Two Types Of Business Plan Cover Pages - Which One Are You Using?

This is the tale of two business plans with very different cover pages. They both contain a unique and exciting business opportunity with the potential for high investment returns. Arriving in the morning mail, each neatly bound plan lands on the desk of the same potential business investor. Both plans are competing with hundreds of other documents, worksheets, phone calls, and articles for the investor's attention. And, they compete in time, because each one, seen for a few seconds, is either heeded or passed up and seldom returned to by the investor.

The first plan is tightly bound. It has a cover page made from thick paper stock. The cover page resembles the cover page to a term paper. The company's name in the center of the page and the owner's contact information in the bottom left corner provide the first bits of information about the business to the investor. Not being familiar with the company name or the owner, the investor must now open the plan in order to learn anything meaningful about the business venture.

However, the stiff cover page complicates this simple task by preventing the document from easily flipping open and laying flat. Aggravating the investor who suddenly has to divert one hand from the uncooperative business plan to answer the phone as it rings for attention, leaving the remaining free hand to wrestle with the cover and hold the plan's pages flat.

After wrestling with the business plan, the quick-handed investor gets a glimpse of the first page of the plan: a standard confidentiality agreement. So the battle to find some meaningful information continues. This time, after some contorted efforts, the investor arrives at the next page, which is?the table of contents.

At this point, the investor is reminded of the caller on the phone. Not wanting to be rude, the investor apologizes to the caller and returns to the business plan challenge at hand. Eventually the investor reaches a page titled "Executive Summary." Anxiously the investor scans the page only to see an endless ocean of words and "information-less" headings like "The Company," "The Market and Industry," "Business Model/Strategy" and so on. Not wanting to be rude to the caller any longer, the investor decides its best to put this document aside...

The second business plan is also neatly bound. However, the binding on this plan allows the cover and pages to flip open and lay flat. In addition, the cover page is divided into two columns.

The left column is about five inches in width. It contains a brief headline at the top of the column that captures the essence of the business. The headline is followed by an outline of the business plan with concise single-paragraphs that summarize the company, its management team, its products/services, the funds being requested, available collateral, the use of proceeds, and a likely exit. The column ends with a small table of financial projections.

The right hand column, about two inches wide, begins by identifying the stage the business is in and its primary industry or market. This information is followed by the owners contact information and ends with a table of contents. The layout is not crowded and has plenty of white space to make it easy to read and easy on the eyes.

As the investor attempts to read this business plan, he receives another phone call. This time the investor doesn't have to wrestle with the business plan to read it. With one hand on the receiver, the other simply holds the plan or takes notes.

More importantly, the investor never has to actually open the business plan to find out basic information about the business venture. A quick scan of this business plan's cover page tells whether or not this business venture meets the investor's investment criteria in terms of market focus, business stage, and deal size. By simply highlighting a few key elements on the cover page of the business plan, the investor can pass along meaningful information to a colleague for further review and follow-up.

But let's say that this business plan doesn't fit this investor's investment criteria. What would happen then? Well, instead of just being passed up and never returned to, this investor, who was able to quickly glean some good insight into the business plan straight from the plan's cover page, is now in a position to forward the information to another investor who might be looking for this type of investment opportunity.

Remember, investors are typically very busy people; often juggling more than one major project or deal at a time. To separate your business plan from other plans and increase your chances for getting the funding you need, lay out and package your plan to fit their busy schedules and work styles. Start with an effective business plan cover page. Click here for an example.

Mike Elia is a chief financial officer and an advisor to venture capitalists and leverage buyout specialists. His business plan ebook "Business Plan Secrets Revealed" and free business plan guide help you make your business the most appealing investment choice to venture capitalist, bankers, and other business investors.