Now that you've invested dozens of hours doing research, compiling data, organizing your information and writing it down, it's time to consider how to present your plan to prospective lenders or investors. But first, you may want to take some time to clear your mind. Let the plan sit for a few days, then review it with fresh eyes. Better yet, hire a business plan consultant to give you a different perspective and offer suggestions for improvement. Once you’re confident that your written plan is in its final form, you’re ready to figure out how to present it.
The Written Business Plan Presentation
The importance of your plan's appearance can't be understated: it's your business's first impression. If your plan looks sloppy, readers may assume that the information it contains is inaccurate and not well-thought-out and that your business is run carelessly.
Include a cover letter to introduce yourself and your plan. A title page and table of contents will show that you are professional and organized and will help the reader to locate key information within your plan. Include subsections in your table of contents so that, for example, the reader can easily locate your income statement instead of having to thumb through the entire financial plan section to find it. Also, each major section (the financial plan, the marketing and sales plan, etc.) may benefit from a brief summary at the beginning that ranges in length from one paragraph to one page, depending on how much material it’s summarizing.
Nothing says you have to lay out your plan exactly as described in this tutorial. While it is important to include all the information we've discussed, you may find, for example, that even though marketing and sales are closely intertwined, you have enough to say about each subject that you would rather present them in separate sections. There is also flexibility in the order in which you present your plan, outside of putting the title page, table of contents and executive summary at the beginning, in that order, and the appendix at the very end. Present your information in a logical order, but be aware that financiers are likely to skip around and read the information in the order that best suits their purposes rather than reading the plan from cover to cover.
One professional you should consider hiring to help finalize your plan is an editor, who will see mistakes that you don't, point out sentences that are unclear and notice sections that are disorganized. An editor will make sure that the tone of your business plan is appropriate – formal, but easy to understand. He or she will also make sure there are no spelling or grammar errors. Overall, a professional editor will make the plan more readable and make sure your message is presented clearly and concisely. Concise doesn't mean that you have to leave out important details to save space, but that you present all the necessary information in the most efficient way possible.
Further, while an outside editor won’t be looking at your plan from the same perspective that an investor or lender would, they will be looking at it with the same lack of inside information that those readers will have, which means they will notice the parts of your plan that aren’t explained clearly and help you rewrite them in a way that people who don’t work for your company can understand. Complete the professional editing before the design and layout to make sure the designer isn’t wasting time trying to figure out how to put material you will later change or cut on the page, then do a final round of proofreading after the editing and design are complete.
Your plan must have a formal layout with consistent formatting. It should use visual aids where appropriate, but any graphics you include must be relevant and professional – think charts, graphs and tables presenting pertinent data, and photos of your actual business, not stock photos. Hire a professional graphic designer to give your plan a polished look. (For more, see 4 Steps To Creating A Stellar Business Plan.)
Including an appendix section in your business plan allows you to supplement the information provided in the main sections. Since you don't want your main sections to be too long or too detailed, the appendix is where you should include supporting documents that provide additional details that potential lenders and investors will want to see if they decide that your plan has merit.
For example, while you should have provided descriptions of your professional background and the professional backgrounds of your management team and key employees in the main document, you should save full resumes for the appendix. Your appendix could also include letters of reference from individuals familiar with your business performance, such as former bosses and high-level co-workers; additional details from your market research; legal documents such as your business license, articles of incorporation, and the lease or purchase agreement for the building you will operate out of, and more.
You might also need the most recent two to three years of tax returns for each owner if your business is new, or the returns for your business if it is already established. Because of the sensitive data that tax returns contain, you should find out if they are required before you include them. If they are, thoroughly block out Social Security and business tax ID numbers.
Finally, anything else you think is important enough to be part of the business plan but too cumbersome to include in the main document can go in the appendix.
The Oral Business Plan Presentation
If you have excelled in putting together your written business plan, you will have a chance to make your case on the phone, by videoconference or in person. You must be thoroughly prepared to make a positive and lasting personal impression and a strong argument for your business. How will you accomplish this?
First, practice your pitch. Even though the potential backer should have looked at your business plan by this point, you should still prepare a short summary speech that highlights the points you made in your executive summary. Don't memorize an entire speech; just memorize the outline of what you want to say. That way, you will hit all of the important points but sound sincere in your delivery. You may even want to visit a public speaking club such as Toastmasters to practice your speaking and presentation skills ahead of time and get constructive feedback. Even if you don't want to present the plan itself to a group of strangers since it may contain proprietary business ideas, getting practice speaking on other topics will still help you. (For more, check out What Is An Entrepreneur's Elevator Pitch?)
Brainstorm questions that the person or group you are meeting with is likely to ask you, and prepare answers to those questions. It might help to ask trusted, business-savvy friends to review key parts of your plan as devil's advocates so you can practice and be prepared to defend everything in your plan.
A common mistake business owners make is to get feedback only from friends and relatives. The problem with this approach is that, often, the people who care about you will be inclined to support you or tell you that your ideas are good because they believe in you, don't want to hurt your feelings or don’t know enough about the industry to know if your business idea is viable. Even if you have less-sympathetic, brutally honest friends and relatives – even ones who are totally skeptical that your idea has any merit – they may not understand your idea from a business or investment perspective, and thus will not be able to provide the kind of feedback you really need.
Know Your Financials
Further, to have a successful business plan presentation, you must thoroughly understand the basic financials included in your plan. Plenty of entrepreneurs didn’t major in finance or get an MBA, and you don’t need to memorize every detail, but, as the owner, you should understand enough to speak about your own business’s finances intelligently. How much money are you contributing to the business? How much financing are you requesting? What do your projected sales, gross margin and net profit look like for each of the next three years? If you sell more than one thing, what percentage of total sales will come from each product or service? By when will you be able to repay the loan or implement an exit strategy for investors? Bring other members of your management team onto the call or into the meeting to strengthen your presentation and compensate for any weaknesses you may have. For in-person meetings, make sure that you present yourself with a professional and confident appearance and manner, just like you would for a job interview.
Success or Failure
Whether you're presenting your business plan in writing or in person, remember that the presentation itself must be engaging or your business, not just your presentation, will seem unappealing. Don't assume that your audience is familiar with your industry or line of business, and avoid using industry jargon or acronyms. Make your case from the potential lender or investor's perspective; offer a realistic risk and return scenario and one that fits the profile of their usual investments.
Plan to shop around for financing: first, because you may be rejected several times, and second, because one offer may be more favorable than another. If you are rejected, and there's a very good chance you will be at first, don’t assume that your business idea isn't viable. It may be that your business opportunity isn't the right match for that particular investor or lender, or that something is lacking from your plan or your presentation. If you are rejected, set aside your pride and get as much information as possible about why that person wasn't interested so you can fix problems and improve your chances of succeeding at your next pitch.
If your business plan is rejected repeatedly, there's probably a good reason for it. Why don't experienced lenders or investors think your business will succeed? How can you change your business model and reformulate your plan into something that has greater potential? Would the lender or investor be willing to consider an improved version of your proposal at a later date, or are they uninterested no matter what?
Finally, sometimes unfavorable economic conditions will prevent a funding request from getting approved. Don’t be too quick to blame the economy – startups can get funded and succeed even during a recession – but consider the possibility that your idea might look more appealing in a better economic climate, which means you’ll have to work harder if you want to scale it up right now. Also, sometimes you can borrow with a Small Business Administration loan when you can’t borrow from anyone else. Traditional lenders fund these loans, but the government guarantees partial repayment if you default to entice lenders to extend funds to businesses they would otherwise consider too risky. That being said, if the only loan you qualify for is a high-risk loan, ask yourself if your business is really ready to borrow capital or if there are problems that need to be worked out first. (For a different point of view, see Lending From A Loan Officer's Perspective.)
Business Plan: Conclusion
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