J.P. Morgan, right: He had a Business Plan
By Mark Carreño
A business plan is beneficial only if it is updated frequently to reflect the current changes in your business. A constant review and study of your projections against what actual real sales in your company helps to refine and adjust your numbers. Use the business results to analyze and make changes that are working well for the company. Then you can implement real changes and make decisions that give you a competitive edge and a new outlook for a more profitable business.
A professional business plan is a reflection into your business for investors or lender’s to judge and qualify your company for potential success. The plan should be concise and run no more than 50 pages in length, excluding much of the supporting documents, which may be irrelevant to current business. If you are seeking an investor or loan from a lender simply include only the supporting information that of immediate interest to your the direct person examining and reviewing the business plan.
Keep the other supporting documents on file where they will be available on short notice. The supporting documents could be: distributor letters; Presale letters, Supporting Financial Documents, Financial Schedules, Insurance Letters, lease contracts, Projection, letters of interest from buyers, distributors and others.
Make your business plan presentable by binding it professionally yourself or at a local printer. Keep it simple and use traditional black, blue or brown formal covers. Make individual copies for each lender or investor then, number each proposal, recording each lender and investor name, business name, address, phone number, date of submission.
Keep a wish list of all your investor contacts and track your list with care.
You want your plan to be read by only qualified investors and lenders. It should be very carefully distributed. Try to learn as much as you can about the investor so they don’t waste your time. Research the investor and his investments so when you make a cold call you are prepared so you can decide if it is worth meeting the investor, mailing out the business plan or simply not doing anything.
Be careful and polite on the phone and ask them why would they be interested in your category of business? For example, an IT firm will usually not invest in an advertising agency. Take it from me their thinking or model does not match up well with an advertising agency model or approach to business.
Look for businesses you can align with that have an interest in you and your business. Do not give out too many copies at once. You don’t want to expose your business plan to the marketplace at once. A non-disclosure agreement should accompany your business plan for some level of privacy for your business. If you are turned down for financing, be sure to retrieve your business plan. Find out why they turned you down and on what basis. This may help you polish the plan.
Also remember the plan must be updated while you are raising funds! KEEP IT CURRENT!
(Mark J. Carreño is president of C&C Associates, Los Angeles, and can be reached via (310) 869-3360/ (310) 869-3360, or at http://ccbuildsbusiness.blogspot.com).