Your business plan is your blueprint for success. As such, it is also one of the most effective ways in convincing angel investors to actually pour their money into your company, not to mention that your business plan can help you recruit people to your team. Fill it with errors and you can watch your company sink like the Titanic.
Here are a few dos and don’ts when writing your business plan. Nail your plan and you can nail the capital halfway with your business presentation and personal charm nailing it the entire way.
Don’t Be Everything to Everybody
You must not expect your business plan to appeal to every angel investor. Your business plan should then focus on one particular industry, model and problem with the aim being to appeal to your target angel investors. In short, don’t spread yourself too thin or you risk making a negative first impression.
Don’t Be Too Optimistic
Successful business is founded on being realistic about one’s chances in the market. Too high projections and you risk promising more than you can deliver. Too low projections and you risk being rejected because no investor will want to pour money into a losing proposition. Be sure to have all your facts and figures ready to support your request for additional funding.
Do Be Unique
Although you will find standard formats for business plans, you don’t have to follow them to the last letter and number. You can use these standard plans as references but you should strive to be unique in your presentation. Keep in mind that you are selling a unique proposition – your company’s business plan – so your goal is to stand out from the rest of your competitors who are also trying their best to persuade the same set of angel investors.
Do Take Your Competition in Mind
Few start-up companies face competition in whatever industry they may be in. If you fail to take into account the strong competition you are facing now and will be facing in the future, you cannot expect the angel investors to invest on your company. Your business plan should mention the competition as well as how you intend to deal with it.
Don’t Be Repetitive
Angel investors don’t the time to listen to your ramblings, both on paper and during the oral presentation. Keep your business plan and presentation clear, concise and simple so that your prospective investors can easily get the gist of your business idea. Plus, you often only have 15 minutes to impress investors so take advantage of whatever time you have to do so. We suggest avoiding the use of catchphrases while also using creative language and attractive imagery to give substance to your ideas.
Don’t Use Jargon
Fancy talk will not do the job. Most angel investors are either already well aware of the industry or clueless about it. If you use too much industry jargon, you risk turning them off for obvious reasons. Just stick to money matters while also showing passion and you should be just fine.
Start writing your business plan according to the abovementioned dos and don’ts. You will then be well on your way to persuading the angel investors to give you the money to achieve your business dreams.