Business Plan Writing Tips

Why Business Startups Need Investors With Reputation Capital

admin — Tue, 01 Feb 2011 12:02:00 +0000

What’s the difference between cash and investment? Let’s say you finished your Business Plan, checked the Business Case, and got the Marketing Plan ready. What comes next? For most startups it’s the need to take the business concept and make it a reality – you need money! Otherwise you can’t move from business plans to business planning.

Why Business Startups Need Investors With Reputation Capital

When you started the focus was on

Writing a Business Plan that showed how the product/service works.
Developing the Business Case and looking for gaps.
Creating a Marketing Plan that identified target markets and opportunities.

…and then you need to start getting, finance?

The mistake is thinking that all money is equal. And it is. Sometimes.

So, where do you go to get the investment? Or, to be more accurate, who has the cash you need? The biggest mistake startups make is choosing the first person who offers them money and not waiting for a more influential investor, someone who benefits their business other areas besides generating cashflow.

Think about it. The dollar bills in your wallet are all the same when you go to buy gas. And no shop owner will turn you down when you peel out a hundred dollar bill.

From a transactional level, it’s all the same.
From an investment level, it’s very different.

How come?

The difference is confusing cash with investment.

Cash is what you get from the ATM.

Investment is what you get to ‘build’ your business.

And building a business takes more than cash as we’re going to see next.

FYI – sometimes investment is not cash or capital outlay, but that’s for another post.

Three Types of Investors With Different Reputation Capital

The three classic avenues for getting funding as family, friends, and investors:

Family – This is fine for small investments. Your family may give you money as a gift and don’t really expect returns, at least not immediately.
Friends – May have more business experience, especially if you work on a project that relates to your business but things can become problematic when the boundary of friendship and investor gets blurred. Wearing two hats can be uncomfortable.
Investors – This is where we go when we’ve exhausted other possibilities and, if the project is significant, where you should go as you need more funding that your friends and family are likely to offer.

You can see what’s coming next, can’t you?

In the movie The Social Network, one of the pivotal moments is when the founders of Facebook realize that their cashflow is running out and they need to find investors who can continue to keep the business afloat AND also open doors to larger opportunities.

This leads us examining the type of investor you choose.

Five Ways To Choose the Right Investor

Let’s stop a moment and look at recruitment. Imagine you’re hiring someone for your new business. Do you want someone who:

Wants a job to pay the bills
Has a great track record in your industry but is really a 9-5er or someone
Is passionate about your line of business, matches your core values, and has serious contacts

You’re probably going to choose the third.

Why?

Because they’re more than an employee. They will help you through the hard times, come up with creative solutions, and contribute to the business on different levels.

And this also relates to your choice of investor.

When you choose an investor, you’re looking at:

Influence – Can this investor open doors for me? How can this person help the business expand? Do they have connections overseas, in Asia, in the government?
Endorsements – If this person invests in my business, others are more likely to invest as they trust his/her judgment.
Patience – You don’t want a nag calling you at all hours looking for status updates. An investor committed to the long haul will let you get on with the work and stay out of your hair.
Status – Some investors create publicity and buzz on account of their public profile. Giving a small percentage to a high-profile figure in return for the publicity may be worth it, especially if you plan to dilute the shares at a later date.
Strategic – If your investor is well connected, they can accelerate your business development by recommending your product to other parties. Connections in government agencies can be very effective in this respect.

When you see it from this angle, the cash injection is one part of the equation for startups. It’s the other factors that investors bring that you need to gauge.

How the Right Investor Develops Your Business Plan

Now that we understand that there are different types of money, what’s the smartest way to use their connections, status and influence?

For example, investors with ‘reputation capital’.

Investors with ‘reputation capital’ help you in the following ways:

Connections – This investor can make strategic introductions for you. From this angle, you’re buying into their network in exchange for a part of your business. Likewise you get access to their Address Book, something you’re unlikely to get before you meet them.
Credibility – When you’re starting out, you’re nobody. But a partner with ‘reputation capital’ has the status you need. Their credibility gives you credibility by association. The fact that you’re formal business partners will open more doors for you.
Direction – Seasoned business-people know when to step back (and let you work) and when to intervene when you’re losing direction. For example, Facebook brought Bill Gates and Warren Buffet onboard. Their experience in business negotiations, mergers, and leadership will all contribute to Facebook’s strategic direction.
Global Scope – In additional to local connections, seasoned business people will have overseas experience. This accelerates the process of opening offices in different countries and may also smooth red tape or at least show you the mistakes to avoid when partnering in foreign countries.
Leadership – No one knows it all. And while you may a great business plan, your investment partners will shape the future of your business in ways you hadn’t thought of.

Difference Between Cash and Investment is…

The ideal business partner will help you develop your product AFTER you’ve launched it as they’ve been through this process before and know what comes next.

If you’ve developed a product from scratch, your focus is on the product development, writing the business plan, and developing a marketing plan. And that’s more than enough for one human being.

So, when you go looking for investment, especially when you’re short of cash, it’s tempting to accept the first investment offer without thinking it through.

Look at your investors and determine who bring the most to your company… in terms of influence, experience, and connections.

Alex Baldwin’s 14 Ways To Improve Your Business Plan

admin — Thu, 25 Nov 2010 06:25:00 +0000

‘Always be closing’, Alex Baldwin in GlenGarry Glen Ross.

Don’t know about you but I didn’t like business writing when I started out. It took forever to write white papers, data sheets, and other sales materials. One of the reasons was that it was ‘assumed’ the customer preferred lengthy documents that covered all aspects of the product/service we were offering. How wrong we all were. Sure, it had it’s place but not all documents had to be long. And it’s the same with your Business Plan. It doesn’t have to be fifty of sixty pages. If you can get it under twenty – and keep the material focused – then do it.

14 Ways To Improve Your Business Plan

This brings us onto my buddy Alec Baldwin. Here are fourteen ways to improve your next Business Plan, Proposal, or White Paper as inspired by Alex Baldwin’s slightly nasty character in GlenGarry Glen Ross. If you haven’t seen the movie, get it! He’s a monster salesman trying to motivate his sales team on a rain-drenched night. They only have a few leads left. He uses every motivational technique (youtube video link) he can. Encouragement. Sympathy. Anger. Insults. Abuse. Lots of abuse, actually. Some make it, others don’t…

In Sales, Always Be Closing

Always be closing. What he means is, look at the prospect real hard, understand their problem, see where, how and when you can warm them up, generate some interest, move them onto the right path, and then make the sale. The best salesmen don’t make it feel like a sale. They turn the situation around. The prospect wants them to accept their money. How does this apply to your business documents?

Business Documents Are Sales Documents, Right?

Business documents as sales documents. Not everyone sees it like that. Well, at least not at first. The purpose of every business document is to move the prospect closer to a sale, transaction, or some other form of commitment.

Every sentence, table, and image should be pushing the prospect towards the finishing line.

‘Always be closing.’

Ok, maybe not today, but at some distant point, you want them to open their wallet otherwise you won’t stay in business too long. So, where do we start?

14 Tips on Better Business Plan Writing

Let’s look at style, format, writing and length:

Write it last - When writing business plans, business proposals, grants or case studies, write the main document first, and then Executive Summary last. Some prefer to write it first and get it out of the way. That’s why I don’t. It’s too important to rush through.
Introduction – The Executive Summary is not the Introduction. It’s a high-level document that should be able to stand apart from the main document.
Always be closing – while this is a business document, add some sales pixie dust to your text. Every sentence should push the prospect towards making the sale.
Preface – The Executive Summary is not a preface. Same as above.
One Pager – The Executive Summary is your Business Plan reduced to one page. Remember the idea of an advert for your business plan. Think of it in those terms.
Abstract – The Executive Summary is not an abstract of your business plan, proposal or grant. It’s the ‘ad’ for your business plan. It say, ‘Hey read me, I’m interesting. Want to know more, read on!’
Standalone – Investors and prospective customers should be able to read it by itself and understand your business proposition instantly. Write it as a standalone document and you can’t go wrong. Don’t fudge the key points. Every sentence should push the prospect towards wanting to know more. Generate interest.
Call to Action – Every line should encourage the prospect to move towards taking action. After reading it, they should be prompted to take action, for example, call your Sales team, get more information about your product, sign up for a newsletter, download a trial product, or request more information about your product line. What’s the one thing you want them to do after reading the exec summary?
Short – Investors, Customers, Journalists and Business Bloggers should be able to read it in less than five minutes. If you can’t write in less than 300 words, then print it out, review it, and start again.
Focus – While the Business Plan proper may discuss several areas, focus on the key points. Don’t cover too much. Grab the reader’s attention and make sure they want to turn the page and read more…
Prioritize the key points – Write your business plan so that the most important points are introduced first. Don’t relegate or bury important points down the first page. Place them in the first or second paragraphs. This is where you hook the reader’s attention. Make sure the most interesting parts of your document are introduced first.
Framework for main document – if you do write the Executive Summary first, and maybe this suits your own writing style, then use it as a launch pad or cornerstone for the rest of the document. Many business writers prefer this approach. Otherwise write the maintenance chapters first, digest the material, and then write the Executive Summary based on what you’ve read.
Grab attention – Your Executive Summary shouldn’t be boring. Read what you wrote. Does it excite you? If not, how you can make it more interesting, more engaging, more intriguing. Don’t go overboard but look at little ways to draw the reader in. See if you can add a personal story or human interest element that will interest the reader.
I’m a Big Deal! - You might be forgiven for thinking that all business writing was meant to be dry. It’s not. Look at best-selling business writers like Chris Brogan. Their style is personal, immediate and factual. It engages you; you want to read more. No-one’s forcing you. Look at how Neil Patel does it on Quick Sprout. He’s a big deal, y’know. Investors read hundreds of business plans every year. They make snap decisions based on the opening pages. Make sure your opening generate enough interest to whet their appetite.

Conclusion

One of the strange things about writing business documents for a living is that the older I get, the less I write. I don’t mean I do less work, rather the word count goes down. I think this is partly due to the education system whereby long documents are seen and valued more than pithy and sharp summaries. Maybe that’s changed. The mentality longer is better runs deep and for novice business writers it can be hard to resist the temptation to keep typing.

What do you think?

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also runs the popular Business Planning Blog at http://www.ivanwalsh.com. Follow him on Twitter at http://twitter.com/ivanwalsh

Ernest Hemingway’s Checklist For Better Business Writing

admin — Wed, 27 Oct 2010 06:54:00 +0000

One of tricks that Hemingway plays on the reader is that while the prose is ‘ordinary’, you can’t help but keep reading on and on and on… It looks simple until you try it. Look at how he does it. His writing style is crisp, direct and engaging. All the signs of a great writer. Look at how he makes long sentences short, mundane subjects interesting, and clips along at a nice pace. And without ever losing the thread. Us business writers can use these techniques to improve business plans, proposals, white papers and case studies. Let’s get started.

10 Step Guide to persuasive Writing

Here are some ways to improve your business documents:

Highlight the Benefits to the Reader – Write from the reader’s perspective. Instead of writing about you and your products, turn it around and show the reader what’s in it for them. How does this proposal solve the company’s financial problems? How does this email keep the project on track? How does this procedure simplify complicated business processes?
Give the reader a compelling reason to open your email, read it through, and then take action. We’re all the same. When you get a business proposal, you’re first reaction is, "What’s in it for me?" It is your job as a writer to tailor the material so that it answers these questions.
Write at Appropriate Level – Match your writing style and choice of words to your audience. Do not use complex terms or jargon that the reader will not understand. Likewise, do not use simple terms or use poor examples if the reader is capable of understanding your material. They’ll assume you’re being condescending or patronizing them. Get the tone right and go from there.
How to Structure Paragraphs #1 – Business letters are not read the same way as articles, reports, or books. Usually, they are read by people in a hurry. Business people looking for answers. Quickly. Structure your material so that it’s easy for the reader to find the answers to these questions. Don’t make them dig it out. Use short paragraphs, lots of information rich headings, bullet points and useful summaries.
How to Structure Paragraphs #2- Fine-tune each paragraph for purpose, content, and function. If you have a paragraph that cover more than one idea, consider dividing it into two or more paragraphs. Likewise, if two paragraphs cover the same ground, merge them into one.
Be Specific – don’t mix two ideas in the same paragraph. Make it easy for the reader by giving each topic its own paragraph. Use language that describe your ideas correctly and highlights the relative importance of each concept.
Understand Relative Importance – Use phrases such as "most important," "major," or "primary" when discussing business concepts you want to emphasize. Use phrases such as "a minor point to consider" or "least important" to introduce ideas of less importance.
List Key Points – Use verb-leading lists whenever possible. These are lists that start with a strong action verb. Lists also help the reader identify the important points and get a feel for the material with a quick scan.
Prioritize Information – Consider how you introduce and position important information. Remember, content at the start and end of the paragraph tend to be read first. People scan documents. Critical business information buried in the middle of long paragraphs is easily overlooked. Knowing this, put important information in high-visibility points.
Get the Tone Right – Consider the tone and word choice when writing negative or critical communications. For example, in a ‘negative’ project assessment email, you can thank the team member for reader for their input or involvement but state that you cannot comply with their wishes. Then follow this response with your explanation.

Business writing is not difficult but…

Business writing is not difficult. What makes it hard is that the way we approach it defeats our purpose. Your goal as a business writer, oddly enough, is to write less.

Why?

Because every time you write something, you goal should be to push it towards completion. Write your emails so that your team knows what to do next and don’t come back looking for clarification. Write your status report so that your Project Manager know the risks and issues and doesn’t reply looking for more information.

PS – do you have a favorite book by Hemingway?

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also writes on the Business Plan Blog at http://www.ivanwalsh.com

Business Case Checklist: 15 Things to Remember

admin — Wed, 20 Oct 2010 06:54:00 +0000

Over the past few weeks we’ve looked at how to write business proposals (and business plans) to generate new business opportunities. One way to succeed in this area is to understand how the ‘Business Case’ is generated within an organization (as this is often written before the actual RFP is sent out) and the type of concerns the business analysts have when writing Business Cases.

Business Case Checklist

The second point to consider it that if your relationship with the client is sound, you can help them address the salient points in the business case, for example, if they approach you with a ‘rough idea’ of what they want. Business Cases can be seen as ways to ‘test the water’ from a financial perspective and see if the core concept is worth investing in.

Business Case Template

What is a Business Case?

The Business Case outlines the benefits, competitive edge, and other gains the company stands to make if it invests in this project. For certain projects, the Business Case is a fore-runner for a Request For Proposal (aka Invitation To Tender) where business proposals are accepted from external firms.

Over the coming weeks, we’ll look at how to write, review and assess business proposals. For now, let’s focus developing the Business Case.

I’ve put together this Business Case checklist which covers most all areas related to the project/service you are exploring. This checklist should help you address areas such as Achievability, Benefits, Costs, Critical success factors, Resources, Risks, Scope, Strategic fit, and Value For Money.

Business Case Checklist

To ensure that your business case is complete, examine the following points:

Achievability — this ensures that you (and other parties) have the experience, expertise, and resources to manage the project. Examine different approaches that can overcome any potential obstacles, e.g. additional resources, timelines, or budgets.
Assumptions — speak to all stakeholders and gather their main assumptions, e.g. in the case of outsourcing IT development, that the Intellectual Property Rights will be owned by your organization. Examine whether these assumptions are valid or not.
Benefits — outline the benefits, and opportunities, that each option provides. Identify the high-level benefits that align with your company’s main business objectives, and explore how these benefits can be measured
Costs — obtain indicative figures for the cost of the project over its entire lifecycle, not only the implementation costs. You may want to factor in 15-20% for scope creep, if appropriate. Also, determine who will pay for the project, if they have agreed to do this, and the payment method. Examine how to get an acceptable balance of cost, benefit, and risk.
Critical success factors — seek consensus with the other stakeholders on what constitutes success. If you do not take this step, stakeholder will have different expectations of the final deliverable. Define success factors that are specific, measurable, and achievable; identify any other factors that could affect success, such as the delivery of other parallel projects.
Dependencies — outline the internal (e.g. staff availability) and external dependencies (changes in the marketplace, new government legislation).
Options – gather details on all available options that could meet the business needs. Consider the trade-offs associated with each option, and the degree to which each option meets the project’s needs. Make sure that you have included the overall supply chain’s needs, i.e. the organization, partners, suppliers, staff and customers.
Procurement — send an Invitation to Tender (ITT) to prospective contractors. Evaluate their bids. Hold presentations with the most impressive bids.
Project Group — identify those (individuals, units, and departments) who are involved and/or affected by the project. Determine their interests and endeavor to resolve any potential conflicts.
Resources — scope the anticipated resource and capabilities requirements that you will need, such as staff, IT, workspace, equipment, and funding.
Risks – Capture all anticipated risks – plan contingences. Prepare a high-level estimate of the costs for each risk.
Scope – define what is in/out of scope with the existing budget; scope what can be delivered with a reduced budget, with indicative delivery dates; ensure that there are no conflicts with other on-going projects. Look at the impact that delaying the project or under-delivering could have.
Stakeholders — identify their role, responsibility, availability, and contingencies if they become incapacitated/released from the project.
Strategic fit – confirm that the project is still required and that its objectives are in line with the company’s business goals.
Value For Money — examine how to get Value For Money from the contractors, contractors and other third parties. Agree what constitutes VFM with the project stakeholders.

Once you have checked off these points, your business case should be ready to send to the project stakeholders.

What are your thoughts? What have I missed?

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also runs the popular Business Planning Blog at http://www.ivanwalsh.com. Follow him on Twitter @ivanwalsh

PS: The Business Case Template is here.

Ultimate Guide to Business Process Design

admin — Wed, 13 Oct 2010 10:39:00 +0000

Post by Ivan Walsh. Follow me on Twitter.

At the end of the workshop, our client confessed, ‘I didn’t know our business worked like that’.

We’d come onsite and over three months mapped out the processes in his Finance, Sales and Operations Depts. For me, one of the most rewarding aspects of Business Analysis is discovering how a business works and then mapping it out in Visio.

Business Process Template – MS Word

Definition: What is a Business Process?

We write the process narratives in Word. In simple terms, business process design is a way of gathering related, structured activities (tasks) that serve a particular goal, usually for customer though it can also be for an IT system. The best way I’ve found to capture the business process is in flowcharts, which show the sequence of activities and where each task inter-relates.

I’ve learnt so much how business models work by taking a business apart, process by process, and seeing where it’s working best and where it needs some fine-tuning.

One definition of a business process is that it’s a ‘set of coordinated tasks and activities that will lead to accomplishing a specific organizational goal’ TechTarget’s Definition of Business Process. In addition, business process management (BPM) is a systematic approach to improving those processes.
The Business Process Management Initiative (BPMI) promotes the standardization of common business processes, as a means of furthering e-business and business-to-business (B2B) development. To realize end, it developed the Business Process Modeling Language (BPML), an Extensible Markup Language (XML)-based meta-language for modeling business processes.
A business process diagram let’s you illustrate activities that are designed to produce specific outputs. For example, if you worked for a bank, you might have a Credit Card application process.That shows what the customer needs to give in, what happens when the application is received, and what results are expected. The customer gets a new credit card or is rejected. You need to design processes for each these scenarios.

Visio Business Process templates

Business Process Example

Let’s look at an example of creating a process flow diagram for a Credit Card application. Like we said, business processes show how to capture (record) the order in which activities occur.

For example.

Customer applies for credit card on the bank site
Or
Customer applies for credit card in the branch
Or
Customer applies for credit card at promotional event
Then
The credit card application is received electronically, but the email is wrong (separate process flow)
The credit card application is received at main office, but address is missing (separate process flow)
The credit card application is received at branch office who send it to head office (separate process flow) Then
The customer gets a new credit card in the post
The customer is offered a new credit card but has to come into the branch (with ID) to pick it up
The customer is offered a new credit card but it send to the wrong address (printing error)
Or
The customer is rejected online.
The customer is rejected at branch.
The customer is rejected at sub-branch.

All of these scenarios need to be mapped correctly and, if necessary, form part of a new process. For example, the credit card rejection process. As a Business Analyst, you need to design business processes for each these scenarios.

Business Process Analysis

A process must have a start, inputs (documents or information) and outputs (reports/forms/results). At its most simple level, every process has a:

Start – what triggers the process into action? I want a credit card.
Middle – what goes on in the process? The different steps, including variations, business rules, and possible exceptions.
End – what conditions are necessary to close the process? I got my plastic friend. Woohoo!

Business process modeling involves designing processes that add value by showing the transformation of inputs into useful outputs.

What inputs go into the Business Process?

Inputs are whatever enters something into the process, for example, the customer (a human resource) submits a credit card application. In another process, a HR system (equipment) may submit a report to anther IT system, maybe the SAP or Oracle databases. Inputs can be resources (people), materials, energy, and equipment (software).

In UML, a resource is an input to a business process and is consumed during the processing. For example, as each daily train service is run, the service resource is ‘used up’ as far as the process of recording actual train times is concerned. When mapping business processes, an Input link indicates that the resource is consumed in the processing procedure. For example, when customer orders are processed they are signed off and used only once per order.

What are Business Process Analysis outputs?

Outputs are the result, the end product, in the business cycle. Outputs may be a physical product (possibly used as an input to another process) or a service. Outputs are whatever is produced as a result of this action. While this seems obvious, remember that in complexes there may be two or more outputs. You need to decide which is the main output and relegate other outputs to sub-processes. More on sub-processes later.

As a Business Analyst, this means that in the credit card application, the outputs will be the Acceptance of the Credit Card request or a Rejection of the request. When designing the process map, make sure you cover all scenarios so the process flow and all intermediate activities are mapped.

Conclusion

A business process will typically produce one or more outputs to the business, either for internal use of to satisfy external requirements. Outputs may be a physical object (such as a report), a transformation of raw resources into a new arrangement (a daily schedule) or a business result such as completing a customer order.

Remember, business process A’s output may feed into business processes B, either as a requested item or a trigger to start new activities.

Next week, I’ll look at how to use Business Process design techniques for large Software Development projects. You might want to read this if you’re looking at ways to improve your department’s performance, outsource projects, or to improve your knowledge of process design.

Do you enjoy process design or designing flowcharts? Please share your thoughts or lessons learnt below.

About the Author: Ivan Walsh is a contributing editor to the Klariti Small Business Centre. Ivan also shares Business Plan Ideas for SMEs on his business blog. Follow him on Twitter

How to Write a Better Executive Summary for your Business Plan

admin — Wed, 13 Oct 2010 02:30:00 +0000

I help clients assess Business Plans. Part of this is checking that the numbers add up but also to see if the project in question is worth investing in. How do we know that from a fifty page document? We don’t always know, of course. But, we can make certain deductions just by looking at the first ten pages. Or even the first five. To be honest, the Executive Summary is the first hurdle you need to master if you want to get investment. Let’s look at how to do it right.

Business Plan – Executive Summary

Executive Summary Checklist

Like we said above, first impressions count. For this reason, you need to pay special attention to the Executive Summary. If your clients or investors don’t get past the Executive Summary, then the rest of your document will go unread.

This also raises the question: Should you write your Executive Summary before or after you’ve written your Business Plan? Some business writers prefer to do it first, others write it after the entire document is completed. I write it at the end as I want the complete text before me. That way, I can digest the document and write the Executive Summary based on what I’ve read.

The following is one suggested approach for an Executive Summary. Change this to suit your needs. In the Executive Summary, include the following:

Introduction

Brief description of your product or service
Identify when, where, and how the company was established
Provide the current status, including funding, of your organization

Problem Definition

What problem does the solution solve?
How important is it to users over the next [x] years?
What is the business and/or technical road map?
Who are the customers and their needs?

Market Opportunity

What is the market size?
What is the timing of market development?
What are the key market drivers?
What are the inter-dependencies of this market to other markets, businesses or the government?
What are the supply and distribution channels?
Has the market been validated by a customer / partner?
What is the marketing and sales strategy?

Competitive Analysis

Who are your competitors?
What are your advantages and the competitive products/services?
What business models have been successful?

Management Team

Who are the key management personnel? Cross-reference to Appendix if necessary.
What is their track-record?
How will you complete the management team if all the key members are not yet identified?

Technology

How unique is the technology?
Can any parts be patented?
What is the current development status of product/service?
How will the products be tested?

Financial Analysis

Summarize projections for revenue, cost and return on investment
Describe funding required to achieve the next milestones

Conclusions and final writing tips

While this looks like a lot of work, the key is to select the parts that you want to highlight in the Executive Summary and move the rest to the main document.

Most Executive Summaries are one to two pages max.

With this is mind, write the text and get all the information down first. Then revise the material and see where you can refine the wording to reduce the word count, for example, by merging points together and remove filler text. Also, look for phrases that can be pruned and made shorter. For example?

Instead of

In the event of

Write

If

Instead of

We have come to the conclusion that

Write

We decided

Instead of

The purpose of this document is to

Write

This document… (The purpose of is redundant)

Look for ways to remove these fillers. You’ll sharpen the prose in the process and give your document a nice, polished tone.

What have I missed?

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also runs the popular Business Planning Blog at http://www.ivanwalsh.com. Follow him on Twitter at ivanwalsh.

PS: You can get the Business Plan Template from our partner Klariti.com here.

Nine Step Guide To Better Business English

admin — Wed, 15 Sep 2010 11:43:00 +0000

Warren Buffet’s Annual Reports were the first annual reports I ever read. To this day, I go back and re-read them to remind myself what business writing is really about – making a connection with words. That’s it. The more you can connect, the more people will read you. They may not agree with you – more on that later – but they will read what you have to say.

‘Price is what you pay. Value is what you get.’ Warren Buffett

Warren Buffet is from Omaha. Not sophisticated LA or cosmopolitan New York. Saying their simple folk is a bit patronizing. Rather they saw things as they see them. His Annual Reports are a joy to read. Most mainstream annual reports are like sedatives. You read a page or two and then the zzzzs.

Warren Buffet’s Nine Steps To Effective Business English

What’s this got to do with business writing? Well, if customers don’t understand what you’re selling, they won’t buy. If employees don’t understand your principles, they won’t follow. If you don’t understand your own vision, you can’t lead.

Writing is a process of clarification. We edit to make things clearer. Let’s start at the top.

Customer Focus – it sounds obvious but… write the letter so that it addresses ‘their’ needs, not yours. It’s easy to get caught up when under pressure to sell or promote your ideas but, step back, and look at this letter from the customer’s perspective. Put yourself in their shoes. What’s their impression of your letter?
Facts – likewise, stick to what you know. Don’t make up facts, figures, amounts, dates or other numbers to impress the reader. You’ll look very foolish when these are seen as ‘mis-informaton’. We all know what that word really means? Avoid saying, "I feel that". Rather use "I believe that" or "I think that" and then explain why you believe this to be true.
Include Technical and Legal Document As Attachments – if you need to refer to technical documentation or other such material, don’t insert it in the document, rather cross-reference in the Appendix. For printed material, print out the material and include it in a binder. This also applies to sales collateral, such as case studies and white papers.
Jargon – write in a professional tone, avoiding slang, jargon and acronyms. Few things annoy me more than unexplained acronyms appearing in the middle of a case study. Am I supposed to know what this means? If I don’t, I feel a bit stupid. Is that what the writer meant?
One Page Max – train yourself to keep business communication under one page. You can do this by compressing the main points together and using lists to break out the key points. If the document needs to be more than a page, then consider calling the person or arranging a meeting. Also, if it’s more than a page, it’s unlikely that the customer, employee, or colleague will respond to all the points.
Proof the letter – for business critical information pay special attention to the financial data. You can be forgiven for the occasional grammar or spelling mistake, but you won’t be forgiven if the numbers are wrong. Check these more than once. Where possible, get a colleague to check them also.
See The Big Picture – have the overview in mind before you start. Don’t start writing your next business plan when it’s still half cooked in your brain. Think it through first and then start writing.
Short Words – don’t write ‘utilize’ when ‘use’ will do. Don’t procure meat products when you mean get a sandwich. Use simple everyday words. There are no Nobel prizes for emails. Use direct, immediate language that describes the main topic. If you go over a page, the reader may leave it to later… and never get to read it. So, if shorter letters have a better chance of getting read, then use this approach.
Structure Your Letter – Before writing your business letter, make a list of the key points you need to cover. Prioritize them. For example, as prospective clients are more likely to read the first two or three bullet points, highlight these to convey their importance. Then work through the other points.

Conclusion

What I’ve learned from Buffet is that annual reports, proposals and other business documents can be written is a simple, easy-to-read format. They don’t have (and shouldn’t) intimidate the reader. Or bore them.

The next time your boss says the Annual Report needs to be more ‘serious’ and more professional, hand them a copy of Buffet’s letter and see what they think.

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also runs the Business Plan Consultant Blog at www.IvanWalsh.com

PS: The Business Plan Template is here

PPS: Another great read from Buffet is this Plain English Guide He wrote the Foreword for the SEC.

How to Write Headlines, Summaries and Abstracts That Get Remembered

admin — Tue, 14 Sep 2010 07:18:00 +0000

This article is about writing headlines, summaries and abstracts. Before we start, what is an Abstract?

Philip Koopman, at Carnegie Mellon University, reminds us that, “Writing an efficient abstract is hard work, but will repay you with increased impact on the world by enticing people to read your publications. Make sure that all the components of a good abstract are included in the next one you write.”

Photo Credit Pjern

Why We read Abstracts and Summaries?

When you open your inbox every Monday morning and see a stream of emails crying for attention. Which do you choose? I’d guess it’s the ones with the snappiest headlines, like these:

Zen and the Art of Remarkable Blogging
A Simple Four-Step Strategy for Developing Content That Connects
The Benjamin Franklin Guide to Marketing Your Business Online
Five Common Headline Mistakes and How to Avoid Them
Become a Master of Metaphor and Multiply Your Blogging Effectiveness
Metaphor, Simile and Analogy: What’s the Difference?

These are from CopyBlogger .com and show how smart headlines can tickle your fancy. So, when you read, ‘Are You Leaving Your Readers Out of the Conversation?’ you can’t help but start to answer the question in your mind. And when you do that, you open the article and start to read.

So, good headlines act like hooks bringing you into the story.

Abstracts are also important. We have an ever-increasing need for quick access to information we rely on abstracts and summaries to provide a snapshot of what’s in the article.

If you visualize it as a pyramid, on the top is headlines, then summaries, and then the body of the article. You can see how one leads to the other.

How To Write An Abstract

You have two options. Write it before you start on the main document or after you’ve finished writing, take a break and explore:

What is the main subject in this article?
What conclusion has the writer made?
What message does the writer want to convey?
What do you want the reader to do after reading the document?

Analyze this and define it in one sentence – this is your ‘topic’ sentence.

Write one topic sentence that covers the entire document, regardless of whether the document is a five page letter or a hundred page annual report.

1. Getting Ideas

Then, look at the recommendations, conclusions, summaries, and results in the final document. When abstracting a technical manual, look at the tutorials and see if these help form the topic sentence.

2. Don’t Use the Document’s Title

Avoid using the formal name of the document as this can be misleading and may not help you write the topic sentence. Chances are the ‘working title’ will be too vague. Parts of the title might serve as modifiers in your topic sentence, but you’ll probably need to go beyond the title.

3. Be Specific

Make the topic sentence as specific as possible.

Avoid writing

"This report describes [document title]."

Instead, write something like

"The results of this [subject] study show that [result]."

4. Use Supporting Sentences

After you identify your topic sentence, write supporting sentences. Make each of these supply specific details about the ideas in the topic sentence. Think of what supports the topic sentence.

Who?
What?
Where?
When?
Why?
How? and
How much?

Give statistics, results, conclusions, or recommendations that back up the topic sentence. Only use two or three major supporting ideas. Include the less important evidence as subordinate clauses and modifiers.

5. Use Transitions

Arrange the supporting sentences in a logical sequence after the topic sentence. Add whatever transition is needed to connect the supporting sentences to the topic sentence and to connect ideas within the sentences to each other.

Re-write the sentences to improve the connections.

10 Other Ways to Write a Better Abstract

Write the abstract only when the document is finished. Abstracts written before then are just previews.
If you are forced to write an abstract before the document is completed, think about its purpose and write a topic sentence. Keep in mind that you’ll need to rewrite the abstract when the document is finished because it will no longer accurately reflect the contents of the document.
Before starting the abstract, list your thoughts on the document. Group related items together.
Prioritize the list and put the most important group first. The first few groups form the core of the topic sentence. The rest lead to supporting sentences.
If you can’t create a topic sentence, write the supporting sentences first. The topic sentence may then become obvious.
Write for an audience not necessarily up to speed in your subject area. This is important because you never know who will read your abstract.
Choose acronyms, abbreviations, and technical terms carefully as they may confuse many readers.
Define the scope of the project in the abstract.
Re-read your abstract after several days have passed and remove superfluous information and padding.

This technique works for documents of any length from a couple of pages to multi-volumes.

Using Keywords in Abstracts

I’ve added this in as many business documents are published directly to the web. This tip applies to writing abstracts, headlines and summaries.

Use keywords in your Titles, Abstracts, Headlines are documents are file electronically. As users search for documents by keywords, write the documents headings with these keywords in mind.

Likewise, your abstract must contain keywords that about the article, proposal, or report so readers can retrieve it quickly.

What other ways can we improve our business documents?

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also runs the popular Business Planning Blog at http://www.ivanwalsh.com

Why Free + Business Plans = Failure

admin — Tue, 14 Sep 2010 06:45:00 +0000

I blame Chris Anderson. He’s the editor of Wired who published the best-seller Free. (Scroll to the end to read or download FREE here). The idea is that Free can be a successful business model theory. While there is some merit in the idea, not everything needs to be charged, or at least, not up front. Ironically you have to buy his book to read about Free and buy his magazine and pay to hear him speak. More on that paradox later.

Writing your first Business Plan

Let’s say you’re about to write your first Business Plan. Or maybe write another one for a new business. Or maybe re-write a Business Plan that didn’t work in the past. And you have a choice… You can trawl the web and download some free Business Plan or get out the credit card and buy one. Tricky, isn’t it? There is so much out there, it’s hard to resist. Ok, why am I rambling on about this?

What Google Thinks of Business Plans

A quick search on Google shows us that the business community has some strong opinions on the value of business plans. Some deride them as antiquated whereas others see them as the foundation stone for a business growth. Who’s right? Well, it would be nice if someone did some research on the value of business plans. Actually, they have and Tim Berry presented the findings.

can Business Plan Software really Help your Business?

Here is a quote from a paper presented to the University of Oregon Department of Economics by Eason Ding and Tim Hursey:

Results suggest that planning with software is highly correlated with subsequent successes for a variety of firms.’

Business Plan Software, a closer look

Tim Berry is the founder of the well-respected Palo Alto Software (Business Plan Pro software firm) and, in fairness, flags this upfront.

He explains, “Palo Alto Software asked thousands of Business Plan Pro users a couple of dozen questions about their businesses, goals, type of business, years in existence, and business planning. Almost 3,000 people responded.”

The research findings suggests that those who finished their business plans were about twice as likely to:

Successfully grow their business,
Get investment, or
Land a loan than those who didn’t.

You can see the numbers on the chart above

What’s the real reason Business Plan Software Makes A Difference.

The researchers used the completion of a business plan as the explanatory variable, the success of the business plan as the dependent variable, and a number of related results – original intent of the plan, type of company, stage of company growth, and so on – as controlling variables.

Tim’s interoperation, which I largely agree with, is that ‘

completing a business plan correlated with increased success in every one of the business objectives that came up in the study (which were: getting a loan, making a major purchase, getting investment, recruiting a new team member, thinking more strategically, and growing the company). In every one of these cases, well beyond the threshold of statistical validity, completing a business plan improved the proportion of respondents who achieved the goal.

The authors of the study said:

The analysis indicates that completion of a business plan is positively correlated with every success variable indicated, even when controlling for intent of using the business plan.

And here’s their conclusion:

Except in a small number of cases, business planning appeared to be positively correlated with business success as measured by our variables. While our analysis cannot say that completing a business plan will lead to success, it does indicate that the type of entrepreneur who completes a business plan is also more likely to run a successful business.

the problem with free

I’m not sure it’s to do with the software or the templates….

Why?

I feel that when you make an investment in something, for example, buying business planning software or templates out of your back pocket, then you’re more likely to follow through. It’s not guaranteed but no-one likes to buy something and then let it sit there on your hard drive doing nothing.

For example, the investments I make in my career, business and people ensure that I am more likely to follow through and less likely to take them for granted. I’ve invested in them financially or emotionally and dont want to see the investment wasted.

In a society where ‘Freemium’ is seen as a new business model, we may need to consider the true returns we get from paying for things.

If you get it for free, do you really value it? Does paying for something mean you value it more?

About the Author: Ivan Walsh provides Business Tips for Smart People on Klariti.com. His also runs the popular Business Plan Blog at http://www.ivanwalsh.com

PS: The Business Plan Template is here.Discloser: I work as a consultant for Klariti Ltd just so you know and all. I still think this template pack is the best ten bucks you’ll spend this week

PPS: you can read FREE by Chris Anderson here and download it here

How to Document Business Rules and Business Requirements

admin — Thu, 02 Sep 2010 02:50:00 +0000

Post by Ivan Walsh. Follow me on Twitter.

What’s the connection between Business Requirements and Business Rules? One of the problems for Business Analysts is that they may focus so much on gathering Business Requirements, that they forget the underlying Business Rules which define how the business functions. Unless you’re clear on the difference between the two, you may end up gathering requirements which you may have to revise change later on if they contradict or break an existing business rule.

Business Requirements – Excel Template

Difference Between Business Rules and Business Requirements?

One area where many Business Consultants get tripped up is confusing Business Rules and Business Requirements. We looked at how to write Business Requirements last week, so let’s look at what Business Rules and Business Requirements have in common and where they differ.

What is the difference between a business rule and a business requirement?

Business Rules – these are statements (or conditions) that tell a person whether they can perform a specific action that relates to how the business operates. Business Rules also give you the criteria and conditions for making these decisions.
Business Requirement – this may include what you need to do to enable the business rule to be implemented. In other words, a business requirement may not be valid if it contradicts or breaks an existing business rule.

Example of Business Rules

Let’s step back a minute. My Dad has three pet ducks at his home. One water duck and two land ducks. Yes, it gets very loud sometimes.

So, here are some rules regarding the ducks health and safety:

Ducks cannot be given bread. It may choke them.
Ducks cannot be left unattended when swimming. They are poor swimmers and may drown.
Ducks must be given water with all meals. Helps them digest.
Duck must have buddies. They’re very socialable and pine when alone.
Ducks must be kept out of the kitchen. Yes, I see the irony

Ok, these are some of the rules we have for the ducks.

From Business Rules to Business Requirements

Now, imagine we were building a new apartment block for millionaire ducks. No doubt there will be many requirements about their lifestyle, feeding, entertainment and transport. While gathering and defining these requirements, we need to consider:

The new apartment owners must not allow folks to give bread to the Ducks.
If you’re building a swimming pool. They can have a pool if it’s a requirement, but they also need a life guard.

You get the idea, right?

Connection Between Business Rule and Business Requirements

Now that we’ve looked at how Business Rules work, let’s look at how and where they are connected:

Do business rules exist even when you can’t implement a requirement? Yes. The Business Rules inn independent of the requirements gathering process. It can and must exist independently of other processes.
Does implementing a business requirement mean complying with the business rule? Depends. In general, Yes, but there can be exceptions.
Does implementing the business requirement make it easier to comply with the business rule? Yes. The connection will be stronger across all business process and allow greater understanding of how the Business Rules to Business Requirements function.

Sample Business Rule

This is an example of business rules for a bank taking credit card applications over the web.

Example: Taking Credit Card Applications Over The Web

Business Rule: Customer has an Email Address.
Business Requirement: Ability for bank staff to send and receive emails to the customer.

Now if we change the business rule:

Revised Rule: Customer must have a valid Email Address.

Note: A second rule is required to define ‘valid email address’. An Email Address is considered Valid if does not return as ‘undeliverable’ within 60 minutes of being sent out.

Additional Business Requirement to support Business Rule:

System will immediately send email to customer once email address is received. The email is not batch processed but sent in response to each email received.

Note: The smallest change in the wording of the business rule can have significant impacts on other business processes. When testing business requirements make sure that you consider all possible scenarios where the revised business rule will impact other parts of the business.

Recap

Business rules describe what you may or may not do in a specific business scenario. It also gives the criteria, conditions and exceptions for making these decisions.
Business Requirements capture what a user must do to implement and/or comply with a Business Rule.
You may need different sets of business requirements to implement different sets of business rules, for example, when dealing with complex business processes with complicated conditions and exceptions.
Business rules are independent of business requirements and shouldn’t be changed to accommodate a requirement.

Be careful when changing a business rule in case it impacts how a business process functions.

Conclusion

There is one final point I want to share. Make sure that ownership of the business rules is properly assigned to someone – and make the person accountable.

One approach is to assign this activity to a business analyst with strong skills in document control and with the ability to push through new versions of revised Business Rules.

Try to find the most practical solution for managing your business rules. We used a networked Excel spreadsheet at a large European bank and it worked very well. All documents were version controlled and we followed a strict naming convention which made it easier to retrieve and update the rules when needed.

Don’t get tripped up on the technology. Once the team understand how the documents are structured, written and shared, then you should be fine. Also, remember to purge out-dated business rules. This means you’ll have fewer documents to manage and should speed up annual audits if/when the auditors want to check your document repository.

Final tip: in the Excel spreadsheet, cross-reference the business rule to the business requirements so you can quickly identify where one change impacts another.

About the Author: Ivan Walsh runs the How to Write a Business Plan Blog. He also shares Small Business Information for Entrepreneurs at Klariti.com

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