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 for a free business plan guide and more articles on business plans.

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Selling a Small Business: Seven Common Mistakes Entrepreneurs Make and How to Avoid It

Do you want to sell your small business? Or you are already in the process of selling your small business? If any of the criteria above best describes you, then read on as I share with you seven common mistakes you must avoid when selling a small business.

Selling a small business is a process every entrepreneur wants to experience but unfortunately, only few will build a business that will worth selling. There are several reasons why you would want to consider selling your small business either now or in the future but I won't go into the details here. I have already written an in-depth article highlighting why entrepreneurs sell their small businesses.

But in this article, I will be dealing strictly with seven common mistakes you must avoid when selling a small business. If you are still interested in learning this now; then follow me as I share with you below common business mistakes you must avoid when selling a small business.

Selling a Small Business: Seven common mistakes entrepreneurs make and how to avoid it

1. Impatience

Impatience is usually a common mistake most entrepreneurs make when selling a business. They want to exit the business and the want to do it fast. Being impatience can affect your deal negatively because your potential buyers need time to go over the deal and if you add pressure on them to sign the deal; they will smell a rat.

When selling a small business, it's advisable you keep calm and hide your nervousness or impatience. Even if you are under pressure to sell; don't act desperate as this could scare away prospects.

"Patience; this is the greatest business asset. Wait for the right time to make your moves." - J. Paul Getty

2. Indecisiveness

Are you sure you want to sell your small business? How much do you want to sell? Who have you decided to sell to? These are questions you must put to rest before putting up your business for sale. If you don't find the answers to the questions above ahead of time, you are only avoiding a stumbling block that will get back at you in the heat of the process.

One untold fact in the process of selling a business is that there's going to be behind the scene politicking; whether you like it or not. After putting up your small business for sale, there might be a couple of prospects; which will invariably result to a bidding frenzy and behind the scene lobbying.

"The best thing to invest in your business is your time. To schedule, plan and use time effectively, know your turf and know your objectives. Assess the obstacles and opportunities, then devise your strategies." - The Mafia Manager

If the above situation arises, then you must be prepared to take a stand and decide who gets the deal. You must also be clear and strict on your terms and conditions; you must stick to your agreement. No one wants to deal with an indecisive seller; an indecisive buyer is rather preferred. If you have a reputation for changing your stance when under pressure; then let your most trusted business team member oversee the deal.

"Before making an important decision, get as much as you can of the best information available and review it carefully, analyze it and draw up worst case scenarios. Add up the plus or minus factors, discuss it with your team and do what your guts tell you to do." - The Mafia Manager

3. Not doing a personality checkup

"It takes 20 years to build a reputation and only five Minutes to ruin it. If you think about that, you will do things differently." - Warren Buffett

Are you a person of integrity? Do you keep to your words? Do you have a strong positive personal brand? These three questions must be answered before you even put up your small business for sale. In an article I wrote previously, I stressed the need to invest in your own personal branding. I also explained that your personality can be a leverage for you in the world of business.

I have seen entrepreneurs raise billions of dollars in capital simply because they are trustworthy; meaning they have business integrity. I have also seen small businesses sold for millions and even billions of dollars because of the reputation of the entrepreneur behind that business.

So before putting up your small business for sale, make sure you conduct a thorough personality checkup because your buyers will definitely do. Does your personal name reflect a positive or negative image? Do you have friends and associate who are reputable? Can your business partners vouch for you? How easily can you get an endorsement from someone of high reputation?

These are some of the questions that must be answered during your personality checkup. As a piece of advice, if you know you have a bad reputation; don't be the lead dog in the sale of your business. Instead, let your selling team be led by someone of high reputation; it will get you a fair deal.

"The most important thing in your business relationships is your reputation for honesty. If you can genuinely and sincerely fake honesty, you will be a success. Never doubt it." - The Mafia Manager

4. Showing potential buyers the weakness of your business

When negotiating a deal to sell your small business; be strategic. Know your objectives and capitalize on your business strengths. To sell your business successfully and get a fair deal, you must emphasize your business strength or competitive advantage occasionally; not its weaknesses.

Hide your business weaknesses but be prepared to defend it should in case the buyers hits on it. If possible, tactically divert your buyer's attention away from your business weaknesses. There's nothing wrong with this act; it's strictly business.

You have done your calculations so it's left for your buyers to do theirs. If they fail to spot your business weakness, then it's to their own detriment. You just make sure you keep it that way; it's business.

5. Inadequate Legal checkup

Inadequate legal checkup is a common mistake made by most entrepreneurs when selling a business. You must strive to avoid this mistake because it's deadly. One thing with this mistake is that it can earn you a lawsuit, financial losses or loss of certain rights.

To make sure you don't end up committing this blunder, I will advice you hire an external attorney or legal practitioner to go through your legal framework; it will save you in the long run.

6. Shallow paper work or auditing

Before ever listing your business for sale; you must make sure you have thoroughly gone through the paper work. You shouldn't bother with paper work preparation; I think the accounting department should handle that. But you must sit and review this paper works thoroughly with your accountants. You may even go a step by bringing external auditors to pick holes in your paper work.

It is better external auditors pick holes in your financial statements or paper work than your buyers. As a last note, you should try to have some numbers, business ratios and business statistics off hand. This will prove to buyers that you know your business in and out.

"Know your numbers' is a fundamental precept of business." - Bill Gates

7. Letting the cat out of the bag too early

Until the final papers are signed and business assets transferred; don't spill the beans. Not to your friends, not to your employees and not even to your family. Only trusted men, who will add value to sweeten the deal should be made aware; you core business team as well should be involved in the deal.

Don't spill the beans; don't let the cat out of the bag. Don't, don't, don't. The result of revealing the deal before it is concluded might be more than you anticipated. Revealing that your business is on sale may lead to demoralization of your employees because they will be more concern about their welfare than your business.

Spilling the beans may also earn you some unnecessary competition, unsolicited publicity and media misinterpretation. Or worst still, you might end up with several lawsuits dangling on your neck. So once again I repeat, never let the cat out of the bag until the deal is sealed.

As a final note, I believe you will find these points I have made useful. So when preparing your business for sale; be sure to avoid these common mistakes and I will see you at the top.

And just before i drop my pen, if you really want to learn How to Start a Business from scratch; please feel free to visit our blog. In addition, you can also get quality information on How to Become a Millionaire in less than a year.

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Bad taste in music? Here’s how to avoid sharing on Spotify

We all have our secret Lady Gaga songs tucked away in our playlist or the 80's Monster Ballads that are loved rather than ironic affectations, so now as the streaming music service Spotify comes to the U.S. here’s how to avoid sharing the skeletons in your musical closet.

First things first. The default setting for Spotify music sharing is public on everything so if you want to get control of that, go to the top right corner where you should see your profile. Click it, then you should get an option to edit your profile as shown here:

When you click through that edit button, you get the area where you have granular control of what people see. Every time I open this screen, it automatically checks the box that has me automatically sharing new playlists, so uncheck that if you don’t want to share your new creations. Otherwise, click the slider and it will switch your playlists from public to private. Only one of mine is shared at the moment, and as you can see below, the shared OM playlist is green.

For those wondering what the results look like on the other side, Mathew kindly checked out my profile and shared the results here:

In these examples, I have shared my Spotify via Facebook, which means people who are friends with me on Facebook and who connect their Spotify accounts can see me on Spotify, and I can share songs by posting them to Facebook. However, when sharing a non-public song or playlist with someone on Facebook, then friends can see the song and playlist even if it isn’t public normally.

For those who don’t connect Spotify with their Facebook accounts, this is less complicated, although people can still find you by typing “spotify:user:username” into the search bar if they know your user name. Then people can only see your shared playlists. Plus, you can tweet public playlists out and can offer people access to them (there’s also a widget you could post on your blog or Tumblr). So, if you stop to manage your profile — even if you haven’t connected the service to Facebook — and be careful of what you share via social networks, you should be able to keep your unholy love of ABBA in the closet if you wish.

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