No one likes to become partners with someone they do not know. Just like interpersonal relations, business relations need a courting period too, during which the parties involved will try to get to know each other and move on to becoming partners from being counter parties. In order to be able to trust that I know the other party well, I need to get satisfactory answers to the six following questions – satisfactory to the mind and heart alike.
Why did you choose this specific business?
Most critical question. Whether we know it or not, every business has a purpose and a foundation which surrounds it.
What are the criteria for success specific to your business?
I consider the relationship and compatibility between the success criteria and the purpose for choosing a specific business important. Let me use my company as an example: our goal is to be the most reputable company in the industry. There is one thing for sure: if the goal is to be reputable then the criterion cannot be profitability or size.
Where do you imagine your business to be in 3, 5 and 10 years’ time?
The medium and long-term plans of the entrepreneur and the venture must be in harmony since the owner of a business idea and the business itself are intertwined in ventures.
What will your top three priorities be when you receive financial support?
The business plan should, very clearly, specify i- how much financial support is needed to attain the goals that are shown in financial figures and ii- what actions, in order of priority, will be taken when full or partial financial support is received.
What measures did you take against competition?
In my experience business plans rarely contain any ideas about revising pricing policies to fight against competition, making investments to allow for continuous product diversification or creating barriers to entry.
What is your exit plan?
An exit plan is generally thought of as taking an investor partner or selling off the whole business. I ask this question in the hope to hear about when and how an entrepreneur is willing to give up on their venture if things do not go as planned.
In short, pretty much everyone can talk about what they do and how they are (or they will be) doing it. The challenge is to be able to talk about why and for what purpose they are doing it- the philosophical and emotional part of one’s business. Consequently, I believe that the questions above will serve to determine how compatible an entrepreneur and an investor are in terms of goals, values and the end result. I also believe that such compatibility will allow the investor’s support to be more sincere and active and will help the investor to adopt a more positive approach towards any challenges or mistakes that may be encountered in the future especially if reality doesn’t match the business plan.
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