10 Things Investors Look For in a Business Plan

A business plan does so much more than layout the internal structure of an organization. It provides some key insight to the money-men, the venture capitalists, the angel investors, the private investment bankers or even the traditional bankers. Remember that these people see hundreds, thousands of business proposals a month. And they’re all looking for certain things that either make them love your proposal — or send it immediately to the shredder. We’ve worked with nearly 50 investment firms at one point or another for clients for whom we have written business plans, and based on our experiences and the people involved, there are some important factors investors look for the most from the business plan.

1.) How much money is already invested? Do the client or other individuals/companies have a stake in the business?

Sometimes the difference between getting a loan and getting rejected is as simple as that. Imagine you’re coming to an investor with a fabulous business plan and you need, say, $500 million for a resort and real estate project. In your proposal you clearly state that you do not have one single dime invested yourself (yes, we had a business proposal like this once!). Do you honestly believe an investor is going to give you the time of day? Of course not. You haven’t taken any sort of risk — why should the investor?

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Business Planning in Relation to Business Growth and Management

For any company to succeed it is imperative to do business planning. The reason I am stating this is because most small business owners do not have a written plan. A company that has a plan has better chances of surviving than one that does not. A business plan should include a mission statement and a description of the business values.

Before starting a company include in your business planning an issue like market analysis to know the current trends and draw a marketing plan on how you intend to reach your target market. Choose the marketing tools you intend to use and be flexible in case you need a new approach. Also, have a financial projection to ensure a steady cash flow.

Put in place sound management structures to make sure there is smooth business operation. As you prepare, include structures that will enable your staff to be innovative and come up with new business ideas, this will encourage business growth. Rather than viewing creativity as a time consuming venture, device ways of assessing and implementing good business ideas.

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Creating a Business Plan

Business Plans

I have often been asked by aspiring entrepreneurs:
- Should I write a business plan?
- If so, where do I find information on how to write a business plan?
- What should be included in a business plan or how detailed should it be?

These are good questions. Let me begin by saying that there are several preliminary steps that should be completed BEFORE embarking on the arduous task of compiling and organizing data into a comprehensive business plan.

Usually, after a process of determining whether a business idea is worth pursuing, entrepreneurs immediately launch into a process. For some entrepreneurs, the process of validating the idea is relatively quick, while for others it is exhaustive in scope. However, over the years, I have observed there are some preliminary steps to be completed before starting to develop the business plan. These preliminary steps are a three step process I refer as the Gut Check Mirror (GCM) Test:

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