datachannel.org –6 Questions Every Business Plan Should Answer. Creating the perfect business plan is often difficult for a variety of reasons. However, one of the biggest challenges standing in the way of a good business plan is the fact that often two investors, judges, or members of your audience don’t look for the same thing when evaluating a business plan. To help, here are six questions every business plan should answer.
What is competitive advantage?
I always look for what will give the company a competitive advantage over companies that want to offer the same or similar goods and services and an analysis of the competitive landscape. I pay particular attention to the existence of valuable intellectual property, be it patents, trademarks, copyrights or trade secrets, which act as barriers to entry for competitors. Likewise, I like to see a discussion of the intellectual property of the closest competitors and how the new company will avoid infringing on it. – Scott Locke, partner and chair of the intellectual property department of Dorf and Nelson LLP
Are you in a growing market?
The key to any successful business is to be a growing company in a growing market. A business plan should articulate how entrepreneurs will enter the market, apply their investments to prepare them for rapid growth, and participate in the expansion of an industry that is thriving on a better-than-average growth trajectory. Since I have spent my career working for hypergrowing companies in rapidly expanding markets, founder of several small businesses and adjunct professor of an entrepreneurship course, this has been the common denominator. – Walter Recher, CEO of SmallBall Marketing
Will customers pay for it?
When I look at business plans, I always want to know how owners intend to engage paying customers at a rate and amount that allows them, as owners, to be in business and stay in business. My most frequently asked question is, “How do you plan to eat and dress and where do you plan to sleep while you get this company off the ground?” My hope is that it will cause students to reflect on why they intend to take the risks of entrepreneurship. – Andi Gray, CEO of Strategy Leaders
How will the company’s staff be composed? In every business plan, I like to see the recognition of the need to cover and staff the manufacturing, sales and finance parts of the company. Roles should be established for the entity as if it were mature and successful. If necessary, more roles should be assigned in the beginning and filled with the right people as the entity grows and the time is right. I like to see this kind of thinking process because it shows me that they recognize that they won’t be able to do it all on their own and that business success revolves around collaboration and management. It also shows that they recognize their limitations, the ability to focus on their strengths, and the need to attract others who know what they don’t know in order to achieve their goals. – Larry Holfelder, CEO of Connect My Advisors
Is the product innovative?
Is the idea for the product or service innovative, a unique invention or is the dream a real inspiration? By innovative, I mean whether the business plan focuses on a new breakthrough in technology or existing services delivered in a new and engaging way. If inventive, can the idea be protected from new or existing competition? Finally, is the assembled team an excellent group that cannot stop them from being successful? Are they inspiring to me, each other, and their marketplace? While this is very simple in summary, the task of evaluating by the three “I” criteria is something to be vigilant while reading any plan and listening to any entrepreneur. — Irwin Glenn, Managing Director, Profit Velocity
Are the plans and goals realistic?
I look for it to be a realistic business plan, not something that is pie in the sky. I want to see reasonable expectations. I tend to look more on the conservative side because I feel it is the safest way to go. The idea doesn’t have to be reasonable, the plan does. The idea can be anything. I always look for projections on what the company will do in the first year, second year, third year and fourth year that show sales, expenses, profit graphs as the company progresses. Such assumptions must be reasonable.