Category Archives: business plans

Finally we're writing the all important Executive Summary to the Business Plan. And, of course, it has to be concise.

(Most advice also says to write it last, but I think it's a good starting point as an outline of all the points you will cover in more detail - so I recommend that you do a draft Executive Summary first.)

But the final objective is prepare a brief (1 - 3 page) summary of the key points in your Business Plan, which might be a 20-page document or more, plus all the supporting data in appendices.

An excellent guide to the Executive Summary is available at Garage Technology Ventures (Garage.com). They emphasize that aside from being concise and still answering all the important questions the Executive Summary is primarily a selling tool for your Business Plan. It allows potential lenders, investors or strategic partners to quickly decide if they are interested in participating in your plan.
And even more important than the executive summary is that one sentence or paragraph in your cover letter or e-mail (or elevator pitch) that convinces them you may be onto something that could be a viable business.

Enjoy the Winter Olympics in Vancouver, but don't miss the opportunity to learn some lessons to help your business go for gold!

You can help your business to perform like an Olympic champion if you take these ideas from the Olympics as your inspiration:
  • Have a four-year plan to achieve Olympic records
  • Decide: Go for gold, or Quit.
  • Learn from your losses
  • Push your limits
  • It's not for the money
  • Don't cheat
  • It's never too late

To see the full article visit: "Olympic Lessons for Entrepreneurs."

Be inspired to take your performance to Olympic heights.

Introducing Guy Kawasaki, former Apple Mac evangelist, venture capitalist and business philosopher.

I've added him to my recommended Blogs, based on two great articles; 10-20-30 guide to PowerPoint and Zen for Business Plans (look 'em up on Google before you see it here).

His first Blog by way of introduction.

Better Late Than Arrogant

Welcome to my first attempt at blogging. Admittedly, I’m three years behind the bleeding edge, but I had to get over the inherent arrogance of blogging: that people would give a shitake about what I have to say.
A book every two or three years is one thing, but a daily blog? (Not that I’m committing to daily blog.) However, many people pounded on me, so here goes. Not that you can hold me to this, but I’ll write about entrepreneurship, venture capital, innovation, public speaking, Macintosh, and hockey.
From time to time, I will also discuss things that I do not “know,” but I’ve never let ignorance get in the way of expressing an opinion—and clearly, very few bloggers do! So let the good times roll…

Written at Atherton, California.
December 30, 2005.

I have to agree with what he says about bloggers. I reached the same conclusion about writing for myself - who cares if I know what I'm talking about! I have an opinion or an idea and I'm determined to share it. Although I do try to remember the warning from my mother, "Don't waste your time confusing them with the facts when they've already made up their minds." I don't want to be one of those people.

The most common reason for preparing a business plan is because the bank asked for one before evaluating a request for financing.

We've already discussed that a well prepared business plan document may still not be enough when it's finally delivered. Next comes the negotiating phase. The lesson that was recently confirmed was not to be deterred by questions and requests for more information, but do not be persuaded to go back and revise the Business Plan document. That will only cause the bankers to recycle through the process of internal review, look for the answers and revisions and probably come up with more questions. It may be a good stalling strategy to avoid the "no", but the entrepreneur wants to move forward to a clear "yes", or "no".

So we agreed to respond to the specific questions in a short follow-up note using the approach of "Thank you for reviewing our plan. Here are the answers to your questions and we now look forward to a favourable reply to our request for funds". It worked.

And I got that very pleasant consulting feedback of: "Hey Del, they really liked the Business Plan and our answers to their questions. We're getting the financing!"

A good lesson in effective use of the Business Plan as a negotiating tool. I hope it works for you.

I had a banker comment this week on my earlier posted opinion that it is important to know all the requirements before starting on a futile business planning exercise that still won't get the financing required.

He disagreed.

It's always a necessary and useful step he said. And he's right.

At some point the entrepreneur has to test his plan against the real world and its better to know now, rather than later, that the plan needs to be changed for it be a successful business. If more equity is required or a new cost and risk reduced plan is necessary, then at least we now know exactly what is required before we get a third party to invest. It also helps to look further ahead to make sure we don't just have enough financing to dig ourselves into a hole and not enough to work our way out of it.

It's a good start along the path of "no surprises" management.

Asking for more information is often just another way of postponing the inevitable "no".

I've learned this is often the way potential investors or bankers manage to turn off the entrepreneur without ever being so direct as saying "No, I'm not interested." It would be even more helpful if they continued with "because ...". But they usually don't offer much explanation (or the real reason) and the entrepreneurs doesn't ask.

The first question investors and lenders do ask is, "Can I see your Business Plan?" And that often leads to work for me to help with the strategizing, documentation and financial analysis, but I always ask the entrepreneurs if the Business Plan is the only thing left to satisfy the lender or investor. Too often, after we have spent time and effort and cash to prepare a solid business plan that confirms the prospect of a viable business and the potential returns to investors and lenders, we then discover that the owners cannot put up the equity or the collateral that is required. We should have known that from the start.

It may come out during the planning process and the analysis of cash requirements, but it would be helpful to know the guidelines in advance. If you need $500,000 then the banker or investor probably wants your investment and guarantees to be a lot more than the $25,000 you've arranged.

All lenders and investors have a checklist. Be sure you are aware of the whole list and whether you can meet all the requirements, beyond a good Business Plan.

The start of a new year is a good time to look back and plan ahead. (Sounds dangerous. May explain the pain in my neck.)

However, looking back at 2007 can you conclude on the mistakes you would rather not repeat or the things you would like to do more often? Or maybe the issues and ideas that were completetly neglected? Select your priorities and include them in your plan for 2008.

Is it time for a radical new strategy or simply continuous improvement of a well established formula for success. Don't forget to look outside your business at your personal priorities. Is it time to fix the foundations of family, friends, physical and financial health?

And don't try to do too much. Small successes will usually add up to more than a few big ideas that don't get finished. Good luck.

That was the advice of David Lank, Director of the Dobson Centre for Entrepreneurial Studies at McGill, in a seminar last evening. I agree that anyone can be, but not everyone should be, and not everyone wants to be.

As David suggested, why would anyone want to be an entrepreneur when they know that:

  1. You will not really work for yourself, but instead for all the people that depend on you.
  2. The world really doesn't care about you or your business.
  3. Most new businessses fail.

The first test of a real entrepreneur, of course, is that he/she proceeds with enthusiasm in spite of all that knowledge. In David's opinion, based on providing start-up capital to more than 140 companies during his career in venture capital, the most important element in deciding to invest in an entrepreneur is the passion they demonstrate in support of their plan.

A formal business plan is always required, but that is less important than the passion factor. The most important element required for favourable consideration of the business plan is the understanding of reality communicated by the entrepreneur.

Good perspectives to keep in mind.