Business Plan Tips

What Investors Are Looking For In A Plan

Investors - whether angels or VCs - are looking for the same things when reading a business plan. They want to know how big the opportunity is, whether this is the right team to exploit the opportunity, who the competition is, what the risks are, and why they can expect this team to implement successfully. Your job in writing the business plan is to address these questions convincingly and clearly.

Emphasize Your Real Strengths

Highlight what your team brings to the table. If your business hinges on a particular competency (for example, understanding the procurement process), your plan will be more persuasive if you explain in your plan that of your team members knows has expertise in this area. Rather than including generic resumes of team members, tailor the resumes to draw out the experience each member has that will make him or her a valuable contributor.

Get To The Point And Make It Clear And Comprehensive

Investors read a lot of business plans. A 20-page plan which clearly lays out your business is far more likely to be read than a 100-page plan. Today, some entrepreneurs use a 15 slide Power Point presentation. If your text is short and punchy, you won’t need to repeat yourself, because the reader won’t be bogged down keeping ten chapters in their head. Reading the same thing over and over, even if it’s worded differently, can get really tiring. If you try and be as precise and to the point as possible, people are more likely to want to read it.

Write In Plain English

If you can’t explain your idea in clear and simple English, either you don’t understand what you're talking about (”What is a transaction enabled atomic journaling database server, anyway?”) or you haven’t simplified the idea enough. Think, revise, and try again.

Get Rid Of The Hype

Yes, we know you will be the “premier insert product category here of the Internet, achieving 99% market penetration with 60% customer retention in 3 months.” Your product will reach “new heights in customer experience through the use of personalization and one-to-one profiling and customization.” It will be “user friendly” because you will be creating a truly “ecstatic customer experience.” It is a “quantum leap forward” in the marketplace for product category here. Um, yeah. Believe me, we’ve read it before. About a dozen times today, in fact. (And by the way, the phrase “quantum leap” really doesn’t mean anything). Stick to a tight, simple explanation of your idea. Convince your reader you’ll be the best because your idea is the best, not because you can string a dozen buzzwords together.

Use Quantifiable Information

In each section, try and back up your assertions with solid facts. Even if you are a new venture and cannot give specific figures on the performance of your business, quote figures for the industry or your competitors. These real figures carry more weight than your assumed projections and give more reality to your plan.

Choose A Huge Market

Especially in the internet world, investors are looking more at the market than at the detailed specifics of your financials. Choose a market that is big enough to be an obvious good opportunity. A business which targets teenage girls who listen to music and has a reasonable chance of capturing 90% of the girls that are online is a huge opportunity. A business which targets net-savvy SAAB mechanics who need prosthetic limbs is not.

Don't give more away than you want to

Be aware of who is reading your information, and never give away more information than you feel comfortable with. Do due diligence on anyone who you are dealing with. If you do need to reveal sensitive information, ask for a Non Disclosure Agreement (NDA) to be signed.