Bolster Credibility with Investors--Avoid These Phrases in Your Business Plan

Home
>
Business Management
>
Bolster Credibility with Investors--Avoid These Phrases in Your Business Plan

Bolster Credibility with Investors--Avoid These Phrases in Your Business Plan

Remember Papa John's commercial on TV with the slogan "Better Ingredients, Better Pizza"? Well its nothing more than puffery: general, non-provable, inane claims. The problem is puffery is not only acceptable it's often expected. Phrases like "the biggest," "the best," "the cheapest," and so forth are so over used most people simply ignore them.

If you're guilty of using puffery in your business plan, you risk filling your plan with circumstantial evidence and bold claims that won't do a thing to market your business. These frivolous claims add nothing to help an investor decide whether your business venture is truly any different from the other ventures they are evaluating. To weed out general, non-provable, inane claims, you need a plain and simple puffery sensor. And, here it is: whenever you make a claim in your business plan ask yourself this question, "Will investors really believe this?"

Let's take as an example a business plan for a car dealership that included these claims:

"We've got the largest selection of Ford cars and trucks in the entire city."
"We're the largest volume Ford dealer in the southwest."
"We sell more Fords than anyone else in the state."

Seasoned investors read right over this kind of hollow puffery in business plans. They're to the point that they expect entrepreneurs and business owners seeking investment monies to say anything and everything in an attempt to impress them.

In fact, one of the great pioneers of action-oriented advertising, Claude Hopkins (Tested Advertising Methods: http://testedmethods.bizplansecrets.com/) often drew this analogy to describe the use of general, non-provable, inane claims in advertising and I've found it equally applicable to writing business plans: "Platitudes and generalities roll off the human understanding like water off a duck's back. They make no impression whatsoever."

Aren't puffery, platitudes, and generalities all the same thing? You bet they are. And if you believe Mr. Hopkins, these kinds of statements roll off the human understanding like water off a duck's back. They make no impression whatsoever. I don't know about you but if I'm spending my money and time writing a business plan to raise capital for my business, I want it to make an impression!

Here are some other examples I've seen in business plans. A commercial realty company says, "We Go The Extra Mile For Our Clients." It's puffery. How about this wonderful statement regarding a consulting firm's competitive advantages ..."Knowledge. Expertise. Determination." That's it. That's the first line! That's their big "hook" to get investors to part with their money and back the firm's business plan. They might as well not list any competitive advantages.

Then there's the construction management company that claims, "We fine tune the process to create unique building solutions that function better, cost less, and open sooner." Don't get me wrong. All of these sound like fine benefits. But do you really think investors believe this? If you play the puffery game, it can cost you your credibility, lengthen or even prevent you from getting funded. Avoid these kinds of statements in your business plan - they make no impression whatsoever on potential investors.

Now, suppose this construction management company explained their "unique" process, provided cost comparisons, and gave the actual length of time to complete their last twenty projects against industry standards for similar projects. And, suppose they provided customer testimonials to back their figures. Would this be more believable? More convincing?

See the best remedy for puffery is hard verifiable facts and evidence. The same type of facts and evidence that you would want a defense attorney to present to a judge and jury on your behalf if you were on trail and facing death row.

Okay, I think we beat puffery to death already; it's pretty straightforward. To summarize, let me repeat Claude Hopkins' quote: "Platitudes and generalities roll off the human understanding like water off a duck's back. They make no impression whatsoever." So use the puffery sensor as you write and review the statements in your business plan. Simply ask yourself, "Will my potential investors really believe this?" If the answer is no, dig deeper for the evidence that will convince them.

Article by Michael Elia ? mike@business-plan-secrets-revealed.com. Mike is a CPA/MBA, visit his site http://www.business-plan-secrets-revealed.com< /A> for a free business plan guide and more articles on business plans.

In The News:

Yahoo! News: Top Stories

Gaza violence rages on despite UN cease-fire call (AP)

AP - The U.N. Security Council called for an immediate cease-fire in Gaza, but an intense bombardment of missiles from Israeli jets and helicopters early Friday and a barrage of Hamas rockets indicated there may be no quick end to the fighting.

Illinois House on verge of impeaching Blagojevich (AP)

AP - Gov. Rod Blagojevich faces almost certain impeachment by the Illinois House, a historic step that would trigger a trial to determine whether the Democratic governor should be tossed out of office.

Democrats begin new session with labor bills (AP)

AP - Democrats are ushering in what they believe will be a new labor-friendly era in Washington with House votes on two bills aimed at helping women fight pay discrimination in the workplace.

Job losses stack up as recession deepens (AP)

AP - Trying to survive a deepening recession, employers are cutting their work forces to the bone, leaving more Americans unemployed and with dim prospects of finding a new job any time soon.

Toxic coal ash piling up in ponds in 32 states (AP)

AP - Millions of tons of toxic coal ash is piling up in power plant ponds in 32 states, a practice the federal government has long recognized as a risk to human health and the environment but has left unregulated.

Obama to finalize national security team Friday (AP)

AP - President-elect Barack Obama is completing his national security team by announcing his unusual choices for CIA director and a national intelligence director who may face tough Senate confirmation questioning over how he confronted the Indonesian military when civilian massacres were occurring in East Timor.

Emphasis on smooth transition to new Cabinet (AP)

AP - Just minutes after George W. Bush took the oath of office eight years ago, he signed papers formally nominating 13 Cabinet-level officials. Several hours later, the Senate, meeting in a special Saturday session, confirmed seven Cabinet secretaries, including the heads of the key posts at State, Treasury and Defense.

Rifts show as Obama urges quick action on stimulus (AP)

AP - Lawmakers are under orders to finish action on President-elect Barack Obama's nearly $800 billion economic recovery plan by mid-February. But already it is plain that a set of serious fissures need to be bridged if the bill is to be completed within five weeks.

Critics' final answer: `Slumdog' wins 5 awards (AP)

AP - The critics have spoken, and "Slumdog Millionaire" is their final answer.

Mini Dynasty: Tebow leads Gators past Oklahoma (AP)

AP - The game defied expectations. Tim Tebow fulfilled them. He rescued No. 1 Florida, running through and throwing over No. 2 Oklahoma for a 24-14 victory Thursday night that gave the Gators their second BCS championship in three years.

World waits on jobs data as recession weighs (Reuters)

Reuters - U.S. employers probably cut the most jobs in at least 34 years last month as the global economic crisis gathered pace and moves by policy makers took time to filter through to struggling companies.

U.N. calls for immediate Gaza truce (Reuters)

Reuters - Israel pushed ahead with its two-week-old offensive in the Gaza Strip, ignoring a U.N. Security Council resolution calling for an immediate ceasefire.

Panel steps up criticism of Treasury: report (Reuters)

Reuters - A report being released on Friday alleges that the U.S. Treasury has failed to reveal its strategy for stabilizing the financial system, not answered questions asked by a government watchdog, and has done nothing to help struggling homeowners, the Wall Street Journal said.

EU seeks gas supply return after deal (Reuters)

Reuters - Europe sought a swift restoration of gas supplies on Friday after striking a deal with Moscow on monitoring gas shipments via Ukraine that have been halted by a pricing dispute with Kiev.

Citi backs measure to help avoid foreclosures (Reuters)

Reuters - Financial giant Citigroup Inc will support a proposal in Congress to rewrite U.S. bankruptcy law to help troubled mortgage borrowers avoid foreclosure, Chief Executive Vikram Pandit said on Thursday.

Illinois panel recommends governor's impeachment (Reuters)

Reuters - A legislative committee on Thursday recommended the impeachment of Illinois Gov. Rod Blagojevich, citing widespread abuse of power including allegations he tried to sell the U.S. Senate seat vacated by President-elect Barack Obama.

Obama team amending financial rescue package: report (Reuters)

Reuters - President-elect Barack Obama's economic team is urgently overhauling the $700 billion financial rescue package to broaden its scope beyond Wall Street, The Washington Post reported on Friday.

Qaeda Pakistan leader believed dead: U.S. official (Reuters)

Reuters - Al Qaeda's operations chief in Pakistan and a top aide are believed to be dead, a U.S. counterterrorism official said on Thursday, in what appeared to be the latest results of a campaign targeting the militant group's leadership.

Gaza toll mounts as UN Security Council urges immediate truce (AFP)

AFP - Israel carried out new deadly air raids on the Gaza Strip on Friday as the UN Security Council called for an immediate ceasefire to end the two-week-old conflict in the Palestinian enclave.

Hopes for Russia gas deal after EU claims breakthrough (AFP)

AFP - European states deprived of Russian gas amid freezing weather were Friday hoping for a resumption of deliveries after the European Union claimed a breakthrough in the crisis between Moscow and Kiev.

Bolster Credibility with Investors--Avoid These Phrases in Your Business Plan

Business Management Business Management