Credible Business Plans

"How do I convince prospective investors my business plan is credible?" The company founder shyly asked.

Credibility comes from acknowledging the risks of your plan and identifying milestones for mid-course plan changes. For example, although your market might be billions of dollars, there is no assurance you can get any of it, much less the classic 1%. If there is one thing savvy investors agree on, it is: Your plan will change regardless of your positive assurances to the contrary.

You lose credibility when you argue on style rather than the merits. Of course you do not know if you will be successful and to declare it so -- is to lose credibility. You can be positive without professing to know the future.

Be prepared to answer the question-- will you have enough money to stay alive for a mid-course correction when you finally recognize the initial product concept failed? Credibility comes from acknowledging and identifying business risk and not from asserting --"this is a sure thing, how can I miss?" If your investors wanted a sure thing, they would be buying government bonds. They are not. They are listening to you. Risk reward are directly related and savvy investors know it.

Credibility also comes from what others say about you. It is of little value for you to declare you are a honest, ethical, leader, genius and a team player. You need to acquire objective testimonials from institutions, prospective customers or people, other than your relatives. Start collecting your testimonials now.

Credibility is gained not by persuasion or simple declarations. It is earned by actions. Start earning it today.