And here's a key point -- the business plan doesn't really sell an investment; rather, it opens the door to further discussion and meetings. Keeping this in focus will produce a far more effective business plan than describing, in detail, every aspect of your business.

Go to the top of the stack, look professional and secure an investor meeting -- this is what every business plan writer should strive for. 
 

1.  Presentation Matters!
 
Too often, articles on business plans deal with the content of a plan, rather than specifics on how to package that information for the investor-reader. If you want to go to the top of the 100 plans that fall across a VC's desk, you need to make it easy for them to choose you.  Your cover layout and the look and wording of your inside pages should make someone want to pick up your plan and read it. Of course, you need to have done your homework and have great information on your market, staffing, operations and strategy -- but don't drown that information in an endless sea of words.

Use Marketing Concepts to Sell the Plan

Even if you have the best idea, team and plan since Microsoft, you aren't going to shine if all that information is buried. Use lots of headings and subheadings to help the reader. Throw in some charts if you have a lot of data. Use color consistent with your industry and have a logo designed. In other words, any basic marketing tools you'd use to produce a sales brochure should also be used when creating your business plan.

Look at any of the thousands of annual reports put out annually -- including their use of colors and fonts and how they present their information. These are essentially business plans! Big companies spend a lot of money on these reports to make sure that investors keep buying stock in their companies, and you can use these great ideas when sourcing your business plan.
 

2.  Put Your Best Foot Forward
 
What is most attractive about your company? Is it your board? Your technology? Your big contract with a Fortune 100 company? Make sure it is perfectly clear to investor-readers by putting this information in the first six sentences of your executive summary. In the plan, move sections around until the story makes the most sense and your strongest points are repeated throughout. 

Use Content Order to Your Advantage

There is a set amount of content that any business plan needs to have, but the order and presentation aspects are not set in stone. It is unlikely you're going to have everything perfectly quantified by the time the plan goes to an investor, so you need to sandwich weak areas in between strong ones. 

Professional business planners can help because they've most likely worked on a similar plan at some point in their careers. But, if you do write your own plan, make sure the investor will be clear on your strengths, so you can at least arrange a phone conversation. Again, look at annual reports and see the diversity in how the information is presented, and in what order.  

3.  Write Clearly and Powerfully 
 
No one wants to wade through limitless lines of unending reams of text, filled with clichés and statistics. Simple, clear writing that your teenager can understand is more powerful than super-long sentences filled with technical jargon and big words. No one is gong to be impressed if you need 50 words to describe what you do -- but if you can sell them in less than ten, you'll have a winner. 

Included below are "before" and "after" examples from the opening lines of an executive summary. Which do you think is more effective?

Before:

"The Company holds proprietary technology for the design of programmable digital stream processing chips, whose initial application will be in the broadband communications industry. All amounts in this business plan are in U.S. dollars. Two generations of chips are under development. On the assumption that funding is secured in the fourth quarter of 2001, the first chip designated as xxx2 will be available by the fourth quarter of 2002. This chip will have an expected speed of approximately x.5 billion operations per second. It is primarily designed for two-way broadband network access in a DSL or a two-way HFC cable environment."

After:

XXX Inc. develops semiconductor chips for DSL, cable TV and Internet home appliances that combine unprecedented speed with downloadable upgrading. These chips represent a significant advantage in a $22-billion annual equipment market. Their speed is five times that of their closest competitor, and a typical national cable company could save up to $165 million annually from being able to upgrade their service offerings without having to swap out hardware.  

The second version creates an immediate understanding of the product, the market and the size of the opportunity. The first one doesn't get around to it until page two!

The Elevator Pitch Approach

Use the elevator-pitch approach: Limit the selling message of your business plan to 30 seconds or less, and then convert that to text. Time yourself, and ask others to read it, preferably those with journalism or English backgrounds. The book The Elements of Style (by Strunk and White, http://www.strunkandwhite.com/) is full oeat ideas that you can apply. Hire a writer if you need to -- remember that your entire business future hinges on whether or not an outsider investor (who may not understand industry buzz words, but who does have cash to invest in exceptional opportunities) can understand your plan. 

4.  What's in It for Me?

Investors are most likely going to need to sell your plan to other investors or partners (which is why it needs to be easy to sell). They need to understand what they are going to receive as a result of this investment. Chances are, they'll change the deal points as the negotiating carries on, but they need to have a basic understanding of:

The amount of capital the venture requires,

The amount of shares you plan to issue (and what class),

Whether capital raised will be used for debt or for equity,

The ROI versus the risk, and

Most importantly, the exit strategy. 

If there isn't going to be a payout for several years, are you going to issue dividends to investors? Will the investors have control of your board, or can they veto senior management choices? 

This type of information is easy to put together and will make a plan look extremely professional. Figure out exactly how you want the investors to be involved in your company before you meet them . . . because if you don't, they'll figure it out for you.

5  Make Your Financials Real and Readable

More than likely, your numbers are going to be scrutinized by some very intimidating financial wizards. If you plan to raise $10 million, you need to show how you plan to spend it; otherwise, why raise that much? Most often, the financials have brilliant assumptions about sales revenues and advertising budgets, but fall short in areas like capital expenditures, depreciation, taxes payable, interest income on all that cash you're going to raise and so on. 

The financial plan is just that -- a numerical representation of what you describe in your business plan. Your pricing strategy, assumed customer-acquisition rate, staffing needs and international expansion plans should all be reflected in your numbers. If you're looking to have five offices by year three, and your office rent stays the same, someone's going to wonder how you derived these numbers. It doesn't take much more time to create a realistic scenario than it does to paste numbers across the years. Also, if you use certain fonts and colors for headings in the document, make sure the main heading in the financials section has the same look.

But, here's the catch. Just as the business plan is designed to achieve an audience with an investor, so should the financial numbers. Again, you want enough information for this section to look professional and well thought out, but not so much information that it is impossible to quickly assess the company potential.