Most entrepreneurs think they can get funding simply by sending out their business plan. Unfortunately, this rarely works. Over the past 15 years, my company, Growthink, has developed thousands of business plans for entrepreneurs seeking funding.
But I always tell people not to send the plans to investors. He trick is not simply sending out a plan. It is finding the best way to leverage it.
Here's why:
Your Business Plan Can't Answer All the Questions
Regardless of how good your business plan is, it will never be perfect. For instance, it can never answer every question an investor might have. If it did, it would be 100 or more pages long, in which case, no one would read it.
Regardless of how good your business plan is, it will never be perfect. For instance, it can never answer every question an investor might have. If it did, it would be 100 or more pages long, in which case, no one would read it.
Likewise, any written document, including your business plan, is subject to interpretation. As a result, based on the experiences of the investor, he may incorrectly assess your opportunities or challenges.
That's why, ideally, your first written correspondence with a potential investor should only include an overview or brief information about your company. Put it in the form of an email or a one-page Executive Summary. Include within it bullets about what your company does and why it's uniquely qualified to succeed. Such a document gives the investor an overview of your venture and allows him to determine if it's something he's interested in pursuing.
Get Investors to First Invest Time
After giving investors an overview of your company, your next goal is to secure a meeting. Realize that investors have two scarce resources: their time and their money. Start by getting them to invest their time in learning about you and your company. Importantly, how they feel about you personally is often equally significant to how they feel about your company's success prospects.
After giving investors an overview of your company, your next goal is to secure a meeting. Realize that investors have two scarce resources: their time and their money. Start by getting them to invest their time in learning about you and your company. Importantly, how they feel about you personally is often equally significant to how they feel about your company's success prospects.
So, secure the meeting, bond with the investor, and use the time to determine and answer all of his questions. You can generally answer questions far better in person than including them in your plan, as you can adjust based on follow-up questions and/or the investor's body language and tone.
READ THE FULL ARTICLE HERE: http://www.engee.org/2013/08/why-you-shouldnt-send-your-business.html
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