Presenting Your Plan
Now that you’ve invested dozens of hours doing research, compiling data, organizing your information and writing it down, it’s time to discuss how you should present your plan. But first, you may want to take some time to clear your mind.
Reilly says, “The biggest mistake is the management team not putting the newly crafted plan on a shelf for a couple of days and then coming back and reviewing it with fresh eyes. All of the various elements may look good by themselves, but may still not fit together well.” A bad business plan is “one that has not been thoroughly vetted to remove inconsistencies … [It is] much better to spot those problems at the front end and solve them then,” he says. Reilly suggests a business plan consultant if you need a fresh pair of eyes to locate the logistical errors in your plan.
The Written Presentation
The importance of your plan’s appearance can’t be understated: it’s your business’s first impression. If your plan looks sloppy, it will be assumed that the information it contains is inaccurate and not well-thought-out and that your business is run carelessly.
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 (charts, graphs and tables presenting data pertinent to your business) and professional – this is not the time for decorative clip art of cows, even if your business does sell milk. Consider hiring a professional graphic designer to give your plan a polished look.
Another professional you should consider hiring is an editor, who will see mistakes that you don’t, point out sentences that are unclear and sections that are disorganized. They will make sure that the tone of your business plan is appropriate – formal, but easy to understand. They will also make sure there are no spelling or grammar errors. You don’t want to look careless or uneducated. 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.
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 make it easy for 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.
There is nothing that 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 mentioned, 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. (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 financiers 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 pertinent to your business 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 two to three years of tax returns for each owner if your business is new, or for your business if you are already established. Because of the sensitive data they contain, you may want to find out if tax returns are required before you include them.
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 Presentation
If you have excelled in putting together your written business plan, you will have a chance to make your case on the phone and/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 financier 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 to practice your public speaking and presentation skills ahead of time and get constructive feedback on how you can improve. Even if you don’t want to present your plan 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 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 simply believe in you or don’t want to hurt your feelings. Even if you have less-sympathetic, brutally honest friends and relatives, they may not understand your idea from a business or investment perspective, and thus will not be able to give the kind of feedback you really need.
If you’re not a numbers whiz, you don’t have to become one, but, as the owner, you should thoroughly understand the financials included in your plan. Bring other members of your management team onto the call or into the meeting if they will strengthen your presentation or 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 do 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.
Remember to make your case from the potential lender or investor’s perspective. Are you offering them 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, and second, because one financier may give you a more favorable offer than another. If you are rejected, and there’s a very good chance you will be at first, it doesn’t necessarily mean that your business idea isn’t viable. It may mean that your business isn’t the right match for that particular investor, 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 financiers 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 not interested no matter what?
Don’t be too quick to blame the economy, but sometimes unfavorable economic conditions will prevent a funding request from getting approved that might look more appealing in a better economic climate. Also, sometimes a marginal loan request can be funded with a loan from the small business administration, but if the only loan you qualify for is a high-risk government-subsidized loan, you have to ask yourself if your business is really ready to take out a loan or if there are problems that need to be worked out first.
A business plan is not just a lengthy document that helps you obtain financing. It’s truly a thorough examination of whether your business idea is viable. Preparing your business plan in the early stages of developing your business can save you a great deal of time, money and heartache by showing you where the weaknesses in your idea lie and giving you a chance to correct them before you make any serious mistakes.
For example, in the process of putting together your business plan, you might discover that you haven’t really thought enough about your marketing budget or you haven’t done enough research on government regulations that will affect your business. In putting together your plan, you will be forced to examine your business from the viewpoint of the skeptical potential investor and the skeptical potential consumer, not just from the perspective of the enthusiastic entrepreneur.
Once you’ve completed your initial plan and, hopefully, obtained the investment or loan you were seeking, keep in mind that your business plan should be a living document. Don’t just store your business plan on a shelf and never look at it again, thinking that it has served its purpose. You will want to revisit your plan from time to time, dropping some components and adding others as you learn what works for your business and what doesn’t. As your business evolves, you’ll find that older versions of your plan provide a helpful reminder of how far you’ve come. As a bonus, continually updating your plan will put you ahead of the game if you later need to secure additional financing.
There’s no question that putting together a good business plan takes a tremendous amount of work. But if you do it right, your effort will pay off.