MacDonald Ventures.

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Next to a great management team, a well-written business plan is your most important tool when raising capital. If you want the capital, have a great plan. Assuming yours is a great business idea, here are a few tips on preparing an effective document. Your mother probably told you the importance of first impressions. She was right. With business plans, as in personal relationships, those first few glances create impressions that determine if it will even be read. If poorly prepared, it will never make the first cut. There is never a second chance to make a good first impression. Competition is tough. Many are reviewed, few are chosen. Regardless of the excellence of both your business idea and plan, your written presentation must show the management team and the business as the most worthy investment of all. Ideally, a well-written, informative and enticing document, it encourages funding sources to take a closer look. Just as a resume is used to gain an interview, a business plan must open the door to further discussion. Shorter is better. Communicate your resourcefulness and efficiency through content. Demonstrate an understanding of human nature and business problems by your selection of management, the differentiation of your market with a strong positioning statement, financial knowledge with detailed and understandable pro formas, and basic understanding of the business by your choice and treatment of important topics. Communicate the potential inherent in the opportunity with excitement . What's so profitable about this project? Is there a real need? Why are you the expert? Who's helping the business stay on track? What assumptions have been made about the market? What niche is being pursued? What are the competitor's weaknesses? Why will this business succeed where others have failed? What are the risks and how have they been dealt with? What ideas do you have for additional products or services? What are your weaknesses? What help will you need? Because of the sheer number of requests for funding, most business plans are rarely read, though they tend to get perused. So, write the plan so the headlines subtly market the concept as the reader flips the pages. The executive summary at the front should be so well edited that its few pages communicate all information necessary for investors to determine their level of interest. The plan you create is valuable, proprietary and represents thousands of dollars in work. Treat it accordingly. Don't devalue it by indiscriminate distribution. People reviewing it will give it only as much respect as you give do. Think of finding an investor as being similar to a seduction. Give a glimps, then a few pages of summary, and only if they are serious, the whole document. If certain elements are trade secrets, break the plan into sections and submit only the information necessary to stimulate the investor's interest. Consider having a confidentiality agreement signed before submitting the entire write-up, especially if you are approaching private investors, rather than venture capital companies. Investors have their own unique criteria for investments.

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