How to Create a Persuasive Business Plan

A solid business plan takes more than a great idea; it needs solid data to convince investors. This may not be what you want to hear as a creative entrepreneur. However, as a businessperson, you should also have the ability to do the research you need to back up your ideas and show investors that yours is a business which is well worth backing.

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There are three major points which are the foundation of any solid business plan.

1. Market Research

What investors will want to know first and foremost is your company’s growth potential. Because of this, your market research needs to demonstrate that there is a growing demand for the product or service you plan to provide and that there is an unmet need in the marketplace.

To back this up, use reliable data from independent, reputable research groups, trade organizations , government agencies and educational institutions. You can also use interviews and customer surveys as primary research. As secondary sources you can use books and articles by leading figures in your industry.

2. Qualified Management Team

To use an analogy, investors are betting on the driver, not the car. Your management team and their experience is often more important to investors than anything else. Detail their track records, including any relevant experience. You may also want to provide evidence including positions held in the past, even in other industries as well as awards, degrees and certifications.

3. A Realistic Exit Strategy

What investors are looking for is a projected IPO, buyout or merger which will allow them to reap a return on their investment. It can be difficult to explain your exit strategy, since investors are (justifiably) leery of businesses which guarantee a liquidity event like a buyout or IPO; this makes you look naive and undermines your credibility. To avoid this, use case studies of similar companies who have succeeded in reaching an IPO, merger or buyout using a similar strategy and include this data in your business plan.

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You should also do some research on larger businesses which have a track record of buying companies similar to your own. Investors will want to see that there is a reason why these larger companies might want to buy your business or enter a merger instead of producing the same product or service in house.

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