There are few people more zealous than an entrepreneur with a business plan. Confident of imminent success, they sincerely declare that if they had the money they would invest instantly. Their contribution is of course the emotional energy in developing a great new idea, which they are now prepared to share with investors.
Countering this unbridled enthusiasm, the savvy investor can hear ringing in their ears, the unofficial mantra of investors, ‘A fool and their money are soon parted’. Investors regularly fail to find the entrepreneurs zeal contagious when presented with nothing more than a template-style business plan. Inspiring investors to open their hearts to opportunism, and thereby take a leap of faith and invest their money, will require a killer business plan. And here’s how to do it.
Synchronise your elevator pitch to the business plan message
That 30 seconds of passion is the summary of your story. The business plan must be the expanded version. Unfortunately, so many times business plans are so formatted and predictable that not only has the zeal gone, but boredom now dominates.
If the elevator speech was any good, you will have recited it more times than you can remember. The risk is that the business plan may well end up in front of someone who remembers your elevator pitch. It is vital to stay on message or you will have lost the plot.
Get a credible business plan
Google will provide many templates. Pick one that you are comfortable with and enhance it so that you love it. Yes, love it. Change it to suit the way you wish to present it. It is now your story with a list of mandatory chapters to meet the needs of investors. Know and understand it as well as you know your elevator pitch. This is a bigger challenge but so too is the opportunity.
The business plan will become your constant companion which you must know in detail and understand every nuance of. It is the second most important prop in your mission to persuade an investor to take the leap of faith and invest.
Share the knowledge
There is a fine line between having credibility by using knowledge, and coming across as a know-all. Share your knowledge in your business plan. Be detailed and have references for every concept, acronym or unusual word in the business plan. Have a glossary that supports the reader. If an investor does not understand any word or concept they will not ask, they will take flight. Empower your audience with knowledge such that they feel comfortable reading your business plan.
Be brave enough to tell then your real story
Share your hopes and fears about the business. Declare your biggest dream for the business. You can always tell an investor that you want to be richer. They will quietly agree; otherwise, why would they even talk to you? Reveal your personal goals.
Why you are where you are at this point of your career. It is not only about money, it’s about your motivation. Tell them that if the venture is successful, where to next – build it, sell it, keep it, buy out the investors, float it?
The frantic desire to get investors in the business can often cause an entrepreneur to overlook the reality that all investors also want an exit. Crass as it may seem, investors want their money back with a profit. The better the exit, the more likely they are to commit. Have it mapped out in detail. Suggest who would buy their shares at various stages of the start-up’s journey.
The last ingredient of a killer business plan is more out there than most. It’s about you. So many entrepreneurs are gifted and talented but fail to realise that while they are risking their time and opportunity, the investor is taking a far greater risk with capital and having almost no control over a widely variable component of the business plan, namely, you, the entrepreneur.
A killer business plan is all of the above plus it is presented by a knowledgeable entrepreneur, with respect and empathy for the real risk-taker: the investor.