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).

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.

© Paul Lemberg. All rights reserved

Paul Lemberg's clients call him "the unreasonable business coach" because he insists they pursue goals and take actions far outside their comfort zone to make more money than they previously thought possible. To get business coaching tips, tools and strategies like these, visit http://www.paullemberg.com/Business_Coachin g.html.

---

Legal Strategies in Business Plans

Writing a Business Plan these days is tough, venture capitalists... Read More

Be Like Bill - Think!

Twice a year, Bill Gates goes to a remote island... Read More

Getting Started with Succession Planning: Part I

GETTING STARTED WITH SUCCESSION PLANNING: PART IA survey of 4,300... Read More

The Chasm of Change---- Restructuring ----- The Goliath

Richard L. Daft one of the country's recognized academic leadership... Read More

Parking Business, the Details on Increasing Lot Revenue

If you are in the parking business and own or... Read More

Dayton, OH; Why your Company needs to expand there

In Ohio: besides the 3-Cs you should look at Akron,... Read More

The Best Entity to Hold Real Estate

Possibly THE most frequently asked question of me is "What... Read More

Restaurant Startup - Part 1: Market Research ? What are Potential Competitors Doing?

The first step in starting a restaurant is proper planning.... Read More

How Copying the HBO Schedule Can Boost Your Business

I'm not talking about posting the HBO schedule on your... Read More

Attributes of Companies You Dont Want to Buy!

There are no "rules of thumb" in the pursuit of... Read More

The Six Sigma Method and Design of Experiments

Six Sigma is becoming a proven approach for businesses and... Read More

Corporate Venturing For Emerging Growth Companies

The boom of the dot-com era in 1999 brought the... Read More

Own Your Niche by Building a Niche Community

In 1997, David Steele was making the transition from a... Read More

The Top 10 Priorities That Guard Your Five-Star Reputation

Making money doesn't make your reputation... your reputation makes you... Read More

TQM Total Quality Management, the book

Every decade we seem to come up with a buzz-word... Read More

Business Plan Long Term Goals

Writing a business plan is not an easy endeavor, nor... Read More

Are You Aware of Planning in Business?

Human beings are rational agents. Rationality endorses one to take... Read More

Why Create an Annual Plan?

Can you imagine going on a road trip without knowing... Read More

Innovators Role at Hard Times

One Research Scientist at the Hewlett-Packard (HP) Imaging Systems laboratory... Read More

The Top Five Reasons Strategic Plans Fail

"Most great plans aren't. They are just nice, high-level ideas."That's... Read More

The Tables Have Turned - Its Officially a Sellers Market

Private equity firms have raised so much capital over the... Read More

Site Selection and Demographic Tips for Establishing Outlets

Many cities have home pages on the Internet. Many of... Read More

Have You Identified the Enemy?

One of the most powerful driving forces in human nature... Read More

What is a Shared Vision?

So what makes a vision successful? Everyday companies try to... Read More

Offense: Beat the Odds

When in doubt, cut that out! Yeah, yea, doubting Thomas... Read More