If you’ve ever considered raising money for your business, you know that the first step is to present your business plan to potential investors.
A well-written and well-presented business plan can impress investors. After all, if you’re asking someone else for funding then they must know what they’re getting into — and what makes their investment worth the risk. Here is a guide on how to present a business plan. Let’s check the details. But before that, we need to know the definition of a business plan.
What is a Business Plan?
A business plan is a written document that describes the nature of a business and its future goals. It also contains the history of the business, financial information, and an introduction to the management team. A business plan is used to present these goals to investors and lenders.
The Importance of a Business Plan to Investors
A business plan is important to investors because it gives them an overview of your company’s financial situation, management team, and how you plan to grow. It is also one of the most effective tools for measuring your progress and making sure that you are on track with your goals.
Investors will want to see a comprehensive business plan if they invest in your company. They may not have the time to read it all, but they still want to get a sense of how things operate so they can decide whether or not you’re worthwhile based on what you’ve presented to them.
What Investors Look For in a Business Plan?
A good business plan should be clear and concise, with a clear purpose and direction, and it should be able to precisely define the value of your product or service. It should also be well-supported by research, data, and statistics. Investors want to know that you’ve done your job — that you’ve researched the market and seen how other similar businesses have succeeded or failed. They want to see that you have a reason for starting this business.
Now it’s time to dive into business plan tips for understanding how to present it to investors.
1. Prepare the Executive Summary
A business plan’s executive summary is a short, 1-4 page document that provides an overview of the entire business plan. The goal of the executive summary is to give potential investors a snapshot of what they’re getting when they invest their money in your company, so you’ll want to include key information like:
- The main ideas that you want to discuss in the remaining sections
- The purpose of your business and the main highlights
- You target audience
- A description of your company and its products or services
- The marketing strategies
- Your company’s vision and mission statements
- Market opportunities
- Competitive analysis
- Financial information
- Owners and staff
- Your future plans and goals
2. Do Research
When it comes to business plans, research is the most important step in the process. Your research should include:
- The market and competitors — Find out who’s already in your target market space, and what they’re doing well that you could learn from or improve upon as an entrepreneur and business owner.
- Industry trends — Researching industry trends will help provide context for your business plan by showing which areas of business are growing rapidly. This will also expose any weaknesses in your company’s strategy that could prevent growth down the road.
- Financial information — Look up financial information related specifically to you.
- Legal requirements — You also need to take into account any legal requirements for starting a business in your country.
3. Address All the Questions Investors May Ask
You should also have a list of questions that you expect investors will ask, and be prepared to answer them. If you don’t, someone else at the table may pose a question that makes you look unprepared. This can be embarrassing and could make investors question your ability to run the company.
Additionally, if investors are interested in learning more about your business, they’ll be asking questions anyway — so why not have some ready?
4. Focus on the Competitive Advantage
When it comes to presenting your business plan, you’re likely to be asked about the competitive advantage of your business. Your unique selling proposition (USP) is the essence of your business. It’s a short statement that describes what makes you different from other businesses in your field. A good USP will highlight any special features or advantages that make it easier for customers to buy from you instead of your competitors.
When you explain what sets your business apart from others, you’ll demonstrate that there is a need for what you’re offering and why people should choose it over other products or services.
How do you do this? In a few sentences, explain what sets your idea apart from all other similar ones. What makes it unique? How will it be different from competitors? If there aren’t any direct competitors, what is missing in the marketplace that makes yours a worthwhile investment opportunity?
Digi-Tip: You should also address any potential concerns about your abilities or experience.
5. Have a Business Plan Presentation
Preparing a business plan presentation is a lot like preparing a sales pitch. You have to make sure that you’re doing your best to convince potential investors that your company is worth their time and money.
Here are some tips for getting started:
- Start with the end in mind. What do you want investors to think when they’re done reading your plan? What do they need to hear from you? If you know what you want them to feel, it’ll be easier for you to figure out how best to present it.
- Include all the relevant information in one place. It’s easy for readers’ eyes to glaze over when they’re presented with too much information at once, so try grouping everything together in an easy-to-follow way.
- Use visuals like graphs, charts, and other visual representations of information when possible — this makes it easier for readers’ brains to process the information being presented and will help them remember what’s important when they go back over it later on.
Digi-Tip: Use design tools (e.g. Canva, Visme, Adobe Spark, etc.) to create a memorable and brand-themed presentation.
Hopefully, this article has helped you get started with your business plan. Remember that there are no hard and fast rules when it comes to writing one, so don’t be afraid to experiment. Good luck!