When small businesses want to grow, it’s sometimes a challenge to get potential investors to take them seriously. John Morris, managing director of GKM Ventures, said a good business plan is essential in attracting venture capital. He offers entrepreneurs some guidance in the art of drafting a plan that will address the interests and concerns of potential investors.

“There are a few critical things that a small business should watch out for. First, the product has to be identified and defined succinctly. The next step is to explain why a customer would buy the product, what its value proposition is, how the customer is going to benefit from buying the product, how they can buy it and how long it takes to buy it.

“Next, the small business should identify its competition and distinguish itself. Who you are trying to beat is something that has to be identified in the initial stages.

“A business plan is essentially a thesis. You have to take assumptions and then prove them to substantiate your claim. You need to walk the reader through your case and demonstrate that it is more than just a proposition. You need to prove your credibility.

“Always watch out for claims that are not supported by facts. They don’t do much for your plan. Financial assumptions should be supported by reliable facts.

“Keep the business plan at 10-15 pages. You just need to cover the basic ideas while adding as many facts as possible. You want to have something that is easily read; making it difficult by putting it on CDs or using complicated multimedia presentations will not always help. A simple e-mail with the business plan in the PDF format will work best.

“Biographies of the members in the management team should be included in the business plan. An investor would want to know the skills and the relationships of those in the team to the venture. For example, with a small startup software company, an investor would want to know what the team’s background in software is, what types of software they know and how much experience each person on the team has.

“Most times these small ventures are not taken seriously because of problems like credibility and experience. Some companies come back after a year or so and show what they have done in that period but most companies realize that their plan is simply not good enough and give up.”

*Case Study is a new feature in which experts offer advice on the various challenges that small-business owners often encounter. If you face an issue or challenge you think applies to others as well, please contact the Business Journal at

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