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Answer Upon - Business Plan Tips - Advice from a VC Gatekeeper
I recently came across a story which goes to prove and confirm what I have said in previous articles. That is, in order to be successful in your workplace or indeed business you need to work on developing your soft skills, i.e. your interpersonal skills, which includes your communication and the ability to deal with people effectively and efficiently.Your communication with people has lasting impact and is far more important, as ultimately it can determine whether you get hired for that dream job, or perhaps get that long awaited client.You do not need to be No.1 to be recognised in your field once you have improved communication skills and a understanding of systems or networks. Having these skills will catapult you over and above your competition and put you in the driving seat.If I was to ask you who invented the light bulb, most would rightly say Thomas Edison. But, what if I told you he was not the 1st! That's right, Thomas Edison was not the first person to come up with a working model of the electric light, he infact was the 23rd person! So how did he manage to be accredited with inventing the electric light system and become world famous.Thomas Edison was born in 1847, between the ages of 12 and 15 he worked on the railroads selling candie
How do you please a group of teenagers at a Skateboard Park? Perhaps you need to consider a little extra customer service. Now then obviously kids on skateboards have a chip on their shoulder and attempting to threaten them that you are going to throw them out of the park will not work, after all they have probably been thrown out of every shopping center in town, more than once.As a kid, on a skateboard once got chased by a Hughes 500 Helicopter when I tried to escape selective prosecution, after ditching a security guard and a black and white, which came to his aid? Imagine if I would have been caught; $500 per hour Jet A fuel bill my parents would have received? I would have had privileges terminated for months and been grounded.Needless to say customer service at a skateboard park starts with true customer service and not threats. When dealing with skateboarders at skateboard parks you must understand that they wish to be treated like adults. It is therefore necessary to talk to them as such and explain to them your predicament and need for safety and their responsibility to follow the rules.Meanwhile, customer service is understanding their needs and taking their questions and comments seriously. I can tell you after working with the local parks a
Before I delve into specific recommendations, let's briefly review the purposes of a preparing a business plan.
In practice, a business plan has three purposes and three purposes only: (1) to demonstrate the validity of your business model (including the existence of a market); (2) to establish the qualification of your team to execute your business model; and (3) to convince investors/lenders that the only thing you're missing is capital. That's it. Anything else you try to make it will detract from these goals.
If you want your business plan to make it to the Loan or Investment Committee, consider following these 8 recommendations:
1. Present the Right Type of Plan to the Correct Audience
Generally speaking, there are three types of business plans: Loan-Targeted; Equity-Targeted and Operating-Only. Do not send an equity investor a loan request and do not send a lender a request for an equity investment. Operating-only plans do not seek to raise capital and thus are not discussed in this article.
Loan-targeted and Equity-targeted business plans are quite different. Lenders are principally concerned with collateral and cash flow. They tend to give a lot of weight to the debt coverage ratio. Equity investors focus on the Return on Equity generated from anticipated liquidity events like a lucrative acquisition or initial public offering. There are other differences. For example, if you're trying to raise equity, then your business plan will likely be known as a Private Placement Memorandum. This terminology comes from Regulation D of the Securities Act of 1933, a federal law which applies to your business plan if you're attempting to raise private equity across state lines. This docum
You have probably been through it yourself. You toss, turn, and cannot get to sleep the night before. Your stomach feels as if it is doing somersaults. You feel anxious, worried, and apprehensive. You just know that tomorrow you will face a mean-spirited, hostile interrogation.Congratulations - you have a classic case of "interview nerves".While most people experience interview nerves at some point in their career, they are not a requirement for interviewing. In fact, you can calm those anxious nerves using a few simple techniques.Practice and preparePractice your interviewing skills ahead of time and prepare some good answers to likely questions you will face. Many community centers, community colleges, and employment agencies offer interviewing classes so sign up for one.You can also role-play interviews with another person. Choose someone who can help you create a realistic interview situation. Another good option is to contact an outplacement service provider in your area and pay for an hour or two of interview coaching. This does cost a bit of money, but it is well worth it for the intensive, personalized coaching you receive.Positive Self-TalkWhat is self-talk? We all talk to ourselves, all the time - just usual
Before I delve into specific recommendations, let's briefly review the purposes of a preparing a business plan.
In practice, a business plan has three purposes and three purposes only: (1) to demonstrate the validity of your business model (including the existence of a market); (2) to establish the qualification of your team to execute your business model; and (3) to convince investors/lenders that the only thing you're missing is capital. That's it. Anything else you try to make it will detract from these goals.
If you want your business plan to make it to the Loan or Investment Committee, consider following these 8 recommendations:
1. Present the Right Type of Plan to the Correct Audience
Generally speaking, there are three types of business plans: Loan-Targeted; Equity-Targeted and Operating-Only. Do not send an equity investor a loan request and do not send a lender a request for an equity investment. Operating-only plans do not seek to raise capital and thus are not discussed in this article.
Loan-targeted and Equity-targeted business plans are quite different. Lenders are principally concerned with collateral and cash flow. They tend to give a lot of weight to the debt coverage ratio. Equity investors focus on the Return on Equity generated from anticipated liquidity events like a lucrative acquisition or initial public offering. There are other differences. For example, if you're trying to raise equity, then your business plan will likely be known as a Private Placement Memorandum. This terminology comes from Regulation D of the Securities Act of 1933, a federal law which applies to your business plan if you're attempting to raise private equity across state lines. This docu
What Is a Tag Line?A tag line (also known as a “strapline”) is a punchy slogan that follows a logo or company name. For example, Jaguar’s tag line is “Don’t dream it. Drive it.” Or IBM’s “I think, therefore IBM.”The tag line evokes an image of the product or service whenever a person reads or hears it. It helps to establish a brand in a person’s mind.10 Tips for Writing Tag LinesKeep your tagline1. Simple – 5 short, one-syllable words are easier to remember than 25. Nike’s “Just do it” is more powerful than Iberia Airlines’ “The best connections in the world mean nothing if an airline forgets the human one.”2. Positive – negative statements don’t sell.3. Original – like “Beanz meanz Heinz.”Not like Dixons’ “The future ... for less” or Hyundai’s “A car first. A badge second,” which could apply to a hundred different companies!4. Benefit-laden – try to include a main benefit in your tagline, something that will appeal to a reader’s “What’s in it for me?” mindset: e.g. Backlife’s “Your personal back pain therapist.” The reader/hearer shouldn’t say, “So what?”5. Memorable – if it sticks in the mind, a potential customer will think of
If you want your business plan to make it to the Loan or Investment Committee, consider following these 8 recommendations:
1. Present the Right Type of Plan to the Correct Audience
Generally speaking, there are three types of business plans: Loan-Targeted; Equity-Targeted and Operating-Only. Do not send an equity investor a loan request and do not send a lender a request for an equity investment. Operating-only plans do not seek to raise capital and thus are not discussed in this article.
Loan-targeted and Equity-targeted business plans are quite different. Lenders are principally concerned with collateral and cash flow. They tend to give a lot of weight to the debt coverage ratio. Equity investors focus on the Return on Equity generated from anticipated liquidity events like a lucrative acquisition or initial public offering. There are other differences. For example, if you're trying to raise equity, then your business plan will likely be known as a Private Placement Memorandum. This terminology comes from Regulation D of the Securities Act of 1933, a federal law which applies to your business plan if you're attempting to raise private equity across state lines. This docu
Careers dictate resume formatDifferent careers use different forms of resumes. When you’re working on your resume, beware of services that try to sell you on just one template, regardless of your target career. That’s because formats of resumes really depend on the industry or position that you have. Lawyers have different resumes from professors who have different resumes from actors.Writing resumes depends on what type of job you wantWhen you are trying to advance in your career, it is very important that you tailor your resumes to be consistent with industry wide standards. That’s because recruiters in your field see lots of resumes. If they have to spend too much time looking at yours to understand what you’re trying to say, you can bank on getting yours tossed in the trash.When you’re trying to change your career, it’s even more important that you resumes match your target industry with the right format and content. You can find sample resumes that will help you get your own into shape. Certain parts of resumes only matter with specific fields or jobs. Don’t broadcast your recent foray into a new career by not paying attention to how resumes are written for that career.Confused about what resumes should look l
Loan-targeted and Equity-targeted business plans are quite different. Lenders are principally concerned with collateral and cash flow. They tend to give a lot of weight to the debt coverage ratio. Equity investors focus on the Return on Equity generated from anticipated liquidity events like a lucrative acquisition or initial public offering. There are other differences. For example, if you're trying to raise equity, then your business plan will likely be known as a Private Placement Memorandum. This terminology comes from Regulation D of the Securities Act of 1933, a federal law which applies to your business plan if you're attempting to raise private equity across state lines. This docu
According to the Security and Exchange Commission a Small Business is... For SEC purposes, small businesses are defined as domestic companies with revenues of under $25 million, and not investment companies. Subsidiaries of larger companies do not qualify as small businesseswhile The Small Business Association says... There are many definitions of a small business. In general, any business with revenue under $500,000 per year will qualify, but many larger agricultural and commercial businesses may also apply.And many Business Schools and Authorities to Find a Small Business... as a business with a small number of employees. The legal definition of "small" often varies by country and industry, but is generally under 100 employees. These businesses are normally privately owned corporations, partnerships, or sole proprietorshipsFor those of us who own and operate a small business or dream of having their own business in the future, small business is much more than those definitions.The small business is:1. A place where dreams can come true2. Somewhere that allows us to control our own destiny3. Encourages its owner to be creative4. A first challenges that people with a career in a cubicle, could never imagine
2. Abide by the 50/50 Rule
Your business plan should be no longer than 50 pages and no more than 50% of its content should be quantitative in nature.
There are two compelling reasons to keep your page-count under 50 pages:
First, whether your business plan is 20 pages or 200 pages, in most cases an analyst will reduce it to a 10-page summary called an Internal Credit Memorandum. The ICM is the only thing the decision-makers will ever see. Save the trees and save your time.
Second, people with money to invest or lend are among the busiest people on earth. None of them have time during the business day to sit and read more than 50 pages. The ideal length of a business plan is 20-30 pages, which is more than long enough to concisely state everything you need to. In my experience, every business plan longer than 50 pages contains unnecessary filler. Filler is bad. No matter what you read in that business plan book, your business plan does NOT need to include patent applications, folded-up blue prints, job descriptions, research studies, brochures, or pictures of your children. If and when I need any of these items, I will request them from you during the due diligence phase.
The reason you should limit your quantitative content to no more than half is because your business plan should tell a persuasive story that your numbers support. The numbers themselves are not the story.
3. Your Narrative Must Match Your Numbers
In many cases, the person who writes the narrative portion of a business plan is not the same person who prepares the financial portion. This often leads to inconsistencies, usually because your plan was not proofread
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