By Paul Lemberg
Whether you are seeking capital for your company or are
optimizing your business strategy, the most important element
particularly for outside investors - may be your written
business plan. You can tune-up and supercharge your plan using
this 19-step checklist. When your written plan firmly answers
yes to each of these 19 questions, your market/product
is in terrific shape plus you increase the odds of attracting
If you don't already have a written business plan - write one!
Your business plan is a blueprint for your whole company. It
describes in detail your goals, the financial and technical
viability of your goals, and the strategy you will use (or are
using) to reach those goals. And your business plan is a
working tool - it is a yardstick to measure your progress and
compass to keep you on course.
Must a business plan be written?
Yes! A plan which is not written usually has not been thought
through fully. And despite what you may have read, it is
doubtful that any business ever attracted capital on the back
of a napkin.
Use this checklist as a way to identify where your strategy,
spelled out in your business plan, needs work. Each of the
questions below highlights an area considered critical to
1. Can the key ideas behind your product or service be stated
in one or two sentences? (y/n)
2. Does your company have at least one unique and compelling
competitive advantage, which cannot quickly or easily be
duplicated? (y/n) Examples are a special feature, a cost
advantage, a technical refinement, a new delivery system or a
3. Is your competitive advantage proprietary? (y/n) That is,
can it be copyrighted, patented, trademarked or otherwise
protected? Can you keep it exclusive to you?
4. Is your industry segment growing by 25% or more? (y/n) If
not, can your new product dominate its segment? If the answer
is no, you probably won't be able to generate the kind of
financial returns investors look for.
5. Does your product or service create a new market? (y/n)
Although generally positive, this could be a trap - in a brand
new market, the potential can be slow to develop. Lotus Notes
created a new category but took years to create value for
6. Is your market in "early momentum" - the market growth
where market revenues have recently taken off? (y/n) Venture
investors prefer markets in this stage because the
time-to-create-value is shorter and the growth potential still
7. Is your target market segment 1) tightly defined over a
population sharing common characteristics, 2) large enough to
support significant profits, 3) served by communications
channels to reach that market - i.e., trade or special
publications, response mailing lists? (y/n)
8. Is your company filling a gap in the market, or do you have
a "gee-whiz" product which you think is so terrific that
customers will surely want to buy it? (y/n)
9. The benefit of your product or service to users is 1)
significant, 2) quantifiable and 3) cost-justified? (y/n). If
you provide a benefit which is important, and you can prove it
- there is a much higher probability of generating sales.
10. Is there a demonstrated market for your product? (y/n) If
you have an existing product, is your customer base expanding?
Investors would rather fund sales and production than product
11. Is there wide appeal for your product or service? (y/n)
there enough potential customers in the target market that you
can earn significant profits, for a long time? Are there
follow-on products to sustain revenue and profit growth?
12. Does your company have the ability to sell your product?
(y/n) Particularly in companies where the founders have
technical backgrounds, a question to ask is "Who is going to
sell your product or service?" What about outside
13. Is there an experienced management team? (y/n) Investors
would rather fund a solid team instead of one lone genius with
a great idea. The team should be highly qualified in
sales, finance, and the product/service area itself. Of
a demonstrable track record helps.
14. Can you demonstrate a likely return of 5-15 times
investors' capital, over a period ranging from three to seven
years? (y/n) The actual parameters used by venture investors
will vary based on which stage you are in (idea, startup,
development, expansion, turnaround).
15. Is there a clear exit strategy for investors? (y/n) The
most common strategies for returning investors' capital are 1)
going public; 2) acquisition of your company; 3) new
4) founder's buyback or management buyout.
16. Have other investors already put money into the company,
particularly the senior management team? (y/n) This reduces
apparent risk, reduces overall exposure, and shows that
management "has its money where its mouth is."
17. Have you clearly defined a structure for the investment
seeking? (y/n) The structure should include: who is involved,
how much capital is needed, what minimum investment you will
accept, how much equity that will buy - and, of course, the
projected return on investment.
18. Are your financial projections realistic? (y/n) Have you
soundly justified your projected growth rates and other
19. Have you clearly examined the risks? (y/n) Investors like
to know that you have considered the risks. This is key - can
you turn your risks into opportunities?
Too many no's? Remember, each "no" opens up an area for you to
strengthen your business. Even if you aren't seeking capital,
each question highlights a critical success factor - which,
when mastered, will increase your profits, your performance,
and your future success.
In order to help you discover hidden value and opportunities
your existing business, and to make it easier to spot
problems while you are just starting out, I've created the
Discover Hidden Value Business Building Guide. A remarkable
to accelerating the growth and profitability of your business,
this program of insight-provoking questions and checklists
enables you to rapidly diagnose, troubleshoot and optimize
every part of your business, from marketing to sales, customer
service to product development and finance to production.
About The Author: Paul Lemberg is the President of Quantum
Growth Coaching: More Profits and More Life for Entrepreneurs,
Guaranteed. To get your copy of our free report with detailed
steps to grow your business at least 40% faster, go to