In order for any business to grow and evolve, it needs financing. For some, that means taking out loans through traditional banking institutions while, for others, it means finding investors to support your company. But how do you get those investors? One way to gain them is to impress them with your business plan which includes finding customers, improving your service or product, and growing the business over the course of several years.
Entrepreneurs around the nation are always on the hunt for investors for their business. According to HackerNoon, “Searching for an investor is not easy, especially when there are high chances that your idea might get turned down. Looking to raise funds is an entrepreneur’s version of taking a job interview where you need to say the right things at the right time.”
The Role of the Business Plan
A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it. Most business plans are written to not only impress investors but also to provide direction to a young business hoping to be successful. The U.S. Small Business Association (SBA) suggests having the following categories:
- Executive summary – a snapshot of your business
- Company description – describes what you do
- Market analysis – research on your industry, market and competitors
- Organization and management – your business and management structure
- Service or product – the products or services you’re offering
- Marketing and sales – how you’ll market your business and your sales strategy
- Funding request – how much money you’ll need for the next 3 to 5 years
- Financial projections – supply information like balance sheets
- Appendix – an optional section that includes résumés and permits
These categories will be able to tell your potential investors a lot about who you are as an entrepreneur and what your company will look like in action. The more concise and consistent you can be in this plan the more you will reassure investors that you have a well-thought out plan for your business, its services and/or products.
In order to let investors know that you have done your due diligence in researching your field, be sure to include charts and graphs that make it easier for investors to grasp the projected evolution of your business financials. In addition, you will want to demonstrate that your projections are achievable and not just a pipe dream.
Investors like to know that every conceivable issue has been hashed out, so be sure to include possible challenges and how you will overcome each one. Look ahead a few months into your company, a year and then several years to find potential obstacles. That means you will need to be as honest as possible in revealing what you see as your potential strengths and weaknesses as you start your business.
Do you need help writing your business plan or finding ways to impress your investors? Check out our workshop on Creating a Business Plan that is Investor Ready or Understanding your Business Financials.