How To Create A Business Plan To Attract Investors

Having a good idea is not enough, you need a strategic plan to make the business successful. If you need funding, look for an investor with...

Having a good idea is not enough, you need a strategic plan to make the business successful. If you need funding, look for an investor with a perfect written plan of activities for your idea. 

The business plan is the basis for launching a new business initiative. It is the reference used to present the project to potential investors, such as a business card, which justifies and demonstrates the feasibility of a project. It must also be the management guide to guide the organization and establish the way of operating it.

How To Create A Business Plan To Attract Investors
Include the following sections in the business plan to attract investors:

1. Executive Summary

The objective of the executive summary is to capture the interest of potential investors, so it should contain a brief summary of key aspects of the business such as the opportunity to be developed. It is the first section, usually updated at the end because it provides an overview of all the other parts of the business plan.

The main elements contained in the executive summary are: The idea of the company, its differentiation on existing products and/or services. The target audience & the value of the product and/or service for that purpose. The current phase of product development, the necessary investment, and return on investment is projected to win.
Alos read: How Can I Get Funding For My Business?

2. Description of the company

This section includes the vital details of the enterprise, such as:

  • The official name of the company, registered in the state where the business was started.
  • Type of business structure: Sole proprietorship, LLC, partnership or corporation.
  • The names of the key people behind the company.
  • Location: Where is the company headquarters? Do you have branches?
  • Company History: When did the company start and what inspired its launch? What need do you have to fulfill?
  • Mission statement and vision of the company.
Also read: How To Create a Business Plan in Just 2 Minutes

3. Products or services

This chapter should clearly describe the products and/or services that the company sells, with an emphasis on the value it offers its customers. In other words, what is the need that satisfies: What does it serve, how does it do it, what benefit does the customer perceive? 
Specify the attributes and composition of the product, the elements that compose it, the way it works, if it consists of some mechanism. In the case of a service, what is the procedure under which the service is performed? Brand policy. In short, it is about exposing the catalog of products and/or services.

4. Analysis of the situation and diagnosis

This section of a business plan should provide a detailed description of the industry in which the company operates.

The analysis phase is based on the collection of relevant information. There are two primary sources for obtaining it:

  • Internal: It comes from our own sources or from within the company.
  • External: They come from abroad, available from public sources or on request.

Then the situation is analyzed from two points of view:

  • External environment: General and sectoral. Economic, socio-cultural, political-legal, technological, market and customer factors, competition, suppliers, substitute products, etc.
  • Internal situation: Strategy, organization, and resources. It is also convenient to do a departmental analysis or functions.

5. Development and operations

Every investor will want to minimize their risk, so you have to give a detailed explanation of the state of progress of the business idea.

Development: Phase in which the product is found (in development, which phase of development, etc.). If there is a prototype developed must be presented, or if it has been possible to test the product before a pilot consumer, the results must be submitted.

Implementation: It is necessary to make a plan of all the activities necessary to start up the company, where and how the product and/or service will be developed, agreements with suppliers, cost structure, as well as identify the real financing needs.
Also read: Factors to Consider Before Starting Your Business

6. Marketing Strategy

Regardless of companies size or the sector in which it operates, needs to develop a marketing plan to achieve success. The most important thing about a marketing plan is that it is action oriented to meet a need in the market and determine what you want to achieve, when and how. It is important to detail brand positioning, promotional activities, and sales force coordination and incentives.
Also read: 6 Steps to Determine A Profitable Niche Market

7. Management and organization

The management & organization section describes how the company is structured, presents those involved, details internal and external resources. Also, explains how the business is managed.

8. Economic and financial plan

The financial analysis section should contain details of business financing, what is needed for future growth, as well as the estimation of your operating expenses. Balances, budgets, sales projections and financial statements should be included for the next 2 to 3 years. If the company has not yet reached its break-even point, it should include such analysis.
Also read: 5 Mistakes to Avoid When Starting a Business

9. Risks and exit strategy

In this part, it will be important to differentiate two types of risks: those of the market and those of the business itself. It is important to include concrete measures to address these risks and an alternative valuation of the company if some of the key parameters of the model vary; Such as user growth rate, etc.

10. Attachments

The appendix includes information that supports the assertions, assumptions, and reasoning used in the other sections of the business plan. This section may include customer letters of intent, graphics, tables, statistics, photos, marketing materials, research and other pertinent data.

Also read: 

  1. How to Start Your Own Business From Scratch In 6 Steps
  2. 8 Options to Start a Business in the USA for Foreigners

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