PART 2 - THE SOLUTION

In my previous post, I discussed the section of your Executive Summary where you clarify to the investor what problem you are solving in the marketplace. The next critical piece is your Solution. In this section you should be specific but brief about what you are offering and to whom. This section should depict the essence and energy of your business because this is where you sell yourself to investors. Clearly depict your product or service with commonly used terms to state concretely what you have, or what you do, that solves the problem you identified in the previous section. You should avoid using jargon or acronyms that don't mean anything to most people. You may also want to clarify where you fit in the value chain as well as the dynamics of your distribution channels and how you fit in. You should also use this section to be clear about any current customers and revenue channels so you can show you have passed the wallet test.

PART 1 - THE PROBLEM

Is your new product or service a "solution" looking for a "problem?"

If you're trying to raise money from a venture capitalist or angel then you should always pitch your business from the perspective of solving a customer's problem. Don't make the mistake of telling everyone how cool your new widget or new technology is unless you can directly tell the story of how it solves someone's problem. It's the same thing when you're a sales person and you're constantly selling your product or service's "features" instead of its "benefits." A customer doesn't care about the bells and whistles of your widget unless they can see how it will benefit them.

The same concept holds true when putting together your business plan. You have to be crystal clear that your business is solving problems and generating a benefit to a market. Start by explaining why the situation exists in the marketplace and why it is that only now can it be addressed. Use this part of your Executive Summary to explain the market dynamics and the size of the opportunity...briefly.

NEED CAPITAL - GET ATTENTION!

Aside from prayer and/or doing the moondance naked through an investors office there are only a few real-world things you can do to get their attention. Guess what? Without their attention you don't get a check. So, pay attention!

Your business plan is one of the most important tools that you can have to create buzz about your project. The Executive Summary in your plan is often the first and last section that investors will read. If your Summary is positioned and written well then the investor will have lots of questions about your business model. If not, they will most likely show you the exit. Most entrepreneurs make the mistake of making their Executive Summary a description of their business written in operational terms with piles-o-jargon. As Guy Kawasaki puts it, the "Executive Summary is about selling not about describing."

We have had much success using a simple and straight-forward approach that includes 5 key components. Although I can't guarantee that your plan will generate a check, I can tell you that these 5 components will help you position your business for investment and perhaps soon you'll be off changing the world with your new product or service.

In the next 5 blog posts I will define these components:

1. The Problem

2. The Solution

3. The Business Model

4. The Request

5. The Exit

CONNECTING ENTREPRENEURS AND MONEY!

Here is an interesting video from Vator.tv. In this particular episode of Vator Box they are discussing the different websites and organizations that match investors and angels with entrepreneurs and ideas.

See this video on Vator.tv »