Although money, connections, experience within the industry and record of previous sales are all important to getting funds into a business, any or all of these things can be removed from the list and you can still get investors. The one thing that can not be missing is the business plan.
Below are some tips on writing a business plan to communicate to investors that you have a chance at running a successful business. This article will be using a business plan format which is endorsed by the Small Business Association (sba.gov). This article also assumes that you know the basics of how to write each section.
Executive Summary
Consider hiring a copywriter for this part of the business plan, because if this is not well written and engaging, your investors will not even get to the meat of your plan. And even though this is the first section of any business plan, many of the better written business plans that are around and which actually got funding wrote this last, as it is essentially a summary of the rest of the plan.
It is good to have an analysis of competitors that you will have upon entering the market at the financial level that you are asking for. Do not worry about small business market analysis if you are asking for enterprise level funding. Although it is good to have a working knowledge of markets below that which you are aiming for because people may decide to give you less funding than you initially asked for as a test.
Company Description
Do not be overly optimistic in this section. It is completely ok to present a rosy picture, just not an unrealistic one. Investors can tell when the hard facts do not match with the description, and believe me, they will be cross referencing this section with your financials if they are seriously considering your proposal. Keep your focus specific.
Organization & Management
Now is the time to brag on all of the people that you know, but make sure that your organizational structure is tight and duties are absolutely defined.
Service or Product Line
Describe here how your service or product line is different from anyone in the industry. Be very specific about which niche in your industry that you will be targeting. Do not make broad statements, but state exactly how you plan to get your target market interested in you.
Funding Request
It is definitely a good idea to ask for more than you need here and think big, and have a scaled back plan ready if your investors are not ready to go in all the way. However, do not present them this scaled back plan first. You have to have some room with which to negotiate.
Financials
Make sure that every penny is accounted for and make sure that it is abundantly clear how and when investors can expect their money back.
Appendix
Spell check, fact check and double grammar check this section. Many investors will have employees fact check your appendix.
James has been involved with small business for several years, he writes for smallbusinesswizardry.com and other blogs on the topic of small business planning.
Featured image courtesy of RambergMediaImages.
