Angela had heard it so often that it sounded like a mantra: Write your business plan!

The business itself was not an issue. It was going to be a business featuring her handmade butterfly inspired caftans. Her creativity was inspired by the spectacular Monarch butterflies that settled in her home town every year. She had the colors and designs ready. Now she needed to open her business.

That was the first thing that stopped her. What kind of planning did she need to do before opening her business? What licenses did she need? What taxes would she have to pay? Who were her clients going to be? What kind of profit could she make? Where could she go to get information? She got dizzy thinking about it. She was an artist, not an entrepreneur!

SCRIBBLES AND NOTES

So she sat down to write her business plan. She figured costs and taxes and leases and employees and advertising, working through a series of worksheets, step by step. She busted a few pencils, but never got near a computer. She even went to her local banks and met with two different bankers. And when she finished, she had an amazing discovery: she didn’t even want a real store to start out. She wanted to start out on the internet. She figured that the international potential of millions of customers, plus the low overhead of an internet business, made it a better option than opening her own brick and mortar store.

So that is exactly what she did. That was nearly two years ago, and she has done very nicely.

THE FORMAL PLAN

But now she is writing a second plan for her business. Now she needs to expand and hire seamstresses, probably contract workers. And so many people have asked if they could come by her store that she now needs a store/workshop. She is really looking forward to the store as a way of working directly with some of her clients.

But now she needs financing, so she is writing a new plan for her business.

Rightfully, Angela knew that the plan that she created for herself just will not do for bankers. The one she wrote for herself was very analytical, with lots of options explored and lots of worksheets. Now that her direction is in place, and a successful track record backs her up, the business plan she is writing is of a very different sort. This one is a sales presentation for the banker. She is even putting lots of photos of her designs.

Angela instinctively knows what many entrepreneurs struggle with: The business plan that you do for yourself is NOT the business plan that you can use for funding.

APPLES AND ORANGES ARE BOTH ROUND, AREN’T THEY?

This sounds so very basic, but many entrepreneurs simply miss the mark. For example, in the business plan you do for yourself, you want to list out all the competitors that you might have, and compare your own business to theirs. Some of them, truthfully, might even be better than your company. But in a business plan for financing, the object is different. Here you acknowledge that there is competition, but the focus is on your business with your clientele base.

Or in your own business plan you may list that you have money in a credit card that you can pull if necessary. But bankers don’t want to hear about that: it is poor business to use your credit card to finance your business.

The two types of business plans are a different mind set, a totally different approach. One you pick right off the tree, and the other you wrap into a fresh hot tart.

WHY, O WHY, O WHY O?

So your first job is to answer the question: Why am I writing this business plan? Am I investigating a business, and looking for the best options? Or am I writing this for a banker/investor?

Once you’ve got the answer to that question, the rest falls into place.

… PUTTING ON THE RITZ

Once you have your scribbles and notes, getting everything together for the formal plan is much easier. You know where to look, what information is valid and what is not, and you probably have a track record behind you that you can flaunt a bit.

VARIATIONS ON A THEME

Sometimes entrepreneurs will look for microloans, or approach Aunt Lizzie for a loan, or do any number of other things that need a more refined business plan. That is great. Just target the business plan to the intended audience, and you will hit all the right notes.

Every business plan book tells you how the Executive Summary is your opportunity to provide a brief overview of your business plan; capture your readers’ attention and imagination; and, summarize the plan’s highlights and key selling points.

So, why am I telling you these 3 things when you probably already know them?

Because it’s useless advice unless you employ one, not so obvious, age old marketing technique to make these points come alive.

This one technique is the key to the ultimate success of your business plan and its ability to attract potential investors. More importantly, it will help you raise money for your business…potentially a lot of it.

Best of all, it costs nothing to “do” and can save time finding serious investors.

The not so great news is it’s rarely found in “business plan” books or on most business plan websites.

It’s one thing David Galdstone doesn’t tell you how to do in his popular “Venture Capital Handbook.”

You won’t find it in David E. Gumpert’s book, “Burn Your Business Plan.”

In fact, the Small Business Administration, Business Plan Pro, and other popular business plan web sites never mention it.

A Wall Street Favorite

This ONE marketing technique is used by the most prestigious investment bankers on Wall Street to raise millions of dollars in equity and debt financing for their clients.

It’s how major newspaper publishers trigger the public’s curiosity and sell newspapers.

So, what exactly is this powerful marketing technique that single handily can unleash the value in your business plan? It’s writing interrupting and engaging headlines.

See, I told you it was simple.

Marketers and news people have always understood how effective, well-written headlines make it easier for readers to scan for information. Through experience and testing, they’ve learned that the public reads little else when deciding whether or not they are interested. And, I’m telling you that busy investors are no different.

Why Isn’t Everybody Using It?

Good question… see, most people providing advice about business plans are lawyers and accountants. People who get marred in legalese and make their money by making things complicated. They also tend to confuse headlines with hype.

The truth is that you can use headlines to provide a more powerful overview of your business plan, capture your readers’ attention and imagination, and better summarize the plan’s highlights and key selling points — all the things they say your Executive Summary must do, without resorting to hype.

Moreover, well thought out headlines, when taken collectively, succinctly tell your business plan story. Just by scanning the headlines in your Executive Summary, your readers will be able to know exactly what your business plan is all about and whether or not it fits their investment strategy.

The success of your entire business plan may stand or fall on what is said in the headlines of the plan’s individual sections. These headlines must arouse the investor’s curiosity and self-interest.

I have seen time and again, cases where business plan writers, both professionals and do-it-yourselfers, struggle writing content for hours, for days–fixing it, polishing it, rearranging it. Yet, when it comes to headlines, they put in no thought or effort, often resorting to the same old “information-less” sub-headings used in every sample business plan or template.

So let me ask you this: What good is all the painstaking work on content if there are no headlines to first stop investors and make them want to read your plan?

How To Give Investors A Reason To Want To Read!

Absent any previous knowledge of your business venture or plan, investors have little else to spark their curiosity and self-interest. In the absence of headlines or the presence of poor ones, the best writers in the world can’t write content that will sell the venture. They haven’t a chance. Because if the headlines are poor or lacking, the business plan will not be read. And business plans that are not read do not get funded.

Before starting on possible headlines, review the content in your Executive Summary. Somewhere in this content you are likely to find the four or five key selling points of your plan on which to base your headlines — not the exact words for the headline, but the concept on which your headlines will be based. Now spend all the time you need to get the best headlines possible, then rewrite and polish your content till it flows naturally from headline to headline.

Remember, headlines decide whether or not investors stop a moment and look at your business plan, or even read a little of it. And, headlines that appeal to investors’ self-interest, give news, or arouse curiosity in this order are often the most successful headlines.

Go take a look at the Executive Summary in your business plan. Do you use headlines to capture your readers’ attention and imagination and better summarize your plan’s highlights and key selling points? If not, you’re missing a great opportunity. Go ahead, step away from crowd and write headlines that offer investors something they want. When you do, they will take time to read the content in your business plan.

Once upon a time…

Sam was worried about his electrical supply business, and rightly so.

The initial burst of growth over the first three years of the business had halted in the fourth year and in the fifth his sales and profitability were now going backwards.

Fast.

Sam urgently needed more bank funding to keep the business afloat until he could drum up some more sales.

So he first met with Pam, his CPA, to complete a loan application and she started the meeting by reviewing the business’s financials.

“Not pretty” she observed.

“Agreed” said Sam.

“But I can’t figure out why we’re in free fall. Sure the GFC had an impact but we actually grew in the early stages of that buy now we’re going backwards. And I really need this loan so the business can survive the drought we’re going through at the moment.”

An uneasy pause filled the room.

“Do you have a business plan Sam?” Pam asked, even though she knew the answer.

Another uneasy pause.

“Er… not as such” replied Sam.

“Well that may explain why your business is in decline. The importance of a good business plan is one of the fundamentals taught at every MBA college and if you hire any business consultant worth their salt it’s one of the first things they’ll want to put in place. Besides” she continued, “the bank’s going to want to see a business plan including your financial projections before they’ll even think about giving you a loan”.

Sam could see the logic of Pam’s argument but protested: “Okay but I’ve got no idea how to do a business plan, let alone financial forecasts. Frankly, that sort of stuff gives me a headache.”

“Well naturally I can help you with the numbers side of the plan. And as for the rest of it that’s no problem either” said Pam as she reached for the stack of business cards in her top drawer and handed one to Sam.

“This guy’s a friend of mine but that’s not the reason I’m referring you to him. He’s not only got an MBA he’s also a qualified business coach and he knows how to put together a plan that’ll impress the socks off the loans officer at your bank.”

Sam took the card, called the coach and they all lived happily ever after…

… not.

Quite the opposite in fact.

Sam met with Rudy, the business coach, who explained that yes, he could help but that he’d need $2,500 up front each month.

Sam didn’t have that sort of cash to spare so he paid with one of his credit cards and made a mental note to apply for another credit card, just in case he needed it to fund Rudy’s fee in the upcoming months.

After all, according to Pam and Rudy, getting that business plan sorted was not only the key to better business performance, it was also critical to getting the business growing again.

After a stressful couple of months, the business plan was completed, the loan applied for and thanks to the impressive chart in the plan which showed an upward trend in sales and profitability, the loan was granted, albeit with onerous monthly repayment conditions and the requirement for the inevitable noose-tightening personal guarantee.

On the one hand the loan brought Sam some breathing space but on the other he was more stressed than ever.

Sure, he’d paid off most of his outstanding creditors but how the heck was he going to service the loan repayments?

“Not a problem” said Rudy. “All we need to do is implement the plan. We’ve done the hard yards. You’ve now got a mission statement so you know what your purpose is. And you vision statement gives you a clear sense of long term direction. Also, you’ve now got that great looking wall plague that tells your team what your business values are.”

“Well, ah… yes” said Sam, shifting a little uneasily in his seat “but how is that going to get me the new clients and the sales I need?”

“Whoa, steady on Sam” said Rudy. “Sure we need to get some marketing happening but first we need to make sure your staff Position Descriptions and your supplier agreement are updated. After all, there’s no point in getting new clients in if you’re not well organized in the back room”.

Sam thought a moment.

“Well okay. You’re the expert Rudy and you come highly recommended from Pam so I guess we better get started with the paperwork huh?”

Rudy and Sam worked together for another four months putting Human Resources and supplier systems into place, holding team meetings, recording agreed actions, reviewing the financials (which continued to deteriorate) and creating quality control checklists and documenting other systems.

But after a total of six months of headaches and extra hours, Sam finally had enough.

And at their next meeting he let Rudy have it.

“Rudy I’ve now spent fifteen grand with you and after six months of blood, sweat and the occasional tear, I still don’t have any more clients and not even one additional sale to show for it. It’s like my ship is still sinking and all we’re doing is straightening the proverbial bloody deck chairs!” he protested.

Rudy was ready for this.

Sam wasn’t the first client to express such a concern.

“Hey Sam, relax. You’ve come a long way and now we’re ready to start the marketing. Don’t give up yet, we’re just about there. We’re going to redesign your Yellow Pages advertisement, get you onto Facebook and start your Blog. After all, most marketing is going on-line now and so of course we need to get your website made over as well. Also we need to do a review of your product range, complete a customer satisfaction survey and we should probably hire a research firm to find out what the market place really wants. All that’ll give us a whole lot of valuable information that we can use in our marketing.”

At that point Sam exploded. “Are you freakin’ crazy Rudy? That’s going to cost me a small fortune and it’s gonna take even more months. I’m struggling as it is and if I don’t get new clients in soon I’m going to have to shed some staff or shut the doors.

Rudy, it’s time you left. We’re through.”

Rudy didn’t mind too much. He’d seen this before. And after all, he’d still banked fifteen big ones.

Sure, it was a shame that Sam didn’t ‘get it’. “But I mean, what does he know?” Rudy thought. “I’m the one with the MBA and I’m the one who earned my business coaching diploma with first class distinctions.”

—————-

Unfortunately this sorry story, or variations on its basic theme of wasting money on BS theories that don’t put money into the business account, has been repeated hundreds of thousands of times the world over.

It’s the classic anti-entrepreneurial mistake of putting management ahead of marketing.

Not that management is unimportant, it’s just that there is nothing to management until the marketing is working.

And so that leads us to the moral of Sam’s story which is that it’s effective marketing that makes the difference, not a business plan and not any fluffy stuff such as Visions, Missions or Values statements.

And no matter how exciting they may look, no amount of upwardly trending growth charts or row upon row of increasing dollar amounts will make one fig of difference in your business.

And even if your product or service is terrific and your clients love you, that’s also not the thing that will make or break your business. The history of commerce is littered with millions of businesses that had a product or service that was good enough or even great but that went broke because they didn’t invest enough focus into developing and refining systems that would bring in a steady flow of new clients.

To paraphrase the pragmatic and ever-inspirational Ed Johnson:

“They say that if you build a better mousetrap then the world will beat a path to your door. The hell they will. It’s the marketing that makes the freakin’ difference.”

Summary: once you’ve got a product or service that people like, stop messing with it and forget about management initially. Instead, Make the time to continually grow your “Marketing Muscle” and then flex it every day of the week.

Once you know how to get people buying your stuff, then, and only then, should you start messing with the management side of your business.

How can you build your marketing muscle? Simple… If you want to grow a physical muscle you need to do two things: feed the muscle the right diet and then exercise it.

And it’s the same with growing your Marketing Muscle: feed your mind the right diet of proven marketing ideas and then exercise the muscle by implementing those ideas.

Then, and only then, you may live happily ever after…