77 questions every business plan should answer

Today’s Globe & Mail has an article by Doug Steiner about the questions a small business owner seeking investment capital should be ready to answer. He cites an old photocopy of a handout entitled “77 Questions Every Business Plan Should Answer,” but unfortunately only lists six of them. (In the comments, I inquire after the rest.) Here’s what he shared:

Your business wants my money? Good luck

Question 1 is meant to be a quick killer: “Why will this business succeed?”

If you can’t answer that, then your hope of getting anyone other than mom and pop to throw you a financial bone is pretty slim. You say you have a unique idea? I doubt it. The only unique ideas I’ve heard pitched were complete eye-rollers — as in, “You have to be kidding.” One guy who came to see me during the Internet boom wanted to start a website that would help tenants trade their way out of building leases online. Could he have found anything more likely to fail?

Question 8: Does the product or service meet a need or a perceived need of the customer? Don’t tell me people are hungry and will eat in your new restaurant. It will have to provide more than food. It’s also about the experience, the price and the location. You have a plan for those three, too?

People looking for money also have the annoying habit of assuming that an investor with a lot of dough will throw little bits of it — say, $5,000 or $10,000 — at just about anything. Forget it. Managing a few big investments is way better bang for buck than funding a lot of small ones.

Question 40: Why will your business succeed when it must compete with larger companies? Another “Hunh?” for most start-ups. Any business that takes off grabs the attention of established players and other new ventures.

Ergo, Question 42: If you plan to take market share, how will you do it?

Question 60: What business experience does the management team have? No experience, no money — not even a hope.

And the clincher is Question 76: How will investors get their money out? We want our money back, you know, to invest in the next great thing. If you can’t tell me how and when I’ll get it out, then it’s not going in.

So, here’s some advice based on those cranky questions: Write a really good business plan. You can buy templates. I use one I modified from Planigent. It costs about $30, and includes spreadsheets for modelling cash flows, and PowerPoint for creating presentations to wow prospective investors. Don’t call anybody until you’ve finished the first point.


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