5 Tips for creating a winning Business plan to attract investors.
Planning and writing a business plan to attract investors for your Business can be daunting, where do you start? What do you write? Here’s a few important tips to help you get ahead with your plan.
Business planning and attracting investors are so closely linked in the business world that it is difficult to attract investors with fat-pockets without a standard business plan.
We certainly wouldn’t have our business heroes like McDonald's, Microsoft, Facebook, or Dangote or basically any other business excelling in the big leagues you can think of without a business plan. But researching and writing a business plan can be a daunting task. Where do you start? What do you write?
“He who fails to plan, plans to fail.”
Don’t worry — you are in the right place. In this article, we share with you every important tips you need to learn to be able to write a business plan that investors can’t ignore.
Before we proceed, let’s test to see if you understand what a business plan is.
Business Plan.
As simple as possible — A business plan is a well researched, written and detailed document that immediately tells an investor or customer about your business goals, market size, value proposition, management capabilities and financial information and goals.
Actually, a well written business plan does more than enlightening investors on the goals of your business and how you intend to achieve your goals, the best business plans persuade and excites potential investors to jump on the opportunities to be a part of your success story. Thereby, getting involved and benefiting from profits to be made and the success of the company.
You can start writing your business plan from anywhere in the world and attract investors, if you learn to write a best-selling business plan. Some business owners share testimonies of how they began to write their own business plans in the backseat of their cars or in restaurants while discussing business with their partners and suddenly they are struck by inspiration. It’s in these “aha” moments that great business ideas where birth and sustained. Some might have not gone out with either a pen or notepad so they’d write their flash ideas on the restaurant napkins.
Your business ideas don’t necessarily have to come to a restaurant, even right now, as you are reading this you can begin to pen down all the great ideas you have had for your startup or existing company. All you need to do first, is to choose the kind of business plan that will best communicate what you intend to do.
Most Common Kinds of Business Plan that attract investors.
Whether you are a startup company or an already existing one, you will need a business plan depending on your growth stage, funding needed and how you intend to secure these funds or in-house strategic development and planning, respectively.
These are some of the most common examples of business plans and what they mean for business.
1. Standard Business Plan.
As its name implies, the standard business plan or “external business plan” as it is also commonly called is commonly used by startup companies whose goal is to attract investors to financially invest in their business. This is a must-have for any business because no investor will pump a dime into your business without looking through your business plan.
A standard business plan covers important information, executive overview, company mission, outlining the problems your business is solving, marketing strategy, market size and what it means for you or your investors in terms of profit, value proposition and financial statements amongst other important elements of a business plan.
2. One-Page Business Plan
The One-page Business plan is commonly useful in situations where you’d want to ignite a conversation with a potential invention and spark their interest. Like the name implies, “One-page Business plan” basically consists of an executive summary where you clarify each of the important elements of your business plan into summary paragraphs, giving investors a quick look at the key takeaways.
The One-page business plan is a great asset when you intend to pitch your ideas to investors at first contact. Because investors are extremely busy people, it’s important to have a one-page business plan to help you set the pace for a conversation in a situation where you have only five minutes to pitch your idea and attract an investor or lose. If you do it right, you might have a chance for a more in-depth discussion about your business with the right investor.
3. Internal Business Plan.
Unlike the two kinds of business plans listed above, the internal business plans aren’t written for the purpose of sharing with investors. The Internal business plans are not to be shared or seen by anyone outside the confines of a business of the office. This particular kind of business plan is essentially useful as a guide for business owners to set and reach their goals.
Since this kind of business plan is commonly used by already established companies and not start ups, Internal business plans are geared towards outlining the business strategies, forecasting, budgeting and which milestone to reach next but less concerned about elements like Executive summary or value proposition.
5 Tips for Creating a Winning Business Plan.
Assuming you’re sitting at your desk right now, you’ve opened up a blank word document, and your hands navigate the white blinking cursor across your screen as you try to convince yourself that you’re capable of writing your own business plan. What business plan writing tip will you begin with?
For a lot of business owners, they’ve had their own moments of self-doubts; questioning their ability to write a business plan that can attract investors. In the end, they admit it’s a daunting task and that they’re incapable of achieving it.
The thing is, all you need to get started is an in-depth knowledge of what the important elements of the business plan is, how to write it and how to achieve a flow in your planning. Writing a business plan will no longer be a daunting task.
Let’s take a look at some useful tips to help you create a winning business plan that will attract investors.
A. Start with Market Research.
Never make the mistake of assuming you know everything about the market without conducting proper research. The research will help you become more knowledgeable about the market you will be competing in, businesses you will be competing against, the problems in your market, who your audience is, and how you will make money should always be your first step when creating a winning business plan that will attract investors.
Conducting market research will also help you understand how your audience feels about other products in the market, gives you an insight into production promotion and even production. Also, it will help you draw a conclusion to any assumptions you might have sustained about the market size or fit — a market research research will provide you with the needed data to aid in making decisions about moving forward or re-strategizing.
B. Make a Comprehensive Business Plan Outline.
In our next article, we will talk about some of the important elements to include in your business. Instead of assuming you can draft and write everything from your head, start by writing a comprehensive outline of each of the sections and subsections you need to cover in your business plan.
Before we release the article on the importance elements of your business plan, here’s a list of all: Executive summary, company description, problem, solution and market size, products (How it works) revenue model, operating model, market analysis, market segment, marketing strategy, customer acquisition, management team, traction, funding and financials.
By outline your business plan, you will make it easier for you to write about only significant and important details for each section of your plan.
C. Be Clear and concise.
Avoid making the mistake of sounding or using many ambiguous words when writing your plan. Remember that it is more important to use clear and concise words or sentences in your business plan. This helps attract and sustain the attention of investors and doesn’t leave rooms for misinterpretations that could hurt your chances.
By making your plan clear and concise, you are indirectly telling your investors that you value and appreciate their time and efforts by looking at your business plan. A business owner with a clear and concise business plan is like a hunter with a bird in hand and two in the bush waiting to be caught.
D. Illustrate using Graphs and Charts.
Simply because you probably failed mathematics in school shouldn’t mean that you get cold at the mentions of Charts and Graphs. Unlike in mathematics classes there are many software tools available today to aid you with creating the right graph or chart you need. These tools include Google Sheets, Microsoft Excel and Tableau amongst others.
Charts and graphs are useful for visual data representations, helping communicate a condensed section of information into a clear and concise manner when creating your business plan. Note that it is important to choose the right type of Chart or graph when visualizing your data. For example: take advantage of bar charts if you need to highlight the difference between items and when visualizing the essential changes expected to happen in the business over time.
E. Show your Financial Plan.
Arguably the most important part of writing a business plan is writing a financial plan. Investors are geared towards reading and analyzing your financial plan whenever they have an opportunity to review a business plan. They want to see if your business plan or financial projections reveal your feasibility of your company, your profit margins — to find out how profitable your business will be and interest their investment will yield.
Financial information contained in the business plan varies based on whether it’s an existing business or a startup. Some of the various important financial information to include in your business plan are, income statement, balance sheet, cash-flow statement, sales projection and break-even analysis. Because it is impossible to research the financial future of a company like researching the market, it’s important to note that some financial statements can be written based on assumptions or predictions.
Wrap
Creating a business plan is crucial when attracting investors to invest in an already existing business or a new one. A business plan would serve as a guide for your team and create an actionable roadmap for the business. It might also be the one thing that tells investors “That’s the business to invest in.” Keep in mind the three common kinds of business plan and only use each one where necessary. As long as you implement these winning tips, your business plan will help you attract more investors and investments.
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#Business Plan
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