If you are looking for angel investors, VCs, private equity firms, and/or debt capital for your new business your business plan is by far the most vital part of the presentation that you will provide.
Any investor who is prepared to know more about your business is going to require your business plan. Provided that you retain the interest of your potential investors they are going to view your whole business plan sooner or later. Depending upon the way in which you present your business in the plan the investors will form an opinion not only about you but also the growth potential of your business.
Prior to investing capital in your business a VC will first look at a host of specific info regarding your business. They need to know if your business is about to grow rapidly and will progress toward an exit or payout for the investor.
Any good business plan needs to have an executive summary; company, industry, customer, and competitive analysis; marketing and operations plans; description of the management team, the financial plan, and an appendix that properly outlines supporting information in the form of charts, illustrations, and descriptions of proprietary technologies.
Of course this might seem daunting so to make it a bit easier the following 3 questions all require answers in your plan:
1. Does the business satisfy a market need?
In other words, what is the need? What do the consumers need and for that matter, who are they? Your plan needs to show the investor that you are precisely what the consumers require. You have to provide the necessary proof that people are clamouring for just such a product or service as your business is going to provide. In this way you will garner the interest of the investors and they will have confidence in your business’ capacity for rapid growth.
2. Is your management team geared for success?
You cannot rest your argument purely upon the genius of your business idea. You need to prove that both you and your management team possess the necessary skill and track record to guarantee success. Draw attention to the different members of your team who have already proven themselves as far as growing companies at the same level as yours is concerned for example: start-up, the research and development stage, hiring, product release, initial revenues, and advanced phases as well.
3. Are your pro forma financial statements realistic and verifiable?
These statements are the projected financial expectancy of your business as you will present it to your potential investors. This is a great way to really confirm the realism of your business plan because, as Growthink states in their business plan guide: “The figures used in these statements flow from the analyses in every other section of the business plan.”
Use the questions one and two as oracles for everything that you write when you prepare your plan while the third one should be asked whenever you have completed a draft.