Local Business

Local Business  » 19 Questions to Supercharge Your Business Plan

19 Questions to Supercharge Your Business Plan

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).

Today's Popular Articles

• Clean Up In An Office Cleaning Business

• 7 Tips for Business Success

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.

About the author:

Paul Lemberg's clients call him the "unreasonable business

coach" because he insists they pursue goals and take actions far

outside their comfort zone, creating results including sky-high

profits, stellar revenue growth, and greater life satisfaction.

Paul is the President of Quantum Growth Coaching, the world's

only fully systemized business coaching program designed to help

entrepreneurs rapidly create More Profits and More Life.

Guaranteed.