Reasons funders toss away business plans

Working in the space of entrepreneurship and small businesses is fascinating. One comes across many entrepreneurs with ideas and dreams that work out so perfectly in their head but never see the light of day because of a general lack of resolve to execute the idea to its logical end.

In order to convince those with deep pockets for support, entrepreneurs are faced with drafting best business plans and to most this is a major challenge. Recently, a fired up “entrepreneur wanna be” contacted me for advice on his business plan and also requested assistance with linking him to potential funders. After the meeting, I asked a friend of mine in the industry to cast an eye on the business plan and let me know what he thought. His feedback was that there were at least four issues in the presentation that could have been avoided. These needed to be rectified before we could discuss the content of the plan itself. Some of the issues were:

1. POOR LOOK AND FEEL

• Many entrepreneurs take the look and feel of their business plan presentation for granted. Unfortunately, it is true that the first impression lasts longer and even so in the world of business. • Business people want to be associated with excellence and quite often before an entrepreneur has a chance to present his concept face to face, it is their document that does the talking on their behalf. The poor the look and feel, the more chances you have to receive no response further than an acknowledgement of your email.

2. SUMMARY NOT INVITING

• People whose work is to read business plans, over time develop the art of knowing which one to read through for more information. • A decision to read the entire business plan is made on the basis of the quality of the summary the entrepreneur has put together.

The way many decide on what movies to watch is the same way funders decide on what plan to read; it is often on the basis of the 60 seconds’ promo advert, in this case, the summary. • As an entrepreneur putting a business plan together, make sure that your summary is compelling and inviting.

3. SPELLING MISTAKES

• One typo here or there might not be too annoying to others but very few people can handle a plethora of grammatical errors and badly constructed sentences. • The typos communicate a lack of thoroughness and attention to detail thus cast doubt for consideration. • While reading your business plan, the potential funder might be thinking about why they should risk their money on a lazy person. Rather let that review be given to another person’s business plan and not yours.

The one thing that irritates the funders is them identifying obvious loopholes that the entrepreneur should have addressed earlier on in their business plan. It is a serious turnoff because it wastes their valuable time.

4. MISSING OBVIOUS AND LOGICAL RATIONALE

• Funders skim through the plans at a high level without applying themselves too much.

You can say it is like a bed time reading assuming that the reviewer has nothing more interesting to read. • The one thing that irritates funders is them identifying obvious loopholes that the entrepreneur should have addressed earlier on in their business plan. It is a serious turnoff because it wastes their valuable time. • Every time spent on a terribly crafted business plan is an opportunity cost to the funder. Before submitting your business plan, ask someone to critic it and check for obvious and logical rationale that might not have been addressed. • This will help you not to spoil your reviewer’s bedtime reading and encourage them to put your business plan on his or her list of priorities.

In the next articles, I will be sharing thoughts on what you need, to put a winning business plan together. In the meantime, make sure that your business plan is presentable, exude excellence and is devoid of avoidable errors. 

Champ Thekiso CA(SA)

Founder and Executive Director of Thekvest Group (Pty) Ltd. Thekvest focuses on investments and advisory services to foster economic inclusion.