One of the biggest and foremost challenges for any business is finding investors and getting a business plan ready for them. In the previous part of the ‘How to Write a Convincing Business Plan for Investors’ series, we understood the expectations of the investors. Now, let us go ahead and see what to include in it.
The vision
- Investors want to know what your goal is, especially those who are funding early-stage firms. What directions do you anticipate your business taking in the future? What issues will you resolve for your customers and who will they be?
- They want to know that you’re planning for the future and that your vision will likely develop and evolve as time goes on, even though it might take years to implement.
Market fit
- Investors seek more than just a business concept. They want proof that you are helping clients with their problems.
- For you to develop a successful business, your customers must want what you are selling, and your business plan needs to present the proof that you’ve gathered that indicates you’ll be able to sell your goods and services to consumers.
- Furthermore, if you already have some early sales and clients as ‘traction,’ then it is an added welcome bonus.
Fund requirement and allocation
- You must be aware of the amount you are requesting from investors while making a pitch. You should be able to determine this using your financial forecast.
- You’ll need to collect enough cash to pay for anticipated costs, meet cash flow needs, and provide some extra money as a safety net.
- You should also be very specific about how you want to use your money. This component of a business plan is frequently referred to as “sources and uses of investment.”
Able management
- A successful business is mostly dependent on more than just a solid idea. Despite the fact that many people have good company ideas, those who can effectively implement them usually prosper.
- Since investors want to know that you can turn your concept into a profitable firm, investors will pay close attention to the area of your plan where you discuss your management team.
- It’s acceptable if there are gaps and you still need to hire critical staff. The most crucial thing is to convey that you are aware of your demands.
A way out
- Investors want to eventually get a return on their investment when they lend you money to launch and expand your business.
- This might occur if you eventually sell your business to a bigger organization or even go public. Investors will, in some way, be interested to hear your ideas regarding a potential exit plan for your company.
- Since it is all about showing them how beneficial it is for them to invest in it, you need to show exactly how they can get out of this investment, if need be.
So, these are the finer points of writing a business plan for investors. However, our preparation is not yet complete. Hop on to the next part to find out what additional preparation is required before pitching to investors.