We cannot overemphasize the importance of a well-written and well-presented business plan. It can help you in raising capital, in recruiting top management men, and in taking your business to the next level.
Arguably, the matter of raising capital from angel investors and venture capitalists is the most important use of the business plan mainly because investors are the toughest nuts to crack in the business. Remember that these individual and organizational investors are taking high risks with their money in their decision to invest in your company. You will require all the persuasive skills you possess and it starts with the business plan.
So, what exactly must be included in your business plan? We suggest the following must-haves.
Think of your business plan as your resume for a job interview. As with any resume, you must attach a cover letter that states your business in a few words while also drumming up interest in the next pages. Be sure to include your contact information since opportunity comes knocking once and you don’t want it going away because of a common error.
In the cover letter, you should also summarize the highlights of your business plan. These highlights can include your past milestones, present performance and future projections in as few sentences as possible. Take note that, if you have 15 minutes for the business presentation, you only have 2-3 minutes to impress angel investors with your business plan on paper.
Now let’s get to the meat of the matter, so to speak – your business plan. You will find many standard formats for business plans that you can use as a guide but make sure to make your own unique business plan. Stand out from the competition but do so in a positive manner.
We suggest the following aspects of a business to be included in your plan:
- Team – It is people who make the business move. Your team should then show that it is capable of achieving the company’s goals. If you have well-known advisors who consent to your using of their names as references, then mention them in your business plan since it adds brownie points.
- Problem and Solution – Your business plan must show a problem such as an unmet need and then present your solution. We are not just talking of creative words here although this approach will help in fleshing out your business idea. We suggest also focusing on facts and figures because this is business.
- Sales and Marketing – You may have a great business idea but if the target market is too small, then you are less likely to get the funding from the angel investors. You must then include sales and marketing projections and strategies to attract and then retain customers on your side. If you already have the sales to show for it, then highlight this achievement.
- Business Model – Angel investors and venture capitalists want to know how they will get their money back through a viable business model. Thus, you should show the income streams for your product or service.
- Finances – And of course, you want to show possible investors your financial statements. This is the language of business, after all. And when you have your business plan in place, your nest step is polishing your presentation but that’s another story altogether.