How to Ensure Your Business Plan Conveys a Compelling Message
by Mike Elia
When you make any statement or claim in your business plan, don't think about how it comes out of your mouth; think about how prospective investors’ will hear it. If you do this, you just might catch yourself thinking this statement sounds ridiculous, non-compelling, or worse yet... not very convincing.
Your business plan must convey a message that compels prospective investors to conclude, "This is the business venture and team I want to back."
To judge whether or not the statements you write in your business plan are truly compelling – before you actually put them in front of potential investors – use this simple evaluation. Ask yourself if the claim or statement would trigger a prospective investor to respond by saying "Well, I would expect so!"
To illustrate this, let’s say you’re describing in your business plan why a customer would favor your business over your competition. After you write the statement use the "Well, I Would Expect So" evaluation and see if the answers hold weight. To show you what I mean, consider a start-up aircraft lighting company that explained why airlines would chose them over traditional equipment providers by saying: "We offer brighter, more reliable, aftermarket lighting systems." Can’t you hear a prospective investor exclaim, “Well, I would expect so! You're in the lighting business! Isn't that what you’re supposed to do?” See how weak this statement sounds?
Now suppose they said something like this: “At three- hundred miles per hour, our lighting systems give pilots 250 more yards of visibility and 4.2 seconds more reaction time to avoid potential disasters.” Do you think this would spark the same type of response? I don’t think so.
Are you getting the idea about how this evaluation works? Just read any statement in your business plan to see if it would cause a prospective investor to respond with “Well, I would expect so!”
Let’s take another company. This one plans to develop a national chain of personal beautification centers. Here’s their differentiation claim, "We help people look their best." Well, I would expect so. What else would you expect them to say? "Hey, we're lousy. We'll make you look worse than before and have you back to work in no time." You've got to articulate what you do better than that. Force yourself to break away from the usual platitudes and generalities of lazy communicators and say what you need to say well.
Use this important evaluation question whenever you make any claim in your business plan. In fact, apply this test right now to each section of your business plan. Then honestly evaluate your answers against the "Well, I would expect so!" evaluation. Go ahead, pick any section of your business plan and apply this evaluation to each of your claims. If your statement produces a mind numbing “Well I would expect so” response, then you can bet your prospective investors will have the same reaction to it.
After you complete one section of the plan, move on to the next. Do they pass the "Well, I would expect so!" evaluation? If not, be more articulate and change the statement immediately.
It’s sad when businesses with truly differentiated advantages either don’t take the time or don't know how to articulate their superiority. They settle for "Well, I would expect so!" verbiage in their business plans and fail to build a case for their respective businesses that lead investors to conclude that their venture is the obvious investment choice.
Here’s the take away. Realize that you can make your business plan more compelling, help potential investors draw better conclusions, and build a better case for investing in your business venture than just churning out lazy statements with little or no meaning.
Mike Elia is a chief financial officer and advisor to venture capitalists and leverage buyout specialists. His manual Business Plan Secrets Revealed shows how to make your business the most appealing investment choice.