A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.
Not all business plans are created the same way. A business plan has to be tailored to the needs, the type of business or the purpose of the plan. A plan for internal use will look drastically different from one you plan to submit to investors. If you are going to send your business plan to potential investors and attract their interest, you need to tailor it to them.
Writing an Investment-Ready Business Plan
An investor-ready business plan will tell venture capitalists and angel investors what they need to know to decide whether or not to invest in your company.
The investors, both VCs and angels, are risking their hard-earned capital by investing in your venture in the hope of long-term returns worth many times their original investment. They will want to see a well-executed, investor-ready plan that demonstrates that you have a clear mission. Here are some of the things your plan should address.
Investors invest in management — not ideas. 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 factors that investors look into before making their investment decisions.
Your product or service.
Describe in detail the product or the services you will offer.
Communicate to your potential investors that you understand the market for your product or service, know the needs and requirements of your customers, and can meet these needs.
This section will outline your sustainable competitive advantage to your investors. You need to assure them that you will succeed where others have failed. Include a definitive description of your customers, market size, demographics, characteristics, growth prospects, trends, and sales potential per product or service category.
You will also define your pricing strategies and describe how pricing will influence the growth potential of each product or service. Include the future growth, market share, and trend influences.
Barriers to entry.
The barriers to entry section outlines 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.
Download the Investor-Ready Business Plan Template and edit to suit your needs