Wednesday, December 6, 2017

How to create a compelling business plan to attract investors

A business plan is vital for attracting investment. If you can’t present a professional plan containing all pertinent information, then it’s unlikely that you will be able to attract the calibre of interest you need.
In order to attract investment, you need to include specific information, along with a well-written, comprehensive executive summary. Here’s my suggestions of what you should include in your business plan.
1. Cover page – This should include your company name, clear contact information and your branded logo. Make sure it looks professional and is designed properly. You don’t want to seem amateurish, even if it is your first business. There is plenty of help available online if you need guidance on your logo.
2. Table of contents – It’s important to clearly show where investors can skip to the information they’re interested in. While you may be presenting the business plan in person, helping them navigate the document when you’re not in front of them is very important. It will not only guide them towards what they need to know, but also show that you understand how to communicate effectively.
3. Company background and summary of opportunity – A succinct history of your company needs to be well-written and should include all relevant information without being too wordy. Also in this section, you should outline the market gap your solution is filling. Explain your company’s value proposition – why should they want to invest in you?
4. Expand on market opportunity – Answer the following questions: Who are your customers? How will your company make money? What role will you be filling for your customers? What’s the demographic you’re aiming to attract? Include the following:
  • Research into your market and the wider industry. This should cover market size, segments, the niche your product will slot in, any challenges you’re facing and the market’s prospects of growth.
  • You should demonstrate that you understand your competitors and the challenges they will pose. Describe the competition’s products, channels of distribution and pricing. A competitive matrix that shows the advantage your product has would be useful.
  • Outline your target customer and include any testimonial information you may have.
  • Outline your sales and marketing strategy and how you will reach your customers with your product. Provide a revenue model and describe in detail the sales process. This should include your marketing communications plan.
5. Services and products – Describe your service or product in detail. Include screenshots and photographs if necessary. Outline how your product can be scalable, whether you have launched yet or not. You should also describe the next steps of research & development you have lined up. Include information on your IP (intellectual property) plans and technological partnerships.
6. Your team – Investors are trusting you with their money. Highlighting the fact that you have carefully considered your team and recruited the best people possible is advisable. Include a list of board members, any advisors you use and service providers, as well as any key roles that are up and coming.
7. Financials – You should outline your main assumptions surrounding financials for the business over the foreseeable future. This needs to have specific examples of different scenarios.
8. Funding sources – If you have already had some investment, describe who from. Include any debts, cash from operations and total monies raised so far.
9. Use of proceeds – Outline how you intend to use the funding. Include sales and marketing, R&D, recruitment costs, salaries for employees, any new equipment you will buy, legal and accounting services, and the total you want to raise from outside financing.
10. Milestone timeline – Detail the steps your team is taking to build on the value of your organisation. This should include key hires, any new financing, sales milestones, product launches and any strategic partnerships in the pipeline.
11. Appendices – The end section should contain all relevant information that hasn’t been included already. This should include histories of founders and key management, any patent information and testimonials from customers.
If you follow these tips then you won’t go far wrong with your business plan. It’ll be in perfect shape to approach potential sources of funding. Good luck!
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