Imagine this – you need funding for your startup. What do you need to show to investors in order to get the capital that can jumpstart your business?
The answer to that is a strong and convincing business plan. A ho-hum business plan will not go far with your investors because they want to know how feasible and how profitable your business idea will be. If you can’t show that, then you can kiss your idea goodbye because most likely, no one would want to invest in an idea that does not have realistic operations, strategies, and projections.
So how do you write a successful business plan? Here are some tips to help you get the attention of your investors.
Write the business plan yourself.
No one knows your idea better than you. Right from the start, what you should do is to take ownership for writing your own plan. You can do this by starting with your idea – what is the product or service you will be selling? After that, you have to do the market research to see if there is a niche or a market for your idea. If there is, then you’re in luck because you are sure that your product will be sold to someone. If there’s none, then you should start thinking about what you can bring to the table that will give value to your intended market.
As the owner of your future business, this is good practice because you will learn to think in-depth when it comes to your business idea. You will also learn how to strategize in terms of marketing, sales, operations, and finances.
Discuss with a group of people.
Now that you’ve written the first draft of your business plan, it’s time to discuss it with people – consultants – if you may. These people will give you their own take on your business plan and ask pointed questions about the feasibility of everything else. Consider this a good thing because before you present your plan to the investors, you’ve already taken care of loopholes or possible unexpected changes in the market.
Moreover, showing this to people who are experts in the field can help you gain valuable insight on how to make your business more realistic. Of course, it’s easy to come up with an idea. However, you still have to show your investors the reason why this is a good idea. You would need solid strategies and finances for that.
Look at it from the perspective of your intended audience.
For business plans, form follows function the same way that a speaker adjusts to the audience. If your audience is investors, then your business plan should be similar to a sales document where you will be pitching your big idea and emphasizing the takeaways your investors will have.
It is advantageous if you include competitors in your business plan. This will show your investors your unique selling proposition as compared to the others in the market. If your USP gives more value to them, then the chances of you getting funds will be higher.
Since your business plan will essentially be a sales document, avoid overselling your idea to the point that it does not look realistic. Investors know if you are overdoing it, and if they notice this, it could mean them shutting your idea out.
Be aware of your costs.
When it comes to your finances, high revenues are not the main thing your investors will look at. Revenues can be superficial and they can also be blown up to show that your business will be a hit to your target market. However, what you should be concerned more about are your expenses. How much is the cost of goods sold? How much are your fixed and variable costs? These things are important because your investors will look at how much you can still earn given your expenses.
As a startup, you should be able to show how you will minimize costs. You can do this by streamlining your supply chain and making it efficient.
A lot of startups struggle for capital and that is typical. What makes it more difficult is how you will be pitching your idea to show investors that your business is worth their money. At the end of the day, if they can’t see value in it, then your target market probably won’t either.