Without funding from someone else, it’s impossible for many new businesses to expand. This means reaching out to potential investors as a possible source of revenue. If you find yourself in that position, know that you need to come extremely prepared to each meeting with a potential investor. One of the most important things you can do is take the time to prepare a highly professional business plan.
For Some Investors, the Executive Summary is the Only Thing That Matters
The executive summary comes at the beginning of your business plan and summarizes the information in the rest of the report. Investors are busy people who might not have the time or desire to read your entire report. It’s up to you to grab their attention in these first few pages so they will want to continue. The executive summary should explain what your company does in the first paragraph. Be sure to use concise language as you continue writing these pages and use bullet points where it seems appropriate.
You can also brag about your company a bit in your opening pages. If you have already secured patents, won awards, or have a large customer base, don’t be afraid to say so. When you’re trying to break into an industry that an investor may view as over-saturated, take the time to explain how and why your company has a different solution to that of the competition.
Other Items to Cover in Your Business Plan
A formal business plan includes several other pieces of key information in addition to the executive summary. You should plan to add these to your business plan at a minimum:
Overview of company: This includes such things as the products and services it offers, its general purpose, proprietary information it owns, and anything else that makes it unique. It’s also a good idea to include a timeline of the company’s history.
Company vision and mission statement: This is your chance to explain why your company exists and what it hopes to accomplish.
Investment request: This will differ for each investor that you approach. State how much you’re asking for and a detailed breakdown of how you intend to spend the money.
Analysis of the market and competition: You should know detailed information about your main competitors and include it in this section. You also need to identify your target customer and show that you fully understand the market you’re entering.
Marketing information: How do you intend to let others know about your company’s products and services? Investors are looking to see that you have a good understanding of how to generate revenue.
Organizational chart: A simple chart stating the name of each person in leadership along with his or her role and background should suffice.
Financial plan: Describe the funding structure for your company as well as where the potential investor fits into it.
While this should be enough to start, you may want to include additional sections as well. Please contact us for guidance or feedback on your business plan before you meet with your first potential investor.
You need all the help you can get to run a small business successfully, and Doerhoff & Associates is here for you. We strive to provide what you really want and need – a unique and customized set of services to fill the gap and support you, the business owner.