Writing a business plan can be a daunting task, and mainly because this business plan will be reviewed by professionals who will have to make a quick assessment as to whether your business pitch is worth it or not.
But do you really know what investors are looking for in a business plan? Have you ever wondered what goes behind the decision-making process?
We’re letting you in on the method to get a business plan investor-ready and make sure you’re ticking all the boxes for investors.
1. Tailor your business plan to your audience
This may seem futile, but the idea that your readers have no clue what your business is about is one you should think about.
If you know everything there is to know about your field, this might not be the case for a bank or even a private investor. They will need clear explanations in understanding what your business is about to make sure it has the kind of potential they’re looking for.
This can be easily tackled by making sure you underline every aspect of your business, whether you’re offering products or services. Make sure you know everything that happens on a day to day basis.
Avoid using any kind of jargon, or at least explain it properly so that no one gets lost in the process. In other words, be as clear as possible in your writing process.
2. Research your market thoroughly and know your facts
The first thing you need to do is to complete market research that will allow you to prove the opportunity within your sector. This analysis will enable you to draw conclusions and make sure there is a business opportunity to show potential investors.
Introduce the market in a global and local way, and take particular interest in analysing the competitors you will play against.
Once this market research has been done, make sure your information comes from heavily reliable sources such as statistics institutes or publications.
Investors will check the facts and whether you’ve conducted thorough research for your business plan.
3. Put together realistic goals and expectations
Being optimistic is a good trait, but being realistic is better. It will be essential for you to set goals you will be able to achieve in order to avoid disappointment.
Investors will look at any gaps within your business plan and this is why you should make sure you have considered every single aspect of it, especially regarding your financial predictions.
Once you have evaluated all the risks, make sure your financial forecast isn’t too high compared to your capacity, and have a look at your competitors to make sure you’re aligned with the market.
This doesn’t mean you should base your financial forecasts on your competitors, but it’s a good basis to make sure you are not overestimating anything.
4. Include appendices if needed
The key to a great business plan is to be as accurate as you can be, which means you can include any additional document to make sure you have proofs.
This is optional but will save you some time in order to avoid having investors asking for more guarantees. Handing the guarantees to them on a silver platter will be a safer option, and that way you won’t have to go back and forth with emails.
The appendices can include founder biographies, diplomas, along with in-depth financial analysis and graphs.
5. Polish your executive summary and cover page
As part of your business plan, the cover page will be the first point of interaction between investors and yourself. Make sure the cover page is neat and contains your personal information along with the date and the company name.
Once the page is turned, the investors will have access to the executive summary which will entice them to carry on reading or not.
Your executive summary should summarise the business purposes of your company, and will give the investors a good way to become acquainted with the large part of the business plan.
We’ve explained the main aspects you should look at whilst putting together your business plan. Now you just have to put them into practice!
Author bio: This blog post has been written by The Business Plan, an online business plan software for entrepreneurs, startups, accountants and consultants. You can get a free seven-day trial by registering here.