19 Questions to Supercharge Your Business Plan

by Paul Lemberg

Published on this site: March 18th, 2006 - See more articles from this month

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 special supplier.
   
   
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 investors.
   
   
6. Is your market in "early momentum" - the market growth phase
   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 large
   
   
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 interest 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 development.
    
    
11. Is there wide appeal for your product or service? (y/n) Are 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 distributors?
    
    
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 marketing, sales, finance, and the product/service area itself. Of course, 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 investors;
   
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 the 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 you 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 financial assumptions?
    
    
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 in your existing business, and to make it easier to spot potential problems while you are just starting out, I've created the Discover Hidden Value Business Building Guide. A remarkable aid 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.



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
http://www.fastergrowthnow.com