A business plan is the foundation of any organization. It dictates what the company stands for, how it garners capital and how it churns revenue. Business plans differ according to their purpose. An internal business plan is just for the organization’s own use and won’t be as complex as the one you will present to lenders, sponsors or investors.
What’s an Investor-Ready Business Plan?
An investor-ready business plan is what organizations present to venture capitalists, angel investors and sponsors to encourage them to invest in it. It’s a bankable business plan which is made keeping the investors’ perspective in mind.
The investor-ready business plan is a demonstration of your expertise and potential, and highlights your mission. Entrepreneurs know how important investments are and exert details into their business plan to pitch forward.
What Features Make An Investor-Ready Business Plan Successful?
The investor-ready business plan is supposed to draw investment towards you; this means you have to put your organization’s best face forward and demonstrate great expertise in what you’re planning to pursue.
The Goals of Your Business
Every business has its goals. A company may stand for certain values and their projects and ventures are simply extensions of those goals.
It’s important to highlight what the goals of your organization are and how your venture aims to come close to achieving them. This means breaking down your goals into long-term and short-term goals to show investors that there’s minimal risk.
Investors like to know who they’re working with, and whether the management is competent enough to produce a successful turnover. It’s important to express your knowledge on the project, as well as your dedication to it.
Expressing passion and competence are also important for investors to gauge how strongly you will work towards making your venture successful. It’s a way for them to gauge commitment, quality of the team and whether you’re worth investing in.
The Venture/Project Description
The star of the business plan is the venture/project, of course. A detailed outline of what your venture looks like should be accompanied by the market details. Investors also want to know about how stable and voluminous your customer base is and whether the market is in favor of your venture or not.
This demands extensive research and proof to back up your claims. No one wants to invest in an “almost” successful venture.
Show your investors a model of revenue and strategy to show them a good estimate of what your venture needs.
A bankable business plan charts out costs for operations, marketing strategies and other factors that will help investors see that the business venture/project is worth investing in.
Your Marketing Strategy
Investors want to know how you will market the product to reap profit and revenue. Outline the sustainable competitive advantage your investors will have while working with you. This section of your investor-ready business plan should show that your product is going to reap benefits for a long time, and that it’s adaptable to trend influences. You should also outline:
- Demographics of your customer base
- Prospects of growth
- Sales potential per product/category
- Market size
- Pricing lists
- Promotion strategy
Resources and Time
Charting out resources and the time frame of your project are important to some investors. A rule of thumb is to assume that it will take your venture 15% longer to set up than the time you’ve stated otherwise.
So be realistic about your available resources and capital, and also present a realistically thought out timeline.
Payout Options for Investors
Discuss how your investors can get involved in your business. Some investors like a hands-on role, while others prefer to be board directors, while some like to invest from a distance.
But what they all want to know is how they will get their money back and at what rate of return. Your plan should be sound enough to assure them that their ROI will be a solid one.
Prove Why You’re Worth It
Investors want to know why they should invest in you, and your business plan should provide them with various reasons. If there are prototypes, samples or successful trials of your venture/project, use them to show why your business plan is going to be more successful than your competitors’.
Including all variables, like samples, can help incline investors even more towards your venture.
Barriers to Entry
Besides highlighting the successes of your venture, also highlight how you will tackle competitors and retain your customers. Barriers to entry are a cause of concern for investors, and it’s your investor-ready business plan’s job to assure them that you have effective strategies to deal with competitors and keep them at bay. Usually, this means doing extensive research on your competitors and finding out ways to one-up them. This means your plan must demonstrate a concrete and sound strategy to make investors feel comfortable.
An Investor-Ready Business Plan Is Worth Investing In
Entrepreneurs should not forget that a business plan is the written description of its organization’s future. One must not forget that a business plan is not bulletproof and is also prone to changes.
The most bankable business plan for investors is the one which highlights the successes of the organization and the new venture, and how the entrepreneur plans to take it into the future. It should address all concerns an investor may have and make them comfortable.
And, ultimately, an investor-ready business plan should iterate faith in your organization and project. If you’re ready to get your business plan together, call the experts at BryteBridge at 407-857-9002.