Being a small business owner is a goal for millions throughout the world. But, while there are millions of would-be business owners, there are only a handful who are able to totally finance their dreams of becoming an entrepreneur. Even those that do may find themselves trapped when it comes to scaling up to keep up with their competition and the demands of the market. Bank financing including microloans, traditional lending, and possibly borrowing from family and friends are all viable options. Another option that should be considered when it comes to financing your business is developing a partnership with an investor.
What are investors looking for?
When seeking funding from an investor, it’s important to understand what they’re looking for. First and foremost, they’re going to want to see an investor business plan. No investor worth their salt will invest a dime into your business without first seeing a well-written business plan that maps out your goals, and more importantly, how they’re going to recoup their investment – with interest. Even if you have a relationship with an investor, it still pays to find out what it is that makes them tick and ultimately, what it’s going to take to get them to fund your idea.
Things Your Investor Business Plan Must Have
When it comes to investing in new business opportunities, investors can be extreme sticklers and your business plan has to be strong. There are several sections your plan will need to have including:
The Executive Summary
The Executive Summary is your first impression and can make or break the investment opportunity. You’re not going to get a second chance to make a first impression so be sure your executive summary is done right.
The Management Team
Remember, your investor is not just investing in you should they decide to infuse capital into your idea, they’re also investing in your management team. With that, it’s important that you put together comprehensive, balanced management team biographies as you look to build off of the momentum from the executive summary. You’ll want to include things like background experiences that align with the business you’re building, roles they’ll play, and the impact you believe their presence brings to the venture.
Financials
Investors are definitely going to want to see sound, realistic financials. When it comes to this area, the more details, the better. Profit and loss, cash flow projections, revenue forecast, and a clear understanding of where the funds you’re seeking will be spent should all be included in this section of your investor business plan.
Description of your business model
The who they’re getting into business with was answered in your management team section. In this section, give the investors a description of your business model. What makes it unique, what are your plans to remain competitive, how will you price it and maintain relevance as the market evolves? All these are questions that your business model section should effectively address.
A strong narrative
Every business has a story, and this section offers you the chance to tell yours. Tell them how it all started, where it stands right now, and most important of all, be sure to tell the investors where you see this incredible idea of yours heading!
Market Research
Market research is where you begin to bring the case you’ve made thus far home. Sound market research that supports your vision and the numbers you’ve presented will impress even the most skeptical investors and put you in a position to score much needed funding.
Investment Structure and Terms of Repayment
No matter how great your idea sounds in your head or on paper, investors are going to want to see how they’ll recoup their funds. They’ll also want to know if they have a say in the direction of the company aside from the capital infusion. Will they have voting rights? What are the actual terms of repayment including length and the interest they stand to gain? Finally, at the end of their investment term, what is the exit strategy, and is there an opportunity to re-invest? All of these important items should be covered in this part of your plan.
Get An Investor Business Plan That Will Help Your Business Succeed
An investor grade business plan is one of the first and most necessary parts of your funding journey. The Coley Group has crafted thousands of winning investor business plans for small businesses all over the globe. Our team of writers welcomes the opportunity to service your needs so when the time comes, feel free to contact us today for a quote.
