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:

---

Write Winning Proposals For Venture Capitalists

You need to secure money for your project. You visit... Read More

Policy & Procedure Manuals - Tools For Greater Productivity and Efficiency

In today's tough retail environment the retailer needs all the... Read More

Sarbanes-Oxley and Section 404: Old Dog, New Teeth

The failures we have seen in the quality and integrity... Read More

The 5 Things Great Managers Sense about their People, Every Day

Using all of your senses, to help you test how... Read More

Marketing Miracle: Outsource Your Creative Services

The current economy is causing most companies to tighten their... Read More

The Seven Cs: Partnership Danger Signs - The 5th C: Control Issues

A series of articles exploring the seven critical areas that... Read More

The Red Phone - Management Consulting in 30 Seconds or Less

Modern business faces complex problems; management often calls upon highly-specialized... Read More

How To Decrease Profits Without Really Trying

Hurting your sales efforts can be accomplished easily with the... Read More

Recognition: A Quick, Low-cost Way to Motivate Employees

Recognizing good performance through praise or other positive action is... Read More

Time Management - How to Have Productive Meetings

One of the greatest time wasters of all are unnecessary... Read More

A Facilitators Guide to Running a Stakeholder Analysis Workshop

This facilitator's guide to running a stakeholder analysis workshop is... Read More

Five Strategies To Strengthen Your Company?s Financial Management

Too many businesses wait until a crisis occurs before they... Read More

The Higher You Go

The higher you go, the cooler it becomes. Really? Let... Read More

Book Summary: Mind Your Own Business

A maverick is an independent person who will not go... Read More

Be a Change Agent ( Part 1)

Aligning business organizations to be successful in the present and... Read More

Issue Management Methodology for Tracking Project Issues

1. What is an Issue?An issue is an incident, circumstance,... Read More

Management Procedures Usability ? How to Improve

Are your people consistently following your procedures? Each year, organizations... Read More

In Leadership, The Critical Convergence Drives Great Results

The Leader's Fallacy lives! We subscribe to the Fallacy when... Read More

Personnel Access Poses a Continued Risk

The Security Consultant's Perspective...Implementing Personnel Security Initiatives should be the... Read More

The Cheapest, Forget It !

Wouldn't it be great if we got get the cheapest... Read More

Increasing the Return on Your Training Investment

Insightful leaders and organizations recognize that training is a valuable... Read More

Innovation Management: What Problem Is Being Solved?

Creativity can be defined as problem identification and idea generation... Read More

Employee Surveys: a Strategic Tool for Positive Change

Do you want to measure your workers' level of satisfaction?... Read More

Five Reasons Why Leaders Fail to Create Successful Change

A bold title, don't you think? I mean, change is... Read More

Pitching to Employees

The senior flight attendant on the WestJet flight was starting... Read More

Narcissism in the Boardroom

The perpetrators of the recent spate of financial frauds in... Read More

Finding Common Ground Through Consensus Decision-Making

It's clear to me that a workplace is a better... Read More

Corporate Governance for Business Owners

It is clear that good Corporate Governance is in the... Read More

14 Ways to De-Stress Employee Vacations

Employees truly deserve paid vacations. Theystruggle through stressful jobs most... Read More

Compensation and Six Sigma Black Belts

One of the more ambiguous elements of a Six Sigma... Read More

The Permissive Environment is the Suspect

The permissive and participatory conduct which most employees take for... Read More

Executive ESP: A Pathway to Success!

We all have psychic abilities that we use daily, although... Read More

Learn About Commercial Collections Agencies Fees

As with any other service, there are good and bad... Read More