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10/12/06

BUSINESS PLAN FORMATION PART 1


Many people in our community have asked me to talk about business plans. I decided that it was the next logical step and am proud to present the business plan series! Over the next couple of weeks I will discuss a different portion of a typical business plan. KEEP IN MIND, there are many different ways to organize a business plan and that sections have many different names. However, for the most part, each section in a business plan, regardless of name used, accomplishes a specific task. The importance of each section depends on the product/idea/situation you are pitching and to who you are pitching. I am only going to give you a general layout of a business plan. Could you use the layout I give you for a business plan? Absolutely, I have used this very format in some of my business plans. However, as I mentioned above, there are many formats. If you do not feel comfortable with my format, do some research and find a format you are comfortable with.

With all of this in mind, we begin with the first section of a business plan, the EXECUTIVE SUMMARY (hereafter “ES”). The ES is the first page, with the exception of the cover, that your potential investor will see. The ES is where you grab the investor’s attention. Think about an ES like this. The ES is the equivalent to the first paragraph in a novel. You have only a few sentences to impress the investor. DO SOMETHING STUNNING! The ES is the part of the plan that allows for the most creativity. My advice, GET CREATIVE!

Your ES should include your pitch. Do not write, “I am going to present you with X!” For example, in the business plan that my business partners and me wrote for our restaurant concept, our first paragraph read:

The world has never before experienced a restaurant of this nature. For too long have generations fantasized about this taboo subject; for too long has it sit idly by and watched; and for too long has it waited to come to fruition. The mood is about to change. A new concept will revolutionize this industry and break down the barriers of old. The threshold of tradition is about to be challenged. Dining has a new experience, and that experience is (our restaurant name.)”

Do you see what is going on here? This may grab some people’s attention and it may not others, but no matter who you are, I know this paragraph instills, at least, a small amount of curiosity. In fact it instills just enough curiosity to read on. If this happens when investors read your ES, mission accomplished!

There is another component to your ES. Once you have grabbed the reader/investor’s attention, talk a little about your idea/product/situation. Tell the investor what “it” is. Do not go on for pages, but in a few CONCISE paragraphs, tell the investor about your idea/product/situation.

Lastly, an ES should also have a brief paragraph about your potential customer base and why your idea/product/situation will be successful with the customer base you have identified. Your ES should encompass your entire business plan in only a page or two. You have a pitch, information about the idea/product/situation, potential customers, and why the customers will buy your idea/product/situation. These are important aspects of an ES and are necessary to ensure that you potential investor does not become a lost opportunity.

Keep working on it and e-mail me if you have any questions: cashspeak@yahoo.com. Also, no quote today because I want to wait until the end of this series, but I will say that success only comes to those who want it. So ask yourself this question, “Do I want success?”

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