Prepare an Investor Ready Business Plan
Attract investors with the right kind of business plan
A business plan is a foundation, or rather a springboard, towards the establishment and growth of a new business. A business plan is an essential tool for companies raising capital—and your business plan needs to be investor-ready.
An investor-ready business plan is a document that has been professionally prepared to meet the needs of both venture capitalists and angel investors. They will want to see specific information in your well-crafted plan that allows them to feel comfortable investing money into your business. So, as you write this document, make sure to think with an investor's eye.
Elements of an Investor Ready Business Plan
There are many sections to a business plan. An investor-ready business plan demonstrates to investors that you are an expert in your industry, dedicated to the new company, and have a clear mission. An entrepreneur addresses these needs by preparing a comprehensive and detailed view of their business objectives and goals. Elements of the plan include:
- Executive Summary
- Business or Industry Overview
- Market Analysis
- Competitive Analysis
- Sales and Marketing Plan
- Owner and Management of the Company
- Operating Plan
- Financial Plan
You will also need to add any exhibits of supporting or background information that will help the investor make a positive decision. Consider adding a cover page and a table of contents section to make it easy for the reader to navigate.
Investors invest in management, not just ideas. It is very important that you express your knowledge, passion, and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions.
Market and Customer Business Plan Section
It is important to communicate to the investors that you understand the needs and requirements of your target customers. You must be clean in how you articulate your marketing strategy within your business plan. By defining your target customer base you let the investor see that there is a market need for your service or product. Write a description of the overall market for your product or service, along with the details of your projected customer base.
The investors need to know the reach and the kind of customers your product or service is catering to. You should be able to describe the need for your product or service in the marketplace, and how you will fulfill that need.
Sample Market Section of a Business Plan
Our market research in the local area indicates that there is a high demand for transportation services for seniors who are no longer able to drive but need a low-cost service to take them to shop, medical appointments, and social activities. Of the 300 seniors canvassed in our survey, over 60% of the respondents indicated a demand for this type of service.
Our solution is to provide a low-cost transportation service for the elderly within the city limits. Our drivers will be professionally certified, first-aid trained, and familiar with senior's needs and disabilities. We plan to introduce the service with two vehicles initially and expand through partnerships with senior clubs and extended care facilities.
Product or Service Description
A complete description of the product or the services you are offering should be outlined in detail. Highlight the features that make this product stand above those currently being offered. Focus on the benefits to the customer, the community, and the investor. Avoid the use of jargon but talk about the expertise in the field that your company can bring to the table.
This is where you talk about how much it cost you to make the product and what you will sell it for to wholesalers—including their markup potential—or directly to the end-user. Also, describe how you will deliver your products and how they will be delivered to the consumer.
One of the most important sections of your business plan is your marketing plan. This section will outline your sustainable competitive advantage to your investors. In a way, it assures them why you will succeed where others have failed. Comprehensive market research is required in order to do this - it is vital to have accurate information about the marketplace, the customers, and the competition. This section is where you include a definitive description of the:
- Customers (your target market)
- Market size - Estimate the size of the potential market in terms of the number of people or businesses that may be interested in your product or service.
- Demographics - Your relevant target market demographics, including age range, race, sex, religion, income levels, employment status, education, etc.
- Growth prospects - Is the market already saturated? What is the growth potential of your product or service?
- Trends and sales potential per product or service category.
The marketing plan is where the pricing, promotion, and distribution strategies are outlined and how they can directly influence the growth potential of each product or service. It is also important to include the future growth, market share and trend influences.
Barriers to Entry
Along with giving the details of what your product or service is and who your customers are, you also have to inform your investors how you will prevent your competitors from taking away your customers. The barriers to entry section outline your business strategy to keep your competitors at bay and grow in the market. Investors need to feel comfortable about the soundness of your strategy before they invest in your venture.