The Power of the Business Plan Cover Letter
Why the Business Plan Cover Letter Works So Well
For those that want to own a business more than they want to work for a business, knowing how to write a top-notch business plan cover letter may be one of the most important skills in their entrepreneurial career. Just like a resume is a required tool for job seekers, a business plan is a necessary document for anyone seeking investors, credit, partners, employees, publicity and regulatory approval for a new enterprise. Just like a resume, however, the business plan is not capable of standing on its own.
In the same way that a resume is too abstract, too impersonal and not inspiring, a business plan may lay out the facts of the prospective business to the reader but not inspire the sort of enthusiasm and excitement the entrepreneur wants. Also like the resume, the business plan lacks the most important element of allÖ MOTIVATION! For a resume cover letter, the motivation is to pick up the phone and give the applicant a call to schedule a job interview. For the business plan, that motivation might be to schedule a meeting, to approve a loan, to run a newspaper story, to visit a website, or any of a wide variety of actions. But the only way that the reader will know what to do, and receive the encouragement to do it is if the business plan cover letter energizes them, gives them directions and inspires them to follow through on those directions.
Some Business Plan Cover Letter Considerations
Now that you have an idea how important a business plan cover letter is, letís discuss some of the factors that should go through your mind before you start writing one. First and foremostÖ write the business plan cover letter as if it is a freestanding document that can give the reader an idea what your business is about whether or not he or she reads the rest of the business plan. Donít refer to the business plan in the letter with things like "as the Executive Summary statesÖ" or anything like that. If the busy reader has a pair of documents arrive in the mail, one of which is one page long and the other that is twenty, he or she is going to read the one page one first and then decide whether to read the twenty pager at all.
Second, think about what is it that you want the reader to do when he or she finishes reading the business plan cover letter? Itís a little bit presumptuous to expect any reader to be ready to invest or start a partnership with an entrepreneur after reading a single business plan cover letter. It isnít out of the question for a targeted reader to be convinced to schedule a meeting with that entrepreneur and explore the possibility of further dealings face to face. So that should be your ultimate goal: to schedule a face to face meeting with the target to discuss the next step that you want them to take.
Third, the key question that you should have perfectly clear in your mind before you even sit down in front of the keyboard are: What problems your business plan intends to solve. This has two parts: First, what problem does the business described in the business plan solve for its customers or clients? And second, what problem does the business plan intend to solve for the person reading it?
Consider Human Nature
In case nobody told you growing up, we live in a selfish, self-centered, grasping and greedy world. All of us, except maybe some sweet little grandmother someplace in Finland, walk around all day long thinking about the things we want and what we wish other people would do for us. In other words, how people will solve a problem that we want solved.
Money, the economic system, and business were invented as a way of making those things happen in as an efficient and non-violent and how to make those things happen. To boil it down into the simplest possible terms, we solve other peopleís problems for them so they will give us money. We take that money and give it to other people so they will solve our problem for us.
Think about it for a second. Can you name a profession, a business or an industry that can not be explained as solving a problem for someone? BMW helps people get from point A to point B with speed, prestige and comfort. Mountain Dew quenches thirst and provides caffeine. Jessica Simpson entertains and allows even the stupidest person to feel really, really smart by comparison.
Do You Get It Now? Good!
In a similar manner, your business solves a particular problem for a specific set of customers. Is it to provide a service that is not available now? Or to provide an existing service more effectively, conveniently, cheaply or quickly. Are you offering a product which is differentiated from other products in terms of price, usefulness or quality? Why do you believe there is sufficient demand for this product? How big do you estimate your target market is? How did you arrive at that conclusion? How do you plan to make them aware of your product and secure their business? The more precisely you can define that problem and customer the more convincing your business plan and business plan cover letter will be.
The second part of the problem solving question is what problem you will solve for the reader of the business plan cover letter? Are you going to make them some money? Are you going to augment their existing business? You can bet that the target is going to be reading your business plan cover letter thinking to him or herself "whatís in this for me?" so you need to be sure that the answer is somewhere in itÖ preferably at the very top, in ALL CAPS so that the reader will see it first and decide to read the letter in the first place.
Answering these questions is only the first half of the problem that the business plan cover letter must solve (See? Itís ALL about problem solving, even cover letter writing!). Once you have defined the problems you will solve for the customer and the letter reader, you need to explain HOW you will solve those problems and WHY you are the best choice to do so.
Now Describe Your Strategy
The how you will solve these problems section is a straightforward description of your business strategy. When in doubt, make sure that you cover all the "W and H" questions. Who is the customer. What will you do for the customer? How much will you charge. Why is this a needed or valuable service? Why is it different from what already exists? When can you start? What do you need to get started? Considering that your business plan should already have this information in it, this should be an easy portion of the business plan cover letter to write.
In terms of why you are the best choice, consider this a case that you are making, connecting the aspects of the problem directly to your problem-solving attributes. Even though you will be dealing with intelligent, savvy individuals, donít be afraid to spell things out directly and plainly in this part. "Our company is well-suited to provide these services in a cost effective manner because this reason, this reason and this reason." Donít assume that the reader will be able to make the connections. Even if they can, they may be distracted or busy or tired when they are reading the cover letter. Donít make them work too hard.
One word of advice about laying out your capabilitiesÖ nothing makes a stronger case for saying that you can solve a problem than saying "Iíve solved it before." That speaks louder than "Weíve studied how to solve this problem," and "we have a strong theoretical model for how this problem can be solved." Listing specific instances where you faced and defeated similar challenges goes a long, long way with the reader. Those kind of specific accomplishments establish your competence and add an element of confidence in your ability to do what you propose to do.
What Do You Want the Reader to Do Next?
Last but not least, itís time to motivate the reader to do what you want and need them to doÖ to take the next step to solving your problem. Earlier, we agreed that the most reasonable next step is to pick up the phone and make a call to arrange a meeting or time to talk further. So come on out and ask for this.
Say something like "I look forward to sharing the details of this exciting project with you in person. Please give me a call at 555-888-9999 so that we can set up a time to talk."
Before sending out his business plan cover letter, itís time to make some edits and proofreading though. Read through it a couple of times and run whatever spell and grammar check your computer provides. Note the use of the language. You shouldnít be over casual, like you are talking to a friend but neither should your language sound formal and stilted. An intelligent, lively, friendly tone is the thing to shoot for with this thing.
One great way to check for tone is to read the letter out loud. Places that seem awkward or sound funny can be detected before they make it out into the hands of the targeted reader. Good luck!
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