Creating a powerful business plan

The money’s still there with the right approach!

It’s a rare business which can reach its full potential without raising external funds; and the ability to attract investors or debt finance should be in every entrepreneur’s tool-box.

Coaxing financial support requires a well-researched business plan, so here are my tips for creating a winning approach to funders –

1: Grab their attention. Banks and private investors alike get loads of similar requests, so stand out with an opening summary of no more than 3 sentences outlining your proposition.

2: Flaunt your strengths. They need to know how and why you are likely to produce a return on their investment. They’ll only back your ideas if you can demonstrate your relevant experience and skills.

3: Make sense of your numbers. You’ll need to explain each element, not just turnover and profit levels. Your break-even point, burn rate, when you will run out of money and their exit strategy are also of vital interest to your investors.

4: Demonstrate your market. How big is the opportunity? Could you become a market leader? Are you offering something which your competitors aren’t? Is the market shrinking or growing?

5: Describe barriers to competition. Are you the first to market? Do you have patented or copyrighted products and processes? Have you captured the best people to work for you?

6: Forge strong alliances. Relationships with major suppliers and other partners add credibility which will comfort your investors. A well-established and loyal customer base also speaks volumes in validating your business model.

7: Set milestones. You may not need all the funds you have asked for in one tranche; and investors are unlikely to release money until you do. Make sure you set achievable goals to trigger stage payments, as breaking promises is sure to drive them away!

8: Show your commitment. Investors love to see owner-managers with personal financial stakes in the project. This demonstrates your belief in your plans better than words ever will.

9: Attend to the details. Amongst other things, your plan needs to be concise, accurate, easy to read, well laid out and attractive.

10: Be passionate. Many investments are made from the heart as much as the head, so using exciting words and images will show your flair and motivation.

Have a question you'd like Jon to address? You can submit it by either adding a comment to this post online or by e-mailing it to jon@jupiterdawn.com

Don't waste this crisis!

Positive thoughts and actions pay off in tough times.

One of my clients asked me today how it is that I’m always “up” and positive about things when so many businesses seem to be running out of steam, laying people off and reporting more pain yet to come.

I replied that there are some unique opportunities in amongst all the chaos. I am too busy working to identify them and using them to improve my life and the lives of others to ever feel down!

I could see he was unconvinced, and he challenged me to come up with 10 reasons why the crunch/recession/downturn isn’t all bad…

1: In a slowdown, it’s easier to see which of your goods and services are relatively unprofitable, and to focus on your core strengths or in developing your next core strength.

2: Many companies have reduced customer service and support staff. If you’re a competitor of theirs, they’ve made it relatively easier for you to impress in your own marketplace.

3: Advertising is cheaper and more accessible. I heard of a radio station offering 5 times the airtime per pound than 12 months ago, and some local free newspapers are desperate for your business at any price!

4: PR exposure is easier to achieve. Most of the media are eager to promote good news about the economy. Make a big noise if you’ve won a new order, opened a new site or similar.

5: Business supplies are really cheap. Now’s the time to replace the photocopier, stock up on stationery or give the office a makeover.

6: Vehicle leasing and purchase deals are incredibly sharp. That new van or company car has never made more sense.

7: Commercial property values are on the floor. Grab a bargain by purchasing or renting smart new premises you couldn’t have afforded a year ago.

8: It’s a great time to learn how to cut costs intelligently. When the economy upturns, you’ll be more profitable than before.

9: Government assistance is genuinely more available than ever. Check out the Solutions for Business portfolio via Business Link.

10: Recruitment is an employer’s market. Why not strengthen your sales or marketing departments, from a wide choice of potential staff at relatively low cost?

Have a question you'd like Jon, founder of JupiterDawn Consulting, to address? You can submit it by either adding a comment to this post online or by e-mailing it to jon@jupiterdawn.com

Sharp lessons from a wily creature

Are you a hedgehog or a fox? And which provides a better model for leadership and success?

According to business guru Jim Collins, and contrary to what you might imagine, it’s the prickly one we should be emulating!

The reason is all about focus; developing a single idea and doing it superbly well, rather than creating endless new strategies, divisions and projects in an attempt to stay ahead of the competition.

Embedding the “Hedgehog Concept” into your enterprise requires you to understand your answers to the following three fundamental questions -

1: What can you truly be the best in the world at? This won’t necessarily point you to your current endeavours, qualifications or experience. In fact, if you’re engaged in something which you’re not particularly good at, you need to look further to discover your true calling. Do you go to work feeling that you were born to do this, and that you have found your niche? If not, why not?

2: What drives your financial success? All the great achievers and organisations understand where their cashflow and profit comes from. Both are essential to business survival, so you shouldn’t waste time on anything which rewards you with only one or neither. Furthermore, eliminating those parts of your activity which are holding you back financially gives you more time to concentrate on the worthwhile stuff.

3: What are you passionate about? Here’s a test. Today, you win the lottery. Do you enjoy your work so much that you would carry on doing it tomorrow? If you would, you’ve already found your true calling. Furthermore, in your business, is there a universal culture where everyone feels motivated, excited and valued in everything they do?

“Hedgehog” thinking operates in the space where the answers to all three of those questions overlap.

In case you’re wondering about the analogy with forest wildlife, remember that whether the fox creeps towards him slowly, lunges at him from behind a log, or leaps from the bow of a tree in an attempt to surprise him, Spiny Norman only ever has to execute his one single, perfect move.

He curls into a ball and leaves his “cunning” attacker reeling in defeat, usually with a bloody nose!

Jon Cooper is the founder of JupiterDawn.com business consulting.
Email jon@jupiterdawn.com with feedback and business strategy queries.