Whether you are seeking capital for your company or are optimizing your business strategy, the most important element - particularly for outside investors - may be your written business plan. You can tune-up and supercharge your plan using this 19-step checklist. When your written plan firmly answers yes to each of these 19 questions, your market/product strategy is in terrific shape plus you increase the odds of attracting investment capital.
If you don't already have a written business plan - write one! Your business plan is a blueprint for your whole company. It describes in detail your goals, the financial and technical viability of your goals, and the strategy you will use (or are using) to reach those goals. And your business plan is a working tool - it is a yardstick to measure your progress and a compass to keep you on course.
Must a business plan be written?
Yes! A plan which is not written usually has not been thought through fully. And despite what you may have read, it is doubtful that any business ever attracted capital on the back of a napkin.
Use this checklist as a way to identify where your strategy, as spelled out in your business plan, needs work. Each of the questions below highlights an area considered critical to technology investors.
1. Can the key ideas behind your product or service be stated in one or two sentences? (y/n)
2. Does your company have at least one unique and compelling competitive advantage, which cannot quickly or easily be duplicated? (y/n) Examples are a special feature, a cost advantage, a technical refinement, a new delivery system or a special supplier.
3. Is your competitive advantage proprietary? (y/n) That is, can it be copyrighted, patented, trademarked or otherwise protected? Can you keep it exclusive to you?
4. Is your industry segment growing by 25% or more? (y/n) If not, can your new product dominate its segment? If the answer is no, you probably won't be able to generate the kind of financial returns investors look for.
5. Does your product or service create a new market? (y/n) Although generally positive, this could be a trap - in a brand new market, the potential can be slow to develop. Lotus Notes created a new category but took years to create value for investors.
6. Is your market in "early momentum" - the market growth phase where market revenues have recently taken off? (y/n) Venture investors prefer markets in this stage because the time-to-create-value is shorter and the growth potential still large.
7. Is your target market segment 1) tightly defined over a population sharing common characteristics, 2) large enough to support significant profits, 3) served by communications channels to reach that market - i.e., trade or special interest publications, response mailing lists? (y/n)
8. Is your company filling a gap in the market, or do you have a "gee-whiz" product which you think is so terrific that customers will surely want to buy it? (y/n)
9. The benefit of your product or service to users is 1) significant, 2) quantifiable and 3) cost-justified? (y/n). If you provide a benefit which is important, and you can prove it - there is a much higher probability of generating sales.
10. Is there a demonstrated market for your product? (y/n) If you have an existing product, is your customer base expanding? Investors would rather fund sales and production than product development.
11. Is there wide appeal for your product or service? (y/n) Are there enough potential customers in the target market that you can earn significant profits, for a long time? Are there follow-on products to sustain revenue and profit growth?
12. Does your company have the ability to sell your product? (y/n) Particularly in companies where the founders have technical backgrounds, a question to ask is "Who is going to sell your product or service?" What about outside distributors?
13. Is there an experienced management team? (y/n) Investors would rather fund a solid team instead of one lone genius with a great idea. The team should be highly qualified in marketing, sales, finance, and the product/service area itself. Of course, a demonstrable track record helps.
14. Can you demonstrate a likely return of 5-15 times investors' capital, over a period ranging from three to seven years? (y/n) The actual parameters used by venture investors will vary based on which stage you are in (idea, startup, development, expansion, turnaround).
15. Is there a clear exit strategy for investors? (y/n) The most common strategies for returning investors' capital are 1) going public; 2) acquisition of your company; 3) new investors; 4) founder's buyback or management buyout.
16. Have other investors already put money into the company, particularly the senior management team? (y/n) This reduces the apparent risk, reduces overall exposure, and shows that management "has its money where its mouth is."
17. Have you clearly defined a structure for the investment you seeking? (y/n) The structure should include: who is involved, how much capital is needed, what minimum investment you will accept, how much equity that will buy - and, of course, the projected return on investment.
18. Are your financial projections realistic? (y/n) Have you soundly justified your projected growth rates and other financial assumptions?
19. Have you clearly examined the risks? (y/n) Investors like to know that you have considered the risks. This is key - can you turn your risks into opportunities?
Too many no's? Remember, each "no" opens up an area for you to strengthen your business. Even if you aren't seeking capital, each question highlights a critical success factor - which, when mastered, will increase your profits, your performance, and your future success.
In order to help you discover hidden value and opportunities in your existing business, and to make it easier to spot potential problems while you are just starting out, I've created the discover hidden value business building guide. A remarkable aid to accelerating the growth and profitability of your business, this program of insight-provoking questions and checklists enables you to rapidly diagnose, troubleshoot and optimize every part of your business, from marketing to sales, customer service to product development and finance to production.
? Paul Lemberg. All rights reserved
Paul Lemberg's clients call him "the unreasonable business coach" because he insists they pursue goals and take actions far outside their comfort zone to make more money than they previously thought possible. To get discover hidden value business building guide tips, tools and strategies like these, visit discover hidden value business building guide
Barrington South Lincoln Stretch rentals .. Lockport Chicago limo O’HareWhy do so many companies languish and watch as their... Read More
I am surprised how few sales professionals, independent consultants, and... Read More
A focus group is a group of employees or current... Read More
If you own the mid-size business and actively work in... Read More
If you own a mobile franchise business and wish to... Read More
"Rubbish!" shouted the large, aggressive man in the red-striped shirt... Read More
Have you ever done a SWOT analysis? No, it's not... Read More
There's nothing automatic about corporate growth, particularly in the information... Read More
We all agree Strategic Planning is a critical part of... Read More
If ever there were an industry where we want zero... Read More
One of the difficulties we face in our industrialized age... Read More
Possibly THE most frequently asked question of me is "What... Read More
Writing a business plan for a franchised outlet of a... Read More
Note to Rite Aid and CVS: It's not about the... Read More
A survey released by the American Institute of Certified Public... Read More
If you are in the parking business and own or... Read More
"I don't need a business plan."Neither did Alice in Wonderland."Would... Read More
Writing a business plan is not an easy endeavor, nor... Read More
I read once that something like 30 percent of all... Read More
As a business owner, you've likely created a hurricane plan... Read More
So what makes a vision successful? Everyday companies try to... Read More
If you own a mobile car wash business or auto... Read More
I recently took an organizational behavior class where my professor... Read More
ACTION PLANNING: Action Planning is a process to develop strategies... Read More
If you are looking for a partner, funding, angle investor... Read More
Downers Grove limo Chicago ..We all know that nothing runs without a plan, and... Read More
One of the most important initiatives in the domain of... Read More
Possibly THE most frequently asked question of me is "What... Read More
The first task before hiring a contractor for home remodeling... Read More
In 1989, Sony founded its Institute of Wisdom at the... Read More
Experts estimate that 90 percent of Australian businesses are overspending... Read More
Part 1A few weeks ago I attended a seminar sponsored... Read More
One of the key challenges for any business is to... Read More
Microsoft Great Plains fits multiple services market niche and healthcare... Read More
Creativity is one of the greatest tools for success in... Read More
If ever there were an industry where we want zero... Read More
Can you imagine going on a road trip without knowing... Read More
Storytelling and writing a business plan actually go hand in... Read More
One Research Scientist at the Hewlett-Packard (HP) Imaging Systems laboratory... Read More
"Rubbish!" shouted the large, aggressive man in the red-striped shirt... Read More
With the help of balanced scorecard strategy map, it is... Read More
Do you work in or own a business that's affected... Read More
Please take a moment before you read any further and... Read More
Here's a really simple way to make sure your plans... Read More
One of the quintessential parts to any business is your... Read More
There is so much small business information available today that... Read More
When developing the competition section of your business plan, companies... Read More
GETTING STARTED WITH SUCCESSION PLANNING: PART IA survey of 4,300... Read More
Strategic alliances are increasing at a rapid rate. It is... Read More
Want to become more strategic? Add these traits to your... Read More
Strategic Planning |