What are the most important parts of a business plan?
There are the two basic, there are two elements that are really key that are so simplistic that most people overlook it - one is the executive summary and the other is the table of contents 'huh", well, I wanna hit those first because the executive summary is very short, it's usually less than a page, maybe only a paragraph or two and its an overview of everything. And when you're looking, it's so important cause when you're looking for money and I don't care who its from the very first thing they look at, they read is the executive summary for example venture capitalists, they may get a thousand plans a month and fund one or two. Now if you got a thousand plans a month I mean or nothing how much time do you spend and the answer is for most of the plans not very much so look at the executive summary if it hits them they put it in one file, for most of them, you know they spend maybe they spend a minute or two, that's it. So the executive summary is critical. The table of contents is critical because no matter who is interested, everybody has a certain feel for certain different areas like mine is marketing and leadership management so the first or product maybe the instant product so I'll look at those areas, I mean I'll look at those very closely, but someone else maybe the finances, someone else maybe something else. If I can't find that in your plan and I'm the potential person to loan you money I don't have the time to mess around with it so its critical that you have a table of contents that identifies all these and so when I wanna find these, I'll turn to that part, I'll find it right away, so those are two critical items. Ok then you go into an introduction which involves the description of the business you're getting into and why it's such a good deal, what the competitive advantage, I'd like to call it competitive differential advantage what you have the other guy doesn't have because frankly again if you don't have an advantage over someone else has why should they do business with you then, there's no reason to, why should they deal with you. So you wanna have the competitive advantage very clearly spelled out you wanna have the threats and the opportunities you know and the problems, and you wanna spell these out and also show how you solve these. Now some people got a mistaken idea that well there's a problem but I won't mention it then it'll make the plan more attractive, not a good idea. I mean these guys are not dumb, these aren't dummies you know, so if there's a problem and you don't identify them, then you're gonna think either this guy is stupid or is dishonest, one of the two, so never do that. So you wanna identify but what are you gonna do about it, in other words how are you gonna, if there is a major thresh from a competitor after you entered this, don't just not mention it, say there's a major threat from a competitor has got capability of entering, here's what we're gonna do if he enters, and then you spell it out, so very important is to cover that your strategy your strategy is and I mean I split up strategy and tactics - strategy is what are we trying to do what we're trying to get into this market first that's our real strategy, we wanna be the first in the market. Now our tactics well what are we gonna do with a with a very expensive high value product but its gonna work how you're gonna distribute it, how we're gonna price it, these are all tactics you see, so how you gonna promote it, gotta advertise it and different things like that then you so you cover that and then you wanna cover the implementation, how we're gonna actually implement it step by step and how are you gonna judge whether you're winning or losing as you go through this thing. So all these things, its a lot of fun you know, its a great thing to do.
