Hi, I’m Evan Carmichael. Welcome to another edition of Ask Evan. In today’s episode I’m going to answer a question from Freddyca who’s one of my newsletter readers who wrote in asking about the business plan. So she wrote saying, “I have a business plan prepared and I’d like some tips from you to help me prepare.”
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So thanks for the question Freddyca. Exciting times, planning a new business is really good. I’m happy for you. In terms of the business plan I’d think about; are you planning the business plan for yourself or are you creating it for an investor or banker to give you money?
From an investor point of view, when I was in the venture capital field what we looked at when a new business plan came in, and we rejected 99% of the business plans that came in, but what we look for first was the Executive Summary. So, you know, quickly in two pages explain why this is a good opportunity. If you can’t sell them on those two pages then they’re not going to read the rest of the business plan. So that’s got to be really solid to start. We always start there.
Then we look at the team and look at who is this behind the company. So have they had experience, have they done it before, do they think they have a good chance of being successful? You know, if it’s just you you might want to consider getting some advisers on the company as well to add a little more credibility, who’ve maybe gone through it, have a little more experience than you.
And then we go look at the financials and see, is this an opportunity to make money, do we think they’re going to be able to give us a return on the investment that we’re putting in. So that’s how we would start: Executive Summary, Management, then financials, and then we look at the rest of the business plan. And most of the time the entrepreneurs would fail on one of those three and they would end up, you know, getting deleted or rejected.
So that’s what’s happening if you’re going to go for investors or bankers. If it’s for your own self, if it’s going to be to help you guide and plan your business I would start with, what is it that really excites you about your business, what’s the vision that you have for your company, you know, what gets your blood pumping when you wake up in the morning to pursue this business opportunity?
So create that vision statement, you know, what you’re here to do and major goal for the company, so long as it’s going to get you excited every day. And then from there start working out how you’re going to make that happen. So you know, what kind of marketing do you need to do, who are the people that you need bring on, what kind of, you know, finances do you need to have in place to make it work, and how are you going to phase that out over a period of years, if you’re doing a 3 year plan or 5 year plan.
Just make sure it makes common sense. You have to come back to your business plan on a regular basis to update it, to, you know, reflect the market changes that you’re seeing. The business plan never goes according to plan but it’s still a good process to go through and to keep monitoring and updating.
So I hope that helps. Two different bits of advice depending on if you’re going to use it yourself or if you’re going to use it to go out and get funding, but if you have extra questions feel free to leave it below.
For those watching, if you like the video please give it a thumbs-up. It makes me want to create more of these videos for you guys and if you have a question about business plan or if you have some advice for Freddyca as well, feel free to leave it in the comments underneath. I always love seeing those too. And we’ll see you on the next episode!
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