June 13, 2008, Newsletter Issue #1: Do I Need a Slick and Thick Business Plan to Impress Lenders or Investors
Tip of the Week
Contrary to what many think, the level of slick or the number of pages has little to do with the probability of a lender or investor providing the funds needed. Both lenders and experienced investors had seen hundreds, if not thousands, of business plans. Most will know right away whether the plan has manageable, realistic substance or is an elaborate work of fiction. Depending on the industry and quality of content, business plans of as little as 5-7 pages can be as effective, sometimes more useful than 30-40 page plans filled with useless, unrelated information. There are only 2 questions that need be answered for an entrepreneur to receive the funds needed:
1) Does the business have a good probability of succeeding?
2a) (Lender) Will the business generate sufficient cash flow to repay the loan?
2b) (Investor) Will the business generate sufficient profit to provide a decent return on investment?
That's it. There really is nothing else of major importance to anyone deciding to make funds available.
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