With hours to kill waiting for my plane at Manchester airport, I bought a few books, one of which was Common Sense Rules: What you really need to know about business by Deborah Meaden. Now Meaden is the UK’s version of Arlene Dickinson on their Dragon’s Den, and from reading her book, I would conclude she is one smart, tough cookie, who has earned a reputation for her straight-talking, no-nonsense approach.
She also raises some important points on making the pitch and getting investors onboard. Just as the title of her book conveys, much of it is common sense. Yet we seem to forget that in our passion to market our business idea.
She observes that entrepreneurs rarely give would-be investors enough information to persuade them to part with their hard-earned money. As she says “today, more than ever, an entrepreneur has to present some pretty compelling reasons for an investor to part with cash, which means presenting a rock-solid pitch as well as some convincing numbers.”
She encourages entrepreneurs to think carefully about how they contact potential investors and what they send by way of introduction. Do your homework and find out who actually makes the investment decisions at a company, she suggests.
Rarely do people get their business plans right, she shares. They either do not include enough information or they don’t include the right information, or it becomes a lengthy document sharing minutia that is of no interest to an investor.
Before ever approaching a potential investor, the business plan needs to be in place. It should be a simple, step-by-step document outlining timescales and milestones, what has to be done in the run up to the launch and what it is all going to cost. What investors, like Meaden, are looking for is something that “outlines in a punchy way what the business is all about, where it is going and what it needs to get there.”
As Meaden concludes, having a business plan is not just for raising money, it keeps you on track and makes you think through all the different aspects of running your business – competition, marketing, financial, etc…
Do you have one? Even if you have been in business for several years, it is not too late to start. You might be surprised at how the process makes you focus and gives you the tools and confidence to succeed.
(You can find business plan templates at www.bdc.ca)