How to Gain the Advantage with Investors to Raise Capital for Your Business
This is an excerpt from the beginning of the full eBook, How to Gain the Advantage with Investors to Fund Your Business. You can download your copy here.
NOTE: Although the eBook is geared toward helping you obtain funding, ask yourself if you really need investors. It’s a fair question. Just because you are starting or expanding a business and you know you need money, doesn’t necessarily mean that you need an investor. Investors want a return on their investment, and they sometimes want partial ownership. Is their help worth it? Can you channel the energy you would spend seeking funding into new selling efforts or reducing your expenses until you can generate the expansion money?
- Business Plans – How Important is a Plan to Your Success
- Types of Investors and What They Look For
- Alternative Types of Funding
- Targeting the Right Audience
- Components of an Effective Business Plan
- Making it Easier for You to Write Your Plan
In this excerpt, we will talk about how to make a business plan work for you.
How to Make a Business Plan Work for You – 5 Core Questions
Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don’t have enough time. But just as a builder won’t begin construction without a blueprint, eager business owners shouldn’t rush into new ventures without a business plan.
Of the businesses that failed, 60% had no business plan.
– SBA Report
There’s a lot at stake for you. There is so much to learn. So many things can go wrong. So many things can happen -many you’ll want to avoid. And there are many opportunities for success everywhere.
Here are some of the questions we will help you answer on your road to success:
- What can writing and having a good business plan do for me?
- Is It worth doing?
- Do I need a business plan if I’m not seeking financing?
- How do investors read a business plan? What do they look for?
- What steps should I expect a venture capital firm to take with my plan?
- What are the components of a business plan?
- Should I hire someone to write my business plan for me?
- What about using business plan software?
What is a business plan?
A business plan is a written document used to describe your business. You can think of a business plan in many ways. Like a movie script, a blueprint, a brochure, a road-map. Ideally, a good business plan can serve you well in each of these capacities.
Each section in a typical plan has a specific purpose, for example, an overview of your company or of your products. A plan for a small, simple business can be quite short, perhaps as few as 8-10 pages. Certain sections can be as short as one page. Be reassured that each step of this process can be relatively painless and ultimately quite rewarding.
The value of a good business plan
How do we explain this? Of course, a business plan is a good thing and very worth having.
A business plan precisely defines your business, identifies your goals, and serves as your firm’s resume. It helps the business owner(s), its employees and its partners to understand why the business exists (its mission and your vision) and the direction the company will be taking to achieve its objectives. The importance of a comprehensive, thoughtful business plan cannot be over-emphasized. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing, and achievement of your goals and objectives.
The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales people, suppliers, and others about your operations and goals.
Before you begin writing your business plan, we always consider five core questions:
1) Why am I in this business and what do I want to achieve?
2) What service / product does your business provide and what need does it fill?
3) Who are the potential customers for your product or service and why will they purchase it from you?
4) How will you reach your potential customers?
5) Where will you get the financial resources to start and build your business?
Key Takeaway: Remember the builder? Would you purchase a house that was built without a plan? Of course not. Investors are looking for well-planned, well-thought-out, innovative business opportunities. Since 60% of the businesses that failed did not have a business plan, you see how critical having a plan is to your success.
To download a full copy of Burke’s e-book, How to Gain the Advantage with Investors to Fund Your Business, click here or on the download button.
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