Most startup businesses need capital.If you are a potential business owners then you are acutely aware that your new business needs a group of investors who are willing to provide funds to help you create new products or hire new employees. Venture capitalists and philanthropists are always looking for innovators who have an idea that is on the cutting edge. However your idea may be great, but if you do not write a business plan that attracts investors, you will face a number of challenges in the early stages.
One of the most important things you can do is to write a business plan that will attract investors to put into your business. However if you are new to writing business plans or trying to deal with the hundreds of details that have to be addressed before opening your business you may overwhelmed before you even begin.
The first step is to remember that your business plan is the calling card you present to prospective investors. In order to entice an investor to put money in your business (as opposed to other businesses that might have asked for financial support) you will need to explain why your business will make the investor money and why it is a better risk to invest the money in your venture. Keep in mind that the more thorough the business plan, the better the odds of getting the money. You should include among other details, a market analysis that is coupled with an industry analysis, a workable advertising strategy, the extent of the business’s Internet presence, and long-term as well as short-term financial plans.
You will want to make sure that you business plan has a clear statement of purpose. In addition you will need the following information in very specific amounts. These are
- A complete list of available funds
- A complete list of proposed inventory
- A detailed estimate of projected profits
To do this successfully you will want to learn the parameters of venture capital and business plan contests before you write a plan. Keep in mind that you should not utilize a general business plan for every meeting with investors because every investor looks for a different combination of variables in a business idea. Do your research before submitting your business plan to any potential investor.
You should not every underestimate the need to impress investors with a clear statement of purpose for your business. Your statement of purpose only needs tobe a single paragraph of concise language that defines the end goal of your business.
You will also want to provide biographical information on all members of your ownership team. Your business plan should have a section about each executive and high level staff member, (be sure to include past successes in starting new ventures). The unique nature of your ownership team can be a valuable asset toattract an investor who is more concerned about office dynamics than specific products.
You will need to complete a projected inventory of every piece of equipment that will be needed to start your business. You should write down equipment names and a one sentence description of its function and the average price found from leading providers.
Along with this be sure to calculate the funds you currently have available to you when approaching investors with a business plan. Your savings accounts, property and other assets demonstrate financial wherewithal that will be critical in convincing investors of your ability to startup a business.
Finally be sure to envision your company’s profits for the first year. You can estimate projected profits by taking a modest amount of sales for your particular industry and then comparing it to your operational budget. Profit projections will give your investors a measure of your company’s scale and it gives your employees a goal during the initial year of business.