Do Business Well

2. Investors. Investors are most interested in factors that can help predict growth, because growth is essential for them to get an attractive return on their investment. These factors include the market’s likely future, the management team’s experience, evidence of fast-growing sales, and so forth. They want to see their investment go into marketing rather than R&D expenses. The existence of tangible assets is less important to investors because they aren’t as concerned with being “repaid” in the same way. But investors do want to see a concise plan—preferably 40 pages or less.

3. Strategic partners. Increasingly, smaller growing companies are seeking out large corporations to provide expansion resources—mainly in the form of investment funds, distribution outlets, and production expertise. Corporate executives have their own agenda. They are most interested in finding new products and/or services that can be integrated into the corporation’s existing offerings. Corporate executives also want to secure rights to proprietary products or processes and to emerging technologies. And it helps if the management team has had corporate experience. Such issues as cash flow and sales-force planning are less important because corporations figure they can compensate for these needs. The business plan should be concise but devote significant detail to the strategic issues of importance to the corporate partner.

4. Large customers. These tend to be major corporations seeking long-term and significant purchasing relationships. The customers want evidence that a smaller company is going to be around to provide not only the product and/or service promised but also warranty or maintenance service.

For these readers, the business plan should emphasize the company’s past record of performance and ability to satisfy customers. “Love letters” and names of reference accounts can be especially helpful.

5. Key employees. More than any other single group, potential key employees are looking for reassurance on a variety of issues. They want to know that the company has a history of success and that it can achieve substantial growth in the future. In other words, potential key employees are looking for signs of both security and opportunity, especially if they are going to be getting stock in the company. A business plan that satisfies one of the previously described audiences may well be appropriate for these individuals.

Existing key employees, as noted earlier, want as much detail as possible about the company’s plans so that they can determine their individual roles. The more guidance you give them, the more comfortable they will feel.

6. Management team. A business plan intended to guide your company’s middle- and upper-level managers usually needs to be more detailed than other plans. As noted in describing the Celestial Seasonings and Pizza Hut plans in Chapters 2 and 3, the managers using the plan want detailed guidance to fulfill the plan’s objectives. A plan of 60 pages or more isn’t unusual.

7. Merger and acquisition candidates. A company looking to acquire your company is primarily interested in its past and present record of growth and accomplishment. If the acquiring company’s executives can be excited about the past and present, they will figure that they can provide input that will solidify the future. Moreover, it’s the past record of sales and profits that help determine the company’s value. A business plan similar to that submitted to a bank would be useful in this situation.

If your company is doing the acquiring, then the owners of the company you are seeking to buy will want similar data showing that your company has a record of sound accomplishment and seasoned management. In addition, they will want to know as much as possible about the management team of the acquiring company and how it has digested its previous acquisitions.

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Targeting Your Plan continue…

• Targeting Your Plan
• Making a Plan: how to construct a simple and workable business plan part 6
• How Your Business Situation Helps Shape Your Plan
• Previewing the Business Plan: The Best Type for You
• Campaign Checklist: What goes in a campaign brief?
• How Will You Promote Your Product or Service?
• Ask Yourself: Would You Invest?
• Personally Presenting the Plan
• Packaging Issues
• What All Plans Must Cover

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