Transparency and Due Diligence – Keys to Raising Capital

With referrals, ads and SEO responses from entrepreneurs and business owners worldwide, but primarily throughout North America, each week we receive as many as 10-12 draft or in some cases considered final business plans. In addition, our deep team of professionals has completed as many as 20 business plans in one month, often just edits on draft plans received vs. completing a business plan from scratch.

In blogging over a period of time, I have often written about the pitfalls of templates and software for those who Google “business plans” and end up using flawed templates that call an “Introduction” an “Executive Summary” and lead so called business plan writers or entrepreneurs to prepare flawed business plan after flawed business plan that ends up in investors’ trash can after investors’ trash can.

Approximately 95% or more of the time, the business plans we review are lacking the same critically important components, including a quality Executive Summary that sums up the entire business plan(and gets you in the door!), a detailed Market Analysis and thorough Competitive Analysis, detailed forecasts that include month-to-month worksheets that establishes a better working capital assessment, let alone detailed Notes and Assumptions vs. leaving the reader to draw his/her conclusions out of thin air as to the source of the numbers.

Investors and lenders require due diligence to invest and lend. Transparency goes hand in hand with due diligence. When a business plan makes a statement, it needs to be supported. As one of many examples, if you say you have a contract to produce revenue, either attach it as an Appendix or summarize it and offer it upon request. I tell many that perhaps I was born in the wrong state; I should have been born in Missouri, the “show me” state since that is the approach I must use with those who seek capital for their business plan. Investors think along these same lines.

There are many traps (http://thebusinessplanconsultants.net/toptenbusinessplantraps.html) that business plan authors can fall into in completing a plan, but none is more dooming than overconfidence, a real two-edged sword. Successful people need confidence to succeed yet overconfidence leads those that have not completed any business plans (or few) to believe they can complete one or hire a lone wolf consultant or out of work banker or recent college graduate that does not have the experience working with hundreds of clients and thus understand that transparency and due diligence are the keys to business plan success.

We have a team of professionals to prepare your business plan, including investment bankers. Contact us to ask for a free consult through Tim@TheBusinessPlanConsultants.com