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Business Plan Word Choice Counts to Attract the Right Funders

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Business Plan Attract the Right Funders

Each word in a business plan needs to count because they are the means for attracting funders. Most of the time, a business plan is first presented to potential funders without personal introductions to the entrepreneurs. This is especially true for venture capitalists, equity funders and angel investors. You may decide to present your plan in person to a commercial bank loan officer, but being able to locate funding online without regard to geographic location is even making that less and less likely. That leaves written words as the means of introduction for a new business idea, expansion plan or project. The words must be carefully chosen, polished and avoid hype.

Unfortunately, a number of people believe that a business plan should be used like a carnival huckster saying, “Come one…come all!” The plans are full of hype words like “stunning idea”, “exponential growth” and “one of a kind”, in the belief that an “unprecedented” idea would never be rejected.

To be honest, business plan writers using this kind of terminology are resorting to a begging style rather than honest presentation. Bankers, venture capitalists and private investors are sophisticated business people and have read numerous business plans. They recognize hype when they read it because they understand the marketplace, domestic and global business, and financial matters. Funders do not want hype; they want the truth.

Capturing Realism

Entrepreneurs are understandably excited about their business proposal. However, to attract funders, the business plan must be realistic, avoid unsubstantiated claims and reach reasonable conclusions. The words chosen should not appear to make the proposal seem like it is based on naiveté or false assumptions. They need to convey reasoned, sensible, market based approaches to the business idea that investors can be comfortable are realistic.

The key piece of advice is to avoid hype words at all costs. However, the rest of the words need to be assembled so they project the right image of who you are and why investors should risk funding your proposal. The Executive Summary, for example, needs to be well written and the words chosen should grab the reader’s attention. If you cannot get someone’s attention right away, the funders will not read through to the marketing and financial sections.

The Executive Summary should not use words or phrases like: paradigm shift, unparalleled, game changer, guaranteed and next level. These words convey hype and promise and not solid business ideas worthy of being funded. These words do not say anything; they are merely words. For example, what is a paradigm shift or how does the business concept take anything to the next level?

Are You Paying Attention?

A business plan must avoid vagueness and exaggeration throughout the document to even get the attention of funders. Each section, from the Executive Summary to the Operations and Management Plan and the Financial Section, need to be factual, reflect solid competitive analysis and clearly place the business concept within the context of the marketplace. Hype words are for carnivals and not for business plans. Keep that in mind as the business plan is developed, and funders will take your plan seriously.

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