The most important thing you can put in your Business Plan is believability. Once I was writing a bio for myself and had my brother (the marketing guru) critique it for me. He immediately balked at the phrase “thousands of IPOs” saying that it smacked of hyperbole. I, of course, protested! During my twenty years on Wall St., I had worked on at least two hundred to three hundred new public issues of bonds, preferred stock, and equities each and every year. Add them all up, and you get thousands. Right? Wrong. There may have been thousands of IPOs in reality, but no casual reader of my bio would accept that as a realistic statement. It just doesn’t sound right. It sounds like I am exaggerating my involvement. So, we re-wrote the statement to read “hundreds of IPOs” which people found very impressive even though I was secretly cringing at the image I knew would mean that I had been a real slacker on the job, if it had been true.
All your facts, claims, and figures should seem reasonable. You do not want to claim to be the first, the best, the only, or the premier anything. Even if your figures suggest that you will indeed make $20-billion in profits in Year 1, do not say so. Never use the B-word when referring to your revenue projections! It is an automatic disqualifier. Always sound humble, but do not be stupid about it. If you have a question as to whether your claims sound reasonable or full of hyperbole, pay some outside consultant to give you a professional opinion. Do not ask a friend or your Mom to critique your document. They will tell you it is good even if it is terrible because, quite naturally, they don’t want to hurt your feelings.
One of my clients, a delightful middle-age woman well known in Hollywood social circles, brought me the Business Plan that she had slaved over for months. She wondered why this gorgeous example of graphic design and digital artistry was not attracting the attention it so richly deserved. When she showed it to her friends, they all raved about what a wonderful Business Plan it was. When I looked at it, I saw a document with lots of inappropriate pretty pictures and a lot of unproven claims based upon the old ‘as everyone knows’ bit as well as lots of ‘feelings’ such as “I feel this would be a good thing for World ecology” and “We all have a hole in our lives that this will fill while making our investors millions of dollars. How could one go wrong investing in XXXXXXXX?” The amazing thing to me was how this intelligent worldly woman could wonder why Venture Capitalists weren’t anxious to give her the $10-million she wanted.
Another important thing is to make sure all the people you list as Advisors actually know they are Advisors! Investors just might call them up to ask them why they are involved in your company, and it helps if they recognize your name.
I once started a consulting gig for a young woman who had an interesting idea that involved online promotions of romance books with eventual television series or movie production in goal. Everything looked reasonable until I got to the Board of Advisors section where she had listed some very big Hollywood names. Oddly enough, I happened to know a couple of these people personally, so I got on the phone to check out what they thought of my client and not one of the people I called had much recollection of her. “Oh yeh. Is she a tall redhead? Has some idea for an online book thing? Kinda spicy stuff? Yeh. She invited me to lunch so I went. Terrible idea. Both the lunch and her project!”
In fact, everything you put in your Business Plan should be supportable. If you mention that some expert said that a person who could figure out how to produce a product like your product would be likely to make a $-zillion, then you should put in a footnote explaining where you got the quote. If you are using an article that strongly supports your views, you might want to include it in the Appendix. However, do not do this unless the article is of vast importance. You do not want the Appendix to rival the New York City Yellow Pages in size!
You also do not want to talk about future dreams. If your intent is to start out making widgets, do not go into describing how you will grow your widget making business into a medical equipment company and then in a few years into a major defense contractor. One of the major horrors that keeps venture investors awake at night is entrepreneurs who seek money to finance Idea A and then end up spending it on Idea B. This happens all the time and usually ends up in a very messy legal battle.
Stick with the basic business and prove in your document that such a business can indeed make a profit that will enable it to expand into other related markets. Keep everything short and simple. Keep it easy to understand. Do not add feelings or emotional assessments of how important your company will be in achieving world peace.
 This is what a footnote looks like. You can find it under INSERT > FOOTNOTE .