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 for a free business plan guide and more articles on business plans.

More resources:

RELATED ARTICLES

Hows Your Company RQ (Reputation Quotient)?
In light of recent corporate scandals, from Enron and Global Crossing to those of once trustworthy mutual funds, is it any wonder that more people are asking, "Can I trust this company enough to do business with them?" But the trust issue isn't just relative to the buyers of your products and services, its vitally important to employees as well. Impacting their retention and performance in very real ways.

How to get an Audiences Attention
A trainer dryly discussing how to motivate people in an organization basically has just another "point-by-point" presentation. But suppose that he mounts the podium and begins to speak.

5 Awesome Actions of Highly Creative Leaders!
How many times have you wondered why you are unable to "think-out-of-the-box" more often?We are all products of our environment and our backgrounds usually prevent us from viewing situations with the unique eyes of our personal experience.However, the leaders who think "out-of-the-proverbial-box" do so by incorporating what I like to see as a, Strategically Wise Synergistic Process of Creation.

Print Buying Consultant
Ten Money Saving Tips for Print ManagersDespite their stated desire to realize savings from streamlining the various components associated with the print buying process, it's been my experience over the years, that many print managers neglect to do some of the easy things that can add up to significant cost savings annually. We all know these things, but we don't always do them.

Nine Steps to Help You Develop Your Potential
Go into any bookstore and you will find a big selection of self-help and personal improvement products. Most everyone (and I'll bet everyone reading this) wants to improve.

A Renewed View of the Modern Business Culture
Life can sometimes be unexciting if not refreshed by the will to create according to one's own conscience and freedom. Often, the power of passion fuses into unexciting or appealing activities.

Managing Creativity
Creativity Starts Here!The ability of an organisation to create new products/services and innovate new processes is an essential skill providing a sustainable form of competitive advantage.Given that organisations need to be creative, why are only a few really good at it and why are only a few individuals perceved as creative?In this article we will examine the theories that underpin creative organisations and the attributes of the managers and individuals who work within them.

Turbo-Charge Your Rollout with ERM
Employees are the often-neglected stakeholders in the success or failure of a CRM (Customer Relationship Management) initiative. But employees don't always resist new ways of doing business.

Are You Prepared for a Disaster?
Yesterday I look at my calendar and saw that my newsletter was on my calendar for today. I wondered what I would write about.

Cultural Differences: Making it Work Virtually
Working virtually adds a whole new dimension to the phrase "cultural differences". It immediately becomes apparent how different people around the world work, live and network.

Communicating In Chaotic Environments
How do you, or would you, communicate in a chaotic environment?That question was put to me by a reader who works in big, frantically-paced telecommunications company. Many projects operate at the same time, and many connections exist among the project teams.

Too Much Time Treating Symptoms
A man drives down the highway each day on his way to work. On Monday he gets a flat tire.

Why You Should Hold One More Meeting
If you are completely happy with where you and your business currently are then you can stop here. If growth and change aren't something you have any interest in, there is no need for you to read any further.

To Outsource or Not to Outsource
In these days of restricted head count and tight budgets, the question of whether to outsource or hire in-house staff is more critical than ever. The technical publications function, however vital, is undergoing more scrutiny and also facing greater challenges than ever before.

Knowledge Management: More Than Just Know-how!
People sometimes interchange the terms "know-how" and "knowledge", but there's a world of difference! Systems vendors are falling over themselves to sell you so-called "integrated knowledge management solutions", but these are rarely more than glorified information management systems with go-faster stripes.If we fail to understand knowledge in all its facets, then there is a danger that in doing so we miss out on the most valuable aspects of knowledge management and end up delivering a system-driven solution, rather than a cultural shift towards sharing and learning from experience.

Dissenion Down On The Cubicle Farm
How content and satisfied are American employees? Not very!According to Corinne Maier, a psychotherapist and author of "Bonjour Laziness," corporate cubicle inhabitants are anything but tranquil and joyous. These natives are truly restless.

Communicating CEOs
I see a PR firm has done a survey on the amount of time Canadian CEOs spend on communication, and found they spend almost half of their time on communication.I think we're supposed to be impressed that CEOs spend that much time on communication.

Leadership: Stoking The Success Train
Everyone wants to succeed yet everyone has a different perception of what success means and what it will bring into their lives. It is a means of gaining financial freedom for some and for others it means a healthy, happy family life.

Business Innovation - Organizational Culture
Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.There are other useful definitions in this field, for example, creativity can be defined as consisting of a number of ideas, a number of diverse ideas and a number of novel ideas.

How Your Feelings and Those of Your Employees Can Make The Difference
How we feel is really more important than what we know. This is because how we feel plays a bigger role in our behavior than knowing what we should or should not do.