| Advance planning is what will guide you through the creation of a professional quality business plan. Your plan allows you to put all the information on your business together in a concise format, suitable for presentation to banks and investors.
Business plans are important documents for business partners who need to agree upon and document their plans. The plan will assist you in thinking through the processes and documents needed to make a partnership go smoothly.
Partners will need to agree to all aspects of the plan, and of course potential investors such as banks or private individuals who may decide to fund the business or its expansion. Business plans are a bit like to-do lists. Business plans are useless in the everyday survival grind we face but with out them we do not have a direction where we want to go.
For management or entrepreneurs seeking external support, the plan is the most important sales document that they are ever likely to produce as it could be the key to raising money and attracting advisors. Pre- planning and taking your time to think through the business ensures a well-documented, bulletproof business plan able to undergo the closest scrutiny. You can create a comprehensive document with all of the kinks worked out before you present it to a prospective investor.
A business plan should be envisioned as a selling document as there are many people along the path to commercializing your product who will need to be sold on the concept. As a selling document, the business plan will be used to sell investors on your business, including banks, venture capitalists and angel investors. Drop a thick document on a VC, and it will, wrapped in good intentions, go straight to the trash.
The executive summary is what most readers will read first. The Executive Summary is the last section of the plan to be written because it summarizes all of the findings and plans at the highest level. This section is important because it shows your future lenders what your company is doing and what you plan on doing in the near future.
An investor should be able to make an informed decision about your business just by reading your executive summary. An executive summary-written last, only 1-3 pages long must be a compelling document. It should include a compelling A 30 word sell-the value proposition (worth & importance of the idea to the world), then state the problem-the opportunity-and your solution Mission & Values. Make these the banner ideas you will hang your hat on.
It is crucial to have a executive summary that sells. The management team is more important than the executive summary to the business, but the discussion of the management team is not the most important part of the business plan because if the executive summary sucks, people won't get to the management team section.
The content of a presentation to investors is usually limited to the executive summary and a few key graphs showing financial trends and key decision making benchmarks. VCs absolutely pay attention to the executive summary. Writing a full business plan helps you conceptualize all of the nuances of your business and this understanding is crucial in helping you succinctly articulate your startup's unfair advantage.
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