Note: This month I am passing on the advice of SCORE mentor, angel investor and CFO extraordinaire, Hal Shelton. Hal’s 11 commandments for writing a business plan extract the most important thinking and actions of the business plan process. See last week’s post for the first installment.
For many of us the most intimidating part of writing a business plan is the length itself. We look at the outline of sections and subsections and quickly feel overwhelmed and overworked. This week we highlight the three most important sections. Focus on these parts and the core of your strategy and plan will be solid for the year.
4. The Owner’s Biography: As a small business is usually a bet on the entrepreneur, provide a bio that demonstrates you have the technical and leadership experience to drive your idea to success. Demonstrate you have the experience or you have surrounded yourself with others who have it. Funders, whether personal friends, stern bankers or demanding angel investors, know they are investing in you as the owner. You are contributing most of the “assets” – your time, your talents and your passion for birthing this business idea into the marketplace. Your biography, therefore, should not be a LinkedIn type listing of your education and experience. Instead make the case for why you are the right person at the right time to own and operate this business. For more tips on writing an effective bio, click here.
5. The Executive Summary section of the business plan is the most important—it delivers the message and sets the tone. It should be enthusiastic, concise, professional and no more than two pages. Just as in the first few paragraphs of any good book, many people will not read past the Executive Summary. You need to “hook” the reader into believing this business will be successful, by describing what customer needs are fulfilled, how this business idea sets itself apart from all the other competing alternatives available in the marketplace and the rewards (financial and otherwise) to be obtained. Focus on writing this compelling short story in two pages or less. And while it comes first, write it last to ensure all your core ideas are included.
6. Marketing and Sales Action Plan: Have sales goals that are supported by research and an actionable marketing plan. This is your first and most important sales job. Where and how are you going to capture revenue? Work backwards. What are the specific names of your first prospects? What is your sales pitch for gaining the sale? How will they even become aware of your company in the first place? If the argument and support is not convincing, the banker, angel investor, vendor or customer will arbitrarily give your projections a “hair cut.” This means less investment and cash flow for you. If you are the investor, it is even more important that you think through the numbers before investing your precious savings.
Next week: Getting the support you need to make your plan a success.