Mistake #5 is going to sound completely self serving. Maybe it is. Yet, I believe it to be true.
The Fifth Mistake some entrepreneurs make is not seeking professional help to write business plans and presentations. Even beyond that, many entrepreneurs, because of thier lack of understanding of the process (see Mistake #4), fail to take advantage of the opportunity to learn from professionals who know how to prepare plans based on what prospective investors are looking for.
To be clear, there are some very good software packages which can walk you through the preparation of a business plan. They can certainly be a good way to create a first draft. However, without a clear understanding of the market (investors), these packages can fall short.
Now there are some investors who will say that an executive summary or "a few slides" are all that is needed. I think this is dangerous because the preparation of an executive summary may not force the entrepreneur to think through all of the key issues. An executive summary should be the last thing that is written, not the first. By definition, a summary is a condensed version of something that has already been prepared!
I concede that there is a huge grey area in terms of what some investors will want to see and what others will want to see. Is it possible that you will find investors based on a 2-page summary or on 10 slides? Yes, it's definitely possible. But in general, the mere act of writing a plan in conjunction with a professional consultant will surface a lot of questions. QUestions which, if answered intellegintly, will demonstrate to investors the potential value and risks assocatied with your proposal.
A few comments on presentations. A lot has been written about the poor state of presentations. Those who continue to use bullet point-based presentations operate under the assumption that there is a validated rationale for using them...that somehow, text-centric slides are the best way to transfer information from presenter to audience. Or that somehow, there is research which demonstrates this association, and hence this is why they are present in PowerPoint templates.
This is certainly not true at all. We learn best through auditory (listening) and visual cues (simple pictures and diagrams). Think of it this way. Are you more likely to remember a song by listening a few times, or reading the lyrics a few times?
Excerpts:
Many plans are
too long (more than 30 pages), full of technical details (which are likely confidential, and hence should not be in the plan anyway), and emphasize the wrong things, such as financials, over markets and competition. Worse still is when the “business plan” takes the form of a poorly conceived PowerPoint presentation instead of a well-written, prose document, or presentations which are not synchronized with the prose document. Many go through great lengths to create very sophisticated slides, with complex charts, graphics, arrows, clip art, and the like. It is almost as if they think PowerPoint prowess will be correlated in the minds of the audience with investment attractiveness! Who can listen and read at the same time, with full comprehension!?
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