Whilst there are numerous ways to finance your business, financial resources are still limited. An effective business plan for funding is convincing, realistic, and commercially viable; and allows potential investors to see the value in your business.
Writing a convincing business proposal to your investors is not as daunting as it seems! Take it from me – I am an entrepreneur and I know a lot of the difficulties come from our own self-conceived fears. Download our quick infographic guide and follow the key points for execution in this article.
Just as what the title says, it is a summary of your business. Bearing in mind that investors are busy people, this could be the only thing they read. Similar to the 90 seconds elevator pitch, you have that one paragraph to pique their interest.
The key points in the Executive Summary should:
- Define the problem and potential market size, supported with numbers
- Describe the solution; how your business will solve that problem – supported with numbers and findings
- Determine the milestones/goals – time needed to launch, what is the expected investment required and when do you expect to be profitable
It’s really simple – highlight the market gap, describe how you plan on filling the market gap and give a target on when you will be able to make it worthwhile to your investors.
Keep it simple and concise because details will be in the rest of the proposal.
Needs and Solutions – The Proposal
Every solution is a good idea but not every solution is commercially viable. In these sections, demonstrate the viability of your business with numbers and real research results. Is there a sizeable market with the need? Is your solution something people are willing to pay for? How much are people willing to pay for it? Does your solution fill in a market gap or is it to offer a better product (than the competitor)?
Display understanding of market conditions and include strategic moves alongside the changing business environment. Identify and know your competitors (direct and indirect ones), understand trends and forecasts, share marketing and expansion plans to move ahead.
There are also investors who place more focus on the people, so do include a section to introduce team members, sharing relevant past experiences, their roles and what they contribute best.
Costs and profits
As with any business or investment, profits are one of its main goals. It keeps the business afloat and propels further investment and growth. Ensure that all cost centres are taken into consideration; from product manufacturing to human resources; cost of sales to miscellaneous expenditure. Think about structuring in cost control measures that can help avoid unnecessary or unplanned expenditures.
With knowledge of potential market size and price points, demonstrate how this investment helps grow their money and your business. Keep it realistic and aim for steady growth.
Conclude and Appendix
Round up the proposal highlighting key points of why they should invest in your business. To keep the proposal concise, keep technical documents, calculations and other supporting information in the appendix.
The business plan is one of the most important proposal that your team members will work together on. Keep it concise, realistic and as accurate as possible. To keep you inspired, download the free E-book where 5 Small Business Owners Share Success Secrets.
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