service to turn the tape into a document you can edit. Then you can hire a writer to turn the text into a more polished plan.
Work closely with any writer you hire. Some just write while others will do research and help you refine your business strategy. Ask them which kind they are before you hire them. And be intimately familiar with what they write-you can delegate writing, but you can't delegate logic. Investors will ask you, not them, about the business. Knowing your plan and answering questions about it are your responsibility.
Here are some other resources to help you put together a great business plan:
- Highscribe Transcription Services is a transcription service provider that deals with the documentary production, advertising, marketing and legal industries and accepts jobs of any size. For other transcription services, search http://www.dmoz.com.
- If you're looking for business plan writers and editors for hire, visit vFinance.com, Aquent or CyberEdit.
As an entrepreneur, technologist, advisor and coach, Stever Robbins seeks out and identifies high-potential startups to help them develop the skills, attitudes and capabilities they need to succeed. He has been involved with startup companies since 1978 and is currently an investor or advisor to several technology and Internet companies including ZEFER Corp., University Access Inc., RenalTech, Crimson Soutions and PrimeSource. He has been using the Internet since 1977, was a co-founder of FTP Software in 1986, and worked on the design team of Harvard Business School's "Foundations" program. Stever holds an MBA from Harvard Business School and a computer science degree from MIT. Visit his Web site at http://www.venturecoach.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.