You are probably wondering why you have never received a response from the investors, whom you sent your business plan to.┬á You have probably realized that your business plan probably failed to get the message across.┬á┬á This could very well be true.
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There are several reasons why your business plan can fail. Some of these reasons are more clearly discussed below.
A. Not showing competitors who are successful can be one of the primary reasons why business plans fail. Many entrepreneurs over emphasize the uniqueness of their product and pride gets into the way of success. You cannot over emphasize the uniqueness of your product. You should always list your competitors and you need to prove to the investors how you are able to convert potential clients of your competitors to buy your product instead. Competition is healthy in business and investors also know how the market works, so it is hard to convince them that you do not have any competition, hence they will not look at your business plan seriously.
B. Making the message to complicated and difficult to understand can be another reason why your business plan can fail. In many cases investors cannot understand the message of your business plan and cannot get a baring on how your company will function in the industry. The message of your business plan should be short, concise, and to the point. Make your point clear and clearly and simply lay out what your company does, what your product is and how it will stand up to the competition.
C. Lack of customer knowledge is another key pitfall of your business plan. You need to research your customer base. it is very important to for you to research the industry that you are in and you should research your competitors. Many companies give out customer surveys and these can be excellent research tools. Look at surveys of your competitorΓÇÖs products and see what the weak points and strong points of your competitor are. Take advantage of your competitionΓÇÖs weaknesses and try to develop your product accordingly. All this needs to be addressed in your business plan and you should also have a good understanding of your customers needs and how you can address them.
D. Not requiring your investors to sign non-disclosure agreements can be fatal to your business plan. It is always a good idea to hire good legal counsel and have a licensed attorney draft a non-disclosure agreement to protect any patents, intellectual properties, and trade secrets. You could be consulting an investor who funds your competitors and imagine what a treasure trove that can be for your competition if you have a superior product for them and itΓÇÖs up for grabs. A non-disclosure agreement is a legal binding document that would require the prospective investor not to reveal any of your trade secrets if there is a conflict of interest.
There are many more reasons why business plans can fail and you should carefully work and research the plan before you even present it to investors. Remember, your business plan is the roadmap of your business and everything in it counts.
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