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COULD YOU BE SETTING YOUR BUSINESS PLAN UP FOR FAILURE?"It's unlikely a business plan by itself will bring funding in the door, unless it is part of an overall marketing strategy."David E. Gumpert, author of "Burn Your Business Plan", tells the story about how he and his partner failed to raise money after sending their business plan around to venture capitalists and meeting with several others to make presentations. Disappointed by the fruits of their labor, they considered giving up on their venture in 1995. Fortunately, on the advice of their board of advisors, they chose to divert their time from massaging the business plan to making sales. The financing, they were told, would come later. Turns out that during 1996 they sold enough to stay afloat. But in 1997, sales failed to grow as quickly as they expected, so they decided to seek financing again. This time, they expected it would be easier to obtain financing, after all they were now fairly well established. Their advisory board, however, told them to continue to focus on promoting the business and making more sales. If At First You Don't Succeed…Instead of following the board's sage advice, Gumpert and his partner decided to dust off their old business plan. They spent many hours rewriting and updating the plan, and then set out once again to seek financing. And, once again, they were turned down. How could this be? In the late 90's, it seemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 - had grown to $16.4 billion by 1997.Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing, or call it quits. They took the first choice but took a different approach. They engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients' success. This publicity got their phones ringing with new prospects, several of which converted into additional sales.As the business grew, they remained on guard about monitoring their expenses and aggressively collecting receivables. By 1999, they were operating profitably at $2 million in annual revenues, with nearly 20 employees. Also, during this time, the amount of venture capital being invested nationally had soared to an astounding $55.5 billion. But, Gumpert and his partner paid little attention to this; their interest in outside financing had dropped significantly. The Power of PublicityGumpert and his partner carried their success into 1998 and 1999. Their promotional efforts eventually attracted the attention of a publicly held company that was seeking the expertise they offered in developing and managing online content. In December 1999 this company acquired Gumpert's company, NetMarquee. To Gumpert's surprise, the acquirer never asked to see their business plan; it only wanted to see their financial projections under several different scenarios. In recounting his financing experience, Gumpert makes two points: First, even during good times, the venture capital route is closed to the vast majority of businesses that seek it out. While it might have seemed back then that nearly every business asking for venture capital received it, the reality is venture capitalists tend to reject, out of hand, most carefully crafted business plans. Second, you'll be surprised at what you can accomplish without the financing you think you so desperately need to stave off failure. Four Tools To Help Market Your Business Plan to InvestorsThe lesson in all of this is that it's unlikely a business plan by itself will bring funding in the door, unless it is part of an overall marketing strategy. Chances are you already have a book or two on how to write a business plan. If you do, I'm going to guess that, like Gumpert, you already have fixed in your mind certain beliefs.For example, you might think, "If you're trying to attract investors, raise capital, or sell your business, then you should give your prospects a detailed business plan document." Not so fast. It may be more effective to get their business card, send them an executive summary, and then follow-up with them to check their interest level. Or perhaps you believe, "A business plan document is the only way to get investors interested." Again, as Gumpert's experience proves, this is not so. Some businesses attract investors through personal contacts, press releases, or because of the pure uniqueness of their market position. So open your mind; take a thoughtful step or two back, and consider using these four tools to help you achieve your desired results.First, develop a concise, well written twenty-five page business memorandum. This mini-business-plan should build a case that separates your venture from your competition. You don't need a two-inch thick business plan. Plans this long lack aim; instead of building a case that leads investors to decide whether the business is the right investment for them, they "fire away" in hopes that some of the shots will take effect.Second, craft an effective elevator pitch - a 60-second, to-the-point verbal pitch for your business - that communicates to your customers and investors what you do in an exciting and engaging way. The ability to separate your business from your competitors and get an investor's interest in the short time it takes to ride up an elevator is critical.Third, put together an investor relation Web page. Of all the communications media available, the Web is particularly important. It's fast and available 24/7. With it, you can capture leads and automatically keep in touch with those who are interested in your business.Finally, use press releases to get your word out. A press release is the basic tool for gaining the attention of the media. The public's desire for interesting, relevant news remains strong, as does the importance of carefully selecting relevant target audiences. You are dealing with much more skepticism on the part of the public than there has been in the past, which makes the evidence and objectivity of your press release paramount.The process of raising money and attracting investors isn't easy. If it were, every business venture would get funded. You have to use all the tools that are available to you, and start looking at this process as a marketing process backed by hard, verifiable evidence. You just don't know when investors will be ready to invest; but you do know that if you do everything you can to optimize your funding process it will bear fruit, and ultimately raise the money you need for your business.