Not all casually created business plans can help you reach potential investors. And as we all know, investors are the main source of the continuous success of any business idea.
So, if you want to get that recognizable amount of investors, there is no other way left than to prepare a practical business plan.
Steps to Prepare an Investor-Ready Business Plan
Step 1 – Researching
A written business plan is always necessary where there should be research. Researching is important for all kinds of businesses, from small to large.
Business researches help to find out the profits and losses. Spending good hours of time researching is effective. It includes the evaluations.
You must think properly while writing a business plan. Before writing, you have to understand your business, its products and services, your goals and objectives, your competitors, and so on.
Researching also includes reading everything from top to bottom about the industry world, visiting the market, and trying to connect with your consumers by talking.
While conducting business research, there are several steps to follow, such as market analysis, financial analysis, growth analysis, competition analysis, and so on.
Step 2- Understanding the purpose of your business plan
Business plans can include various purposes, but a definite business plan should be there, which will describe the kind of business you are doing, the marketing techniques and selling strategy, the profit and loss statement along with the financial position.
A business plan has a copulative thought to deal with a business, like a mapping which includes analyzing for marketing, manufacturing, website designing, sales, etc.
This is important because you are self-investing and accomplishing a business by yourself. On the other hand, if you are concerned about attracting your investors, then you have to have a vivid and summarized plan, and also, you have different purposes for attracting your investors.
You should personally delimit the goals yourself before you define your plan to others.
Step 3 – Company Profile
Having a company profile means complete information about your company is there, or we may call it your organization’s history.
This is important to impress and attract the customers and also to able them to know about your company, its product and services, your resources, quality, and so on.
A company profile also shows the way your business is identical to the customers. A business profile must include your target market, offered product and services, targeted audiences, resources, and how you will overcome the bumps in your business.
A company profile is available on the company’s official website. A company profile is a very first introduction to business.
The advantages of having a company profile are: to get tenders and contracts, get listed as a service provider, and also to achieve financial loans from banks, and also getting grants.
A company profile should be designed with a logo and profile page, introductions, backgrounds, techniques, views, products and services, ownership and management, and evidentiary.
Step 4 – Clear documentation of your business
Every investor wants a complete profile and fair business documents while investing, as their ultimate aim is to achieve cash from a business. Fair documents are very important for investors, banks, and other financial issues and official purposes.
Hence you must make clear documents regarding your industry projection, cash flow, expenses, financial statements, and so on.
You must be careful regarding your legal papers, like business licenses also. Types of business documents are business letters, business reports, emails and memorandums, transactional documents, financial documents, etc.
Business documents give information about contractual terms and conditions, locations of the company, VAT no, corporate identity no, invoices, offers, and price lists. Financial documents are also important for budgeting, tax file returns, and proposals for budgets.
Business documents are prepared by the company’s accountants, including the income statement, balance sheets, pay bills, payroll reports, receipt records, etc.
Business documents play a vital role while you do your business as they gradually increase your confidence in your business among your customers and potential investors and represent the authenticity, history of its journey, etc.
Step 5 – Adaptable business plan that can relate to audiences
A business plan must be adaptable for all kinds of potential readers. What you have planned, your business strategies, your goals, and objectives, your previous history, etc. And everything should be vivid. Your readers include bank employees, investors, capitalists, venture, etc.
So your business plan should be adaptable as different readers can have different views, interests, and conditions of their own.
While planning, if you keep in mind the different interests of your potential audiences/readers, then your planning will be easier and clear as you would make it adaptable according to them.
Your business plan can be fluctuated and be modified depending on your target audiences, but you must keep the changes up to a limit while modifying the plans, keeping the main data stable while you talk about your projection of finance.
The interest and demands from your business plans vary. Forex- the venture capitalists are concerned with your management process and your authentic business concepts and objectives, while the banks would ask for cash flow statements and balance sheets.
Step 6 – Caring For Your Business Plan
No matter with whom you share and discuss your business plan, you must show your seriousness, care, support, and devotion toward it.
Your passions mean a lot for your business plan for your team members, customers, investors, venture capitalists, and everyone in your business.
Your discussion should include your learning, your previous mistakes, the upcoming obstacles you want to overcome, how you would solve your regular problems, your defeating techniques for your competitors, and what would make you unique.
You must set your goals and how to reach them, which means you have to create tasks. Also, there should be a time limit and a deadline while you set up a goal to execute it.
There should be no compromise. All these things should reflect in your business plans. If you include this part of the explanation in your plan, it will eventually develop a sympathetic and emotional bond between others and you.
Hence your business will get support to help it become more successful in the future.
Step 7 – Having A Marketing Plan
Whether you are an entrepreneur or a business owner, the market analysis should be there, describing the understandability, the market demands, and the price of potentiality in the market.
There is a famous saying that “ The only thing that matters is getting to the market fit” Moreover, understanding and knowing the market properly is very important regarding customer demands for products, market research, evading, classifying, quality, and so on.
In a business marketing plans include various important points. Various goals have to be there in marketing objectives, and also techniques to achieve them should be there.
Your marketing objectives should put focus on why and what you are going to do for your marketing activities, implementing and executing; to whom and how your business plans should go on.
In your planned business marketing, you must have financial budgets to execute your planned tasks.
Your budgeting should be divided between external and internal hours. External means cost of pocket money, and internal means labor/ staff hours. Doing these will make you attain costs, which are essential for a business plan.
Step 8 – Analysis of competition
In a business plan, analysis of competition is a big deal. Competitors are the rivals whom you have to beat always. In order to do that, you have to ordain the strengths and weaknesses of the competition.
This would help you be benefited. In this way, you can understand and can protect your business from the competition and keep your business safe.
Also, analysis of competition can determine the negativities that can utilize your business productions. It is a critical side of a business plan to make a competitive analysis.
Through its evaluation, you can show what makes your products and services identical among all.
To make a competitive analysis, you have to determine who your competitors are, their products and services, their current situations and strategies, their share in the market, what is both of your weaknesses, their threats towards you, the positive opportunities they made for available for your benefits and so on.
Step 9 – Having Love Toward Your Enemies
The closer you are to your enemies/ competitors, the more you can understand their strategies. Your good and balanced relationship can help you learn more about their businesses. Hence understanding the competition would be easy for you.
Their way of doing business, their successes, their number of customers, their techniques, etc. All these would help you to compose and compete with your enemies and find ways to compete and make plans, helps to modify your business strategies and techniques, and help you compare.
Loving and being with your competitors help you learn a lot from them, like studying their websites and their behaviors toward customers. Hence these ideas and learnings help in making business plans successful.
Meeting competitors at conferences and events and discussing and talking to them helps to develop your knowledge.
Step 10 – Knowing and understanding your business properly:
Before entering into your business, comprehending your own business is important a lot. If you want to make a business plan, you must read the previous records and histories of the business, its pros, and cons, profits and losses, etc.
Knowing what your business is offering is essential. Understanding the objectives and goals, the competitions and competitors, and the payment of buying and selling.
You must know the weight of your own business. This is important as it will influence your business in the future. Your business may contain many valuable assets, so it’s important to know its value.
If you have this knowledge, you can make a real plan for your business. It also helps make plans effectively for business growth, the running of the business, the ways of success, and the right time for retirement. There are certain times when business relations valuations are complicated.
So there are few business valuations like finding, buying, and selling agreements, evaluating retirement incomes, and estimating potential estate tax obligations. Hence to run and make a proper business plan, all these points help to make one.
Step 11 – Management team and organizations:
Business management is important to run and should be included in a business plan. A strong and good management team helps to run and execute business plans successfully and effectively.
A company’s management should deal effectively with a business’s organizational structures. There should be a directory of the number of departments, descriptions, staff, and employees.
Owner’s information, their ownership, and percentages of share in the business and about the board of directors. Owners’ biography, skills and experiences, knowledge, and involvement in the business.
How management teams work, their profiles and experiences, and their work. Also, if there are advisors like accountants, attorneys, members of the board, etc.
Step 12 – Writing the details of how you plan to spend money in your business
It is very important to write about the source of money you would spend while doing your business.
You must include your costs, like advertising, employee and staff salaries, rent, delivery costs, offices, and other expenses, insurance, raw materials, and purchasing new equipment while opening up a new business.
These costs are obviously hectic and stressful to carry out. Before thinking about profits, the actual cost of business to start is a matter of concern and can lead to a big deal.
So, you must calculate these costs and the consequences that would occur when you plan the expenditures while planning your business.
This will reduce your risks and stress after you plan it properly and can meet up the costs as budgeted.
Step 13 – Financial planning
The ultimate concern is definitely the financial plan while writing a business. This is the most complicated and serious concern in a business, as it is a must to show the source of money, how and what it is used for, and where it goes.
Capital is the key component of a business. Your business plan must show the amount you invest and contribute to a business.
This is because if you show it, you will earn bank appreciation as personal funding backs up to get new loans for business. There are certain funds that take place by investors or bank loan providers.
There are also public subsidies that are included in the external funds. All these should be noted down in your business plan.
Step 14 – Studying Risk factors and their chances
Risk factors are delicate issues and should be included in a business plan. This is the most important issue as these are related to loan creditors, investors and bankers.
Taking these risk factors into account while writing a business plan in the upcoming future won’t make you face problems.
In fact, risk factors create financial obstacles in the business. Facing risks is obvious for all businesses. Fluctuations in profit and loss and other factors cause business failure.
We can conclude by saying that risk factors are the possibilities a company may face less than its expected profitability.
Final Wordings
These are the fundamental steps that you can follow to write an effective business plan. Keep the incoming barriers and profits in mind and implement them accordingly.
Always try to create a situation where the investors will be more willing to be engaged with your business plan.
Otherwise, it would be hard to survive with the losses that may follow if investors become confused and deny showing any positive involvement.
Overall, these steps can be your roadmap to land more and more investors who will have a clear idea about you and will be more interested and show more enthusiasm and spontaneity toward your business plan.
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Business, marketing, and blogging – these three words describe me the best. I am the founder of Burban Branding and Media, and a self-taught marketer with 10 years of experience. My passion lies in helping startups enhance their business through marketing, HR, leadership, and finance. I am on a mission to assist businesses in achieving their goals.