What goes into a well-documented business plan to persuade an investor to pay attention?
Business Model: If you don’t know what your business model is, how do you expect your investor to understand it?
Products & Services: Include the exact products and/or services you’ll be offering, the target markets you are aiming at, what you’ll be charging, and what the market will bear as prices for those items. The more specific you can be, the better.
Competitive Advantage: You must show why someone will buy from you instead of the other guy. Just being a nice person or saying something like “We’ll offer great service,” doesn’t cut it, because everyone says those things. What’s different about your company?
Marketing & Sales: How will you get the word out about who you are, what you sell, and why someone should buy from you? Don’t just have “Social media” on your list, but itemize your strategies, budgets, and timelines for using various marketing tools (traditional as well as digital)
Scalability: Do you have potential to grow REALLY big? If so, how will you do it? If you want someone to invest in your business, they’d better see a reward for putting up the money
Research: A business plan without proper research about the marketplace, customer profile, and competitors is useless, but great research will make the plan both exciting and viable
Strategy: Everybody has great ideas, but the ones that get implemented have strategies that make sense, bring in the right people, and operate within budget and on timetables that make sense.
Realistic Financials: This is the most important section of your business plan. The financials must be realistic with a rationale. Before anyone will invest in your business, they’ll be double-checking your math and your assumptions. COUNT ON IT!
Finally, don’t prepare your business plan to impress investors. Build it to reflect your idea and use your research to rationalize the validity of the idea. Never base your conclusions on hunches and beliefs, but prepare the overall plan to build a business case that’s appealing.
All of which is a fancy way of saying that a bad business plan can ruin an excellent idea.
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