November 21, 2008, Newsletter Issue #186: Business Plan Don’ts

Tip of the Week

You’ve spent time creating what is, in your mind, the perfect business plan. But investors aren’t impressed. Where did you go wrong? Here are some helpful tips to avoid having to throw out your business plan.

Don’t get bogged down in details. You are excited about your plan and lay out every single detail of how your new product works and how it will change the face of the company. Investors don’t care. They want the general idea, and how it will make money. Spare your audience the details of the superneuron splitting technology, and instead focus on how it will attract government contracts.

Don’t make “everyone” your target market. Investors have read plenty of plans, and they see red flags if your target audience is too broad. For instance, if you sell diamond studded pet leashes and say your customer base is anyone with a dog, is that true? It’s not, and it shows your inexperience to say so. Focus on a niche that you can corner, and that will assure your investors that you have a chance to make serious money on their investment.

Don’t be too narrow. Just as big a problem as being to broad is being too narrow. If your niche market is too niche-y, you can’t possibly make enough sales to get a return on investment. If you want to sell your diamond leashes to upper class women with poodles in LA, your prices better be pretty hefty for you to make a profit year after year. After your clients buy one leash, are they really going to come back and buy another? How many leashes does one wealthy dog need?? Pay close attention to the details of your plan to increase the likelihood of pleasing an investor.

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