Your business plan is a critical aspect of your business. More businesses are successful when they use a business plan than when they do not. That’s why you’ll find so many business planning resources at www.morebusiness.com. It’s a simple concept of planning improving the chance of succeeding.
Business plans are used for a variety of purposes: one key purpose is to provide direction to the entrepreneur over time. It’s something you can refer to periodically to make sure you’re on track. Occasionally, you might make changes to it – because you might think of it as a “living document” – that grows and flexes with changes in your business structure, in the economy, or because of other factors. These business plans may tend to take on a “patchwork” appearance with additional pages, sticky notes, and hand writing throughout.
But your business plan is also something you’ll use to go to the bank or lending institution to get money. And when you go there, you’ll want a nice looking document. Although we don’t want to live in a world where we’re judged by appearances, you can be sure that you and the feasibility of your business will be judged by your business plan.
So if you’ve spent a long time preparing it, that’s great. You need to review it again and again to make sure it’s a solid plan that paints you (truthfully) in the best light possible.
But how much time did you spend on the cover letter?
It’s easy to spend a lot of time in the exciting “envisioning” part of your business plan or the detailed financial part of your business plan… and simply not give as much attention to the cover letter. However, you should approach the cover letter with as much care and attention as you would approach anything else in your business plan. Here are some tips to help you create a great cover letter:
- It is unlikely that you’ll want it to be more than two pages long. If possible, get it down to one page: perhaps four or five paragraphs at the most. If it’s too long, they’ll skip and get to the main document.
- Don’t be afraid to have it professionally written. Even if you did the rest of your business plan yourself, the cover letter is the first look the bankers will get at your business.
- Learn the properly accepted formatting and use it.
- Stick to a professional looking, east-to-read font, like Times New Roman. On typed documents, avoid a sans serif font like Arial.
- Find out the name of the person who will be reading the letter and address the letter to them. “Dear Ms. Smith” is so much better than “To whom it may concern.”
- Remember to write in a way that clearly outlines the benefits to the bank of investing in your business, not in a way that talks about how good your business is. Remember that banks are ultimately looking for a return on investment from a good business; they’re NOT just looking for a good business.
In upcoming articles, we’ll look at other segments of the business plan and give you tips and advice to get the most out of that part of the overall package.