Home
>
Strategic Planning
>
Could You Be Setting Your Business Plan Up For Failure?

Could You Be Setting Your Business Plan Up For Failure?

David E. Gumpert, author of Burn Your Business Plan, often tells the story about how he and his partner failed to raise money after sending their business plan around to venture capitalists and meeting with several others to make presentations. Disappointed by the fruits of their labor, they considered giving up on their venture in 1995. Fortunately, on the advice of their board of advisors, they chose to divert their time from massaging the business plan to making sales. The financing, they were told, would come later.

Turns out, they sold enough to stay afloat through 1996. In 1997, sales failed to grow as quickly as they expected, so they decided to seek financing again. This time, they expected positive results would be easier to obtain, after all they were fairly well established now. The board, however, told them to get out there and promote their business and make more sales.

If At First You Don't Succeed?

Gumpert and his partner instead decided to dust off their old business plan, spend many hours rewriting and updating the plan, and to set out once again to seek financing. And, once again they were turned down. How could this be? In the late 90's, it seemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 -- had grown to $16.4 billion by 1997.

Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients' success. This publicity got the agency's phones ringing with new prospects, several of which converted into additional sales.

As the business grew, they remained on guard about monitoring their expenses and aggressively collecting receivables. By 1999, they were operating profitably at $2 million in annual revenues, with nearly 20 employees. Also, the amount of venture capital being invested nationally had soared to an astounding $55.5 billion. But, Gumpert and his partner paid little attention to this; their interest in outside financing had dropped significantly. (By 2000, Venture capital availability peaked at $85.5 billion.)

The Power Of Publicity

As Gumpert and his partner carried their success into 1998 and 1999, their promotional efforts eventually attracted the attention of a publicly held company that was seeking the expertise they offered in developing and managing online content. In December 1999 this company acquired Gumpert's company, NetMarquee. To Gumpert's surprise, the acquirer never asked to see their business plan; it only wanted to see their financial projections under several different scenarios.

In recounting his financing experience, Gumpert makes two points: First, even during good times, the venture capital route is closed to the vast majority of businesses that seek it out. While it might have seemed back then that nearly every business that asked was receiving venture capital, the reality is most carefully crafted business plans are rejected out of hand by venture capitalists. Second, you'll be surprised what you can accomplish without the financing you think you so desperately need to stave off failure.

The truth is that it's unlikely a business plan by itself will bring funding in the door, unless it is part of an overall marketing strategy.

Four Tools To Help Market Your Business Plan To Investors

The famous motivational speaker Jim Rohn says there are three steps to successful communications: "Have something good to say, say it well, and say it often." These three steps form the foundation of the Business Plan Secrets Revealed manual. They are essential to marketing your business plan with the intent of attracting investors and selling your business plan to them. Here are four tools to help you "say it often" so you can attract investors and sell your business plan to them.

One, a concise, well written twenty-five page business memorandum or "business plan" that builds a case to separate your venture from your competition. You don't need a two-inch thick business plan. Plans this long often lack aim; instead of building a case that leads investors to decide whether the business is the right investment for them, they "fire away" in hopes that some of the shots will take effect.

Two, an effective elevator pitch?-a 60-second, to-the-point verbal pitch for your business-that communicates to your customers and investors what you do in an exciting and engaging way. The ability to separate your business from your competitors and get an investor's interest in the short time it takes to ride up an elevator is critical.

Three, an investor relation Web page to build credibility and help investors quickly get the information they need, when they need it. Of all the communications media available, the Web is particularly important. It's fast and available 24/7. With it, you can capture leads and automatically keep in touch with those who are interested in your business.

Finally, press releases to help you get your word out. A press release is the basic tool for gaining the attention of the media. The public's desire for interesting, relevant news remains strong, as does the importance of carefully selecting relevant target audiences. You are dealing with much more skepticism on the part of the public now than there has been in the past, which makes the evidence and objectivity in your press release paramount.

The process of raising money and attracting investors isn't easy. If it were, every business idea would get funded. You have to use all the tools that are available to you, and start looking at this process as a marketing process backed by hard, verifiable evidence. You just don't know when the plums-investors, on the tree will become ripe-ready to invest. But, you do know that if you do everything you can to take care of the tree-water it, fertilize it, and so on?-it will ultimately bear fruit-raise money for your business.

Mike Elia is a chief financial officer and an advisor to venture capitalists and leverage buyout specialists. For more information about business plans and raising capital for your business or to review his business plan manual, visit business plan secrets revealed.

tidy up service Northbrook ..

In The News:

ETA sharing on Apple Maps and Google Maps keeps contacts updated automatically while you drive safely. Learn step-by-step instructions for iPhone and Android.

Data removal from brokers protects against AI-powered scams and deepfake threats in 2026. Learn how data brokers sell your personal information to scammers.

Learn how to act against cybercriminals in 2026 with essential security steps like two-factor authentication, software updates and credit freezing.

Choose between OpenAI releasing Sora text-to-video model, the AI race heating up, or Waymo driverless cars launching in cities across the country

Learn how to set up Google Maps and Apple Maps on your phone to automatically remember where you parked. Step-by-step instructions for enabling location services and parking detection.

Phishing scammers use rnicrosoft.com domain to impersonate Microsoft by replacing "m" with "rn" in typosquatting attacks that steal login credentials.

OpenAI announces new teen safety rules for ChatGPT users under 18, blocking romantic roleplay and requiring extra caution on body image topics.

A 2025 data breach at fintech company 700Credit exposes personal information of more than 5.8 million people through compromised third-party integration partner.

Retailers lose $76.5 billion annually to return fraud as nearly 10% of U.S. retail returns involve fraudulent activity, with $850 billion in returns expected in 2025.

ShinyHunters claims responsibility for stealing 94GB of Pornhub user data affecting over 200 million records and demands Bitcoin ransom.

ChatGPT 2025 now connects to Apple Music, Canva, Expedia, TripAdvisor and OpenTable through built-in apps that help users create playlists, design graphics and more.

Apple releases emergency patches for two zero-day vulnerabilities actively exploited in attacks. iPhone and iPad users urged to update immediately.

DoorDash launches Zesty, an AI-powered social app that recommends restaurants through conversational search, now testing in San Francisco and New York.

Cybersecurity firm Infoblox reveals that over 90 percent of parked domains now redirect visitors to scams and malware, making simple typos extremely dangerous.

The Fox News AI Newsletter covers the latest artificial intelligence technology advancements, including the challenges and opportunities AI presents now and for the future.

GPT-5.2 is now live for all ChatGPT users with improved coding, writing and image interpretation, with Kurt Knutsson offering his review.

New iPhone replacement scam uses pressure tactics and fake carrier calls to steal devices from buyers. Criminals claim shipping errors and demand urgent returns.

Amazon Ring's new facial recognition feature sparks privacy controversy as Electronic Frontier Foundation critics argue the AI upgrade expands surveillance risks.

New Android banking trojan Sturnus steals credentials, reads encrypted messages and controls devices.

Denmark's 3D-printed student village proves automation builds 36 apartments faster than traditional methods. Skovsporet project shows housing future.

Discover Android's new Sound Notifications feature that alerts you to smoke alarms, doorbells, and baby cries even when wearing headphones.

New SantaStealer malware reportedly threatens holiday shoppers with password theft. This Christmas-themed info-stealer targets browsers and crypto wallets.

The Christmas season brings a surge in Netflix phishing scams targeting shoppers with fake emails. Stacey P received convincing scam but verified account first.

San Francisco Giants invite Jamie Grohsong to throw ceremonial first pitch at Oracle Park after he learned to play baseball with a bionic hand following an injury.

FBI warns cybercriminals are stealing family photos from social media to create fake proof of life images in virtual kidnapping scams targeting victims.

Could You Be Setting Your Business Plan Up For Failure?

Strategic Planning