If you’re hoping to get funding from investors to launch your business, they’ll likely ask to see your business plan in order to be confident that you have the right business model, marketing strategy, and budget. However, many first-time entrepreneurs don’t know how to create a business plan or think that their idea isn’t ready for funding if they don’t have everything in place yet. This guide will help any entrepreneur present a compelling business plan for investors and get the funding they need to launch their business the right way.
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There are many aspects of a business plan that are unique to its investor audience, so it’s important to tailor your plan accordingly. A well-written plan will leave them feeling assured about their abilities and impressed with their readiness for the future. The five key components investors will want you to have in mind are a mission statement, background information, product or service information, management team, and funding needs.
Market Research, Target Audience, and Demand
The first step in creating your business plan is research. By mapping out who your target audience is and how they find you, you can better set your marketing budget, create demand for the product or service, and formulate an effective PR strategy. Once you’ve created a solid understanding of your target audience, it’s time to identify the best way to reach them.
Costs, Profits, and Funding Needs
Your plan should outline all the costs of running your business, the profits you expect and how much funding you will need. You can use this as a financial tool for investors, who will be more likely to trust your idea if they see what you need in order to make it work. It’s important that you make it clear at this stage that while this is just an estimate and things could change based on external factors, investors want to know that they’re not going into something blindly.
Legal Documentation and Contracts
If you want to use investors’ money, you will need a detailed plan of how and when you are going to repay the funds. In order for your investor plan (also known as an offering document) to be accepted by anyone, it must have an executive summary, company overview and complete financial projections.
Reaching investors can be one of the hardest parts of starting your own business. With these five tips, you can learn how to make an investor-ready business plan they will love.
Plan Ahead – As with anything, it’s best to plan ahead and start by deciding who you want your business to appeal to, what is their pain point and what benefits do you offer that are not currently available in the market.
Your business plan doesn’t have to be complicated. Even though you may think it is, don’t let the fear of writing it stop you. The more organized and detailed your plan is, the better investors will see it as a worthwhile investment for them. It’s always better for your idea if you can show how its risk has been mitigated in advance. It’s also much easier to revise or update your plan when needed than to start from scratch.