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Investor Business Plan

Significance of an Investor Business Plan

An Investor Business Plan is a proficiently and competently prepared document to meet the needs of the investor angels and business investors. The business plan is the keystone in the setting up of the business and also in its growth. It is an indispensable tool for companies raising capital. Investors risk their hard earned money by investing in any business venture and in the hope of long term returns that would be worth several times of their original investment. An Investor Business Plan is a proof to the investors that you are an expert in your industry and that you have clear goal and objective. This is an important part of every company’s strategy and is more than a financing tool. It is a roadmap that to a large extent determines the success of any new or existing business. Venture Capital and Angel Investors have the need of a professional business plan before starting any discussions or taking any kind of investment decisions. In case the company is planning to expand its business venture internationally, it can initiate the process with a global business plan. This requires the executives of the company to indulge in a great deal of planning. This is important from the viewpoint of shaping the business in the right way.

Points to be kept in mind while formulating the Business Plan

Some factors that should be kept in mind while formulating a business investor plan are as follows:

Company Management

We generally find investors investing not only in the idea but also the management. Hence, it is extremely important to put across your information, data, passion and dedication to your business in the finest manner. It is vital to present the expertise and efficiency of your team along with their experience and commitment levels in the best possible manner. These are some of the factors that the investors look into before making their investment decisions.

Client Requirements

It is significant to let the investors know that you comprehend and at the same time recognize the needs and requirements of your customers and to clearly express about your marketing strategy within your business plan.

Explanation of the Product and Services

The business investor plan should give a clear and full description of the product or the services that are offered by the company in detail. It is important for the investors to know the details of the customer base and the kind of customers that they would be servicing to.

Marketing Strategy

Another major area of the business plan is your marketing plan. In this section the entrepreneurs can include a definitive description of its customers, size of the market, demographics, features, growth prospect, tendency and sales potential of each product and services. It is here that the pricing schemes are stated and how they can directly influence the growth potential of each product or service. It is also vital to include the prospects of growth and market share in this part of the business investor plan.

Attributes of a Good Business Investor Plan

It is important to remember that a good business investor plan can do wonders to the business. One of the most important points to be kept in mind is that the plan should be simple. A business plan that runs into pages and pages is highly unappealing to the investors. The investors are concerned about the commercial viability of the start-up. This explains the need to create a simple business plan that emphasizes the key factors of the venture.

How to write Business Investor Plan

Writing a business plan can be a tremendous task. Following are some of the steps that can be considered while writing a plan.

Type of Audience and the kind of Funding: While writing a business plan, it is important to remember and also decide as to who will be reading it. This will greatly shape the business plan. It is significant to determine whether to go for debt or equity financing. Every form of funding for the business will have its own share of merits and demerits. Writing a business plan for investors would require thorough analysis and complete details of facts and figures. While writing a business plan for the bank focuses with the bank's concern with risk.

Summary of the Business Plan: The outline of the business plan should be set up prior to the actual research and writing of the business plan.

Research: After deciding upon the kind of audience it is important to conduct research. The research of the Business plan should broadly cover the following key areas:

  • First and foremost your own working experience will be immensely useful. Careful observations of the industry you are entering is very important.
  • It is essential to have all the available information on the market growth, customer profiles, and also a clear picture of the industry you are venturing into, from a wide variety of sources. These sources might be the libraries, Internet; or may be collected from paid database services.

Investigation: The next step after collecting the bulk of data is to start analysing the data. The entrepreneur should am at developing a competitive profile, emergency plan and also risk assessment.

Financial Part: Next comes the financial aspect of the business investor plan. It is important to work closely with the accountant to develop reasonable predictions. In your enthusiasm, it would not be right to be excessively optimistic with your investors.

Summary: After all the sections of the investor business plan have been thoroughly completed, start working on the summary. Draw attention to the key points and incorporate the return on investment or the requirements of payback of the loan.

Review: It is important to remember that a well-written business plan can open doors and either make or break the future prospects of any business venture. Hence it is extremely important to revise and review the plan several times. Ask others for feedback. Make sure to edit and proofread it repeatedly.

Business planning is not easy but by following the above mentioned steps of writing a business plan, you will make sure that your business has a chance at funding and success in the future.