A business plan presents the business idea for planned start-ups and provides investors with comprehensive information. It can also be necessary for existing companies to attract larger investments. Therefore, always draw up your business plan in detail and with great care.
When trying to convince investors it is important not to overemphasise the product from your – the service provider’s – point of view. While the business idea can be revolutionary, you will only spark the investor’s interest if the targeted market shares your enthusiasm. Therefore, you should clearly emphasise the customer benefits created by your project in the business plan.
Financial investors will only be interested if your idea allows them to generate sound profit margins when selling their investments. Therefore, you should show how important the success of your business is for you, but never let it overshadow how much it could mean for the investors.
After also introducing the founding team, explain who your customers are and why they will buy your products or services. Back up these claims by presenting the market research you have conducted or quoting customers willing to buy your product. Also show why customers would choose to buy from your company rather than an established one. Carry out a strengths and weaknesses analysis and, for any weaknesses identified, explain ways to address them in order to minimise the risk for investors. Existing market barriers to entry and ways to circumvent them should also be outlined in the business plan.
In addition, make the weaknesses of your competitors clear and describe how your company is superior in these areas. Also highlight how you intend to promote your product so that customers prefer it to those of your competitors.
Let potential investors know what they can expect from an investment in your company and why the time and money invested will pay off. However, make absolutely sure that the calculations you present are realistic and that the financial plan is not too optimistic. While higher profit margins are naturally more attractive, you have to present them to the investors in a plausible way.
Finally, it is advisable to write the Executive Summary, a summary of the key points of your business plan. This is usually at the beginning of your business plan and is crucial in attracting investor interest from the outset.