How to Get Investors to Trust Your Business Plan

When you are an entrepreneur who needs investment capital, it is important that investors view you as knowledgeable, reputable and proficient. Depending on a very few critical details, your business plan can either back up or fail to prove that you have these necessary qualities.

A majority of entrepreneurs are aware of what should not be included in a business plan. These are usually common and tired phrases such as “Our competitors do not exist, and our management team is unbeatable.” However, the following 5 suggestions are ideal examples of what should be included in your business plan in order to seen as reputable. They give venture capitalists reasons to take you very seriously.

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1. Be Realistic. In terms of your financial projections, ensure that they are clearly defined and obtainable. Be positive, but also realistic when you look at your income statement. Pay special attention to your year-to-year growth and your profit margins. If anything looks too amazing, then it probably is. Go through and tone down some of perceived projections to a point in which they are more realistic. Also, remember that things will not always turn out the way that you planned them.

2. Look at the entrance barriers. Often this is ignored in a majority of business plans. You will receive more credibility and respect in the eyes of your investors if you can prove that something is real other than a “first mover advantage.” It is well known that a first mover advantage will only exist and stick around until there is a second mover.

3. Identify, examine and clarify the needs of your customers. Prove to investors that you have researched your market.
Utilize as many credible third party resources as possible to prove how your company supplies market demand.

4. Discuss your target market, not the entire market. This is an everyday error when it comes to healthcare business plans.

The healthcare field when defined in broad terms is worth about one trillion dollars. However, that does not consist of everything within the medical industry. When a business plan is written, it should provide an attention grabbing statistic, but ensure that the given statistic is related to your target market. For instance, citrus-flavored soft drinks with caffeine only make up a small portion of the soft drinks that are produced in the world.

However, the market size for this particular item would be especially important to an investor.

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5. Make your investors take notice of tangible highlights and accomplishments. Have you been a success in previous years? If this is the case, investors will also trust your ability to become successful in the future.

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