Learn2 Write a Business Plan - Step 1

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        Learn2 Write a Business Plan
      
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                          (Continued) 
      
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                                    Understand your
      
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                          audience 
      
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                          All writers must begin by asking who's going to
      
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                          read their work. This is especially true for people
      
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                          writing business plans, because they have the
      
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                          added task of persuading readers to part with
      
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                          their money. Be sure your plan targets your
      
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                          readers' specific concerns. Your audience will
      
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                          include: 
      
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                          Yourself. Experts say you should write a
      
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                          separate business plan for your eyes only. It
      
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                          should probably be the most conservative in
      
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                          terms of projecting future profits, so you don't
      
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                          overestimate your business's potential and end
      
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                          up with angry creditors down the road. 
      
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                          Banks and other lending institutions.
      
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                          Bankers are generally the most conservative of
      
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                          investors. They're looking for a more or less
      
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                          foolproof plan, plus collateral (equipment,
      
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                          buildings, vehicles, etc.). In addition, you should
      
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                          be prepared to show them that you and your
      
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                          team are trustworthy. They're going to want to
      
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                          see a detailed credit history, plus as much
      
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                          evidence of past entrepreneurial success as
      
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                          possible. Be prepared to provide a good
      
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                          explanation if you've had credit trouble in the
      
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                          past. 
      
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                          Individual investors. While individuals may be
      
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                          willing to take more risks with their own money,
      
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                          they're also going to expect more in return. A
      
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                          profit of 10 percent per year probably won't
      
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                          tempt them, since they can easily make the same
      
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                          amount by investing in larger, more established
      
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                          companies. Without being unrealistic, you want
      
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                          to emphasize that your venture could be highly
      
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                          profitable. Just don't make promises you can't
      
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                          keep. It's best to consult a good business lawyer
      
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                          before reaching any agreements, since individual
      
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                          investors might try to sue if they aren't happy
      
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                          with the way things are going. 
      
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                          Venture capitalists. Competition for venture
      
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                          capital money is fierce, so you have to make a
      
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                          case that your company is not just going to be
      
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                          profitable, but will grow rapidly over a period of
      
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                          five to seven years. A personal introduction will
      
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                          help enormously, since venture capital firms get
      
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                          many more proposals than they can read. 
      
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                          Relatives. If you borrow from relatives, keep
      
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                          things as professional as possible. This way, you
      
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                          can still spend holidays under the same roof.
      
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                          Don't expect them to sign on out of a sense of
      
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                          duty. Show them your venture can be genuinely
      
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                          profitable, and make sure any agreement you
      
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                          reach is committed to writing. 
      
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                          Employee investors. You can make your
      
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                          employees partners by promising them a share in
      
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                          the ownership of the business. In return, they
      
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                          may be willing to work for a below-average
      
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                          salary and even kick in some of their own
      
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                          capital. But again, make sure you have written
      
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                          agreements and consult a good business attorney
      
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                          for potential problems. For example, you need
      
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                          to be able to take action if your partner suddenly
      
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                          stops showing up to work. 
      
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                                             Step 2 
      
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