The Power of the Business Plan Cover Letter
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 all 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, let's discuss some of the factors that should go through your mind before you start writing one.
First and foremost 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. Don't refer to the business plan in the letter with things like "as the Executive Summary states" 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? It's 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 isn't 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 people's 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.