Let’s be clear, and as said several times; without a clearly written business plan, any idea you have and your chances of bringing it to fruition, including through outside financing, are dead on arrival. Due to current economic conditions, and in a busy and increasingly engaged world, people have less time to waste than they did five or ten years ago, potential investors even less.
Of course, starting a business, especially from scratch, takes vision, courage, and a fair amount of patience to see it turn into something tangible. However, with people chasing meeting schedules, work flights, meal dates and important commitments, compounded by pressing emails and memos that need to be answered, exacerbated by a rush to achieve personal goals and professionals, then add a healthy dose of social media distractions here and there, and you’ll find that it becomes increasingly difficult to hold people’s attention for more than a few minutes at a time, and in some cases even a few seconds.
For this reason, and although we have analyzed the importance of always having a Pitch Deck ready (refer to an earlier article – The Pitch Deck; Your path to a successful Series A), it is important to note that as important as nearly every facet of your business plan will eventually become, A) Provides insight into the resources needed to achieve perceived business goals, B) Establishes clear timelines with expected KPIs and progress tracking, VS) Shows that all eventualities have been accurately considered, and of course, D) Shows where the investment is, when and how to use it, most potential investors may not have the luxury of comprehensively analyzing every segment of your business plan at first glance.
However, to save them time, and according to some experts, most, if not all, potential investors will definitely switch to these five (5) more particular parts of your business plan closer, as it will give them an almost immediate picture of how much and why your idea should be seriously considered, if at all. So, and as already stated, although almost every segment of your business plan is essential and most should be written with careful thought, we will consider those more critical parts that you need to give exceptional attention to.
The executive summary: Typically the very last part of the business plan to be written, this part provides a succinct overview of your big picture idea and how you intend to take it from startup to scale and beyond, using the your investor’s money, and more importantly, how and when they should expect reasonable returns on their stake.
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Since this is the first, but usually written last, it is extremely important that you spend as much time as possible highlighting the most important parts of your outline in this segment using bullet points, usually arranged next to your essay. , or in a way that makes them visible and easy to digest.
Remember that time is your worst enemy when presenting to an investor, so it’s essential to have those bullet points, along with charts, images and numbers spelled out boldly and up front to avoid any ambiguity. when you push your idea.
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Also remember that since the amount you typically need to start your idea appears in later segments of your plan, it is essential that this amount be written in bold in the executive summary, along with the potential returns. , because your potential investor may never have the opportunity to get that far in your plan before moving on.
So, and as the saying goes, “you never get a second chance to make a first impression”. Nothing could be truer of the executive summary, and why your waking moments should be spent tweaking its content to get as much attention as your breakthrough idea should demand.
Market and industry analysis: No one knows your target audience better than you. And if by chance your potential investor comes to the end of your summary and still wants to turn more pages, most experts have pointed out your need to spend a lot of time analyzing this segment of your business plan like most people. tend to move on to this next part to see what in-depth knowledge you have of your audience, and if there’s any real value to be gained or offered to them outside of the traditional.
Note that it also takes Psychography in consideration. Otherwise known as CAE variable, it represents interests, general activities/habits and opinions. So, as sentient beings, each with their own perspectives, born from birth, peer circle, workplace and home, a visual breakdown of your main target, how they think, live and also their spending habits usually work better, but showing your potential deeper investor analysis, like a sample survey, also goes the extra mile to earn you valuable points, and maybe get a call from the parties external stakeholders that you so badly need for other meetings.
An analysis of the major players in your industry and a careful breakdown of how they do business, versus how you intend to differentiate your own business and offerings, is also very important, because they follow almost the same path as the competition is just telling your investor what he could have already told him from the start, you have nothing new to offer the market.
Unique Selling Proposition: Now more commonly referred to as Your Magic Formula, and as noted in the industry review segment, Your Magic Formula needs to stand out for something more than just price and better packaging, otherwise, you don’t have still nothing new to offer. Some angel and private investors have argued that after the executive summary, your market analysis is their next point of interest, while others have declared their strong interest in the USP product/service after the executive summary. Either way, one thing is clear, if you get your magic spell wrong, you might never get that all-important call for further discussion.
So, spend time critically understanding and honing your product/service to a point where it truly represents something an investor would want to be a part of, because that part of your business plan will almost certainly be second or third. the most important. A significant portion of investors are turning around to better understand why you, and not one of the myriad ideas jostling for their attention, should get their check.
Then, does your Financial analysis: The devil is in the numbers they say, and contrary to what you might think, most investors are number savvy, even the seemingly less educated but successful business owner and investor, or the series, have mastered a thing or two about how to decipher finances the numbers to a point where they can tell when the numbers are made up, or have been critically considered to take into account a variety of factors sufficient to allay their fears for certain considerations and allow for the unpredictable.
So, it’s always important to spend a lot of time questioning your numbers and projections yourself first and foremost, or with your team, because many entrepreneurs have been turned down at this critical point of not being able to convincingly defend their projections and figures. Don’t be surprised if you’re asked about your projected ratios, as some savvy investors, as some experts have said, might even make this segment of your business plan their very first point of call.
Last and not least, but the least expected segment of your business plan that investors really want to see, is your Cover presentation: Remember that statement about “not getting a second chance to make a first impression”, well, some private equity managers have confessed that they are best attracted to reading a business plan. case or a written pitch when it has a very colorful cover design with striking images. pictures and, in some cases, puns that grab their attention so much that they say, “oh, never mind, that might as well…”, and sometimes that’s all you really have needed to get through the door.
As insignificant as you might think, a bland cover design, and rightly so, could most likely cause your written idea to gather dust on the Private Equity Manager’s corner table rather than in his hands during the lunch break or a moment for herself.
Remember that pictures speak a thousand words, so it’s important that you spend a considerable amount of time, if not on your own if you lack design skills, then with an expert who tailors your cover page design to something so enchanting, an investor has no choice but to at least jump to the executive summary just before their next board meeting. You never know, she might just find it interesting enough to talk about.
All in all, the business plan has been and always will be a very important tool in today’s business world, and while no part of it should be glossed over in presentation, style and tone, the aforementioned parties have been known to pique the interest of investors the most and as a result, they spend time analyzing them more critically than others, and so should you.
Essien Brain is a business consultant, with expertise in digital marketing, crowdfunding, pitch decks and business plan/proposal formulation and design.
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