While the Idea of a Startup creates interest among investors, a business plan is definitely required to seal the deal. It not only communicates your execution plan to the investor but it also helps you track your progress and give direction as you go along.
Here are 6 of the important tips that will help you write an effective Business Plan:
- Prepare Executive Summary with a WOW factor: It is a summary of the entire business plan and first part of the document that investor will read. Since lots of the investors are time pressed they will only read the complete document if they like the executive summary; that’s why it is so important to get it right. Executive summary should clearly highlight your business idea and how it will make profit. The description should be clear, concise and engaging.
- Support all claims with research and facts: Reference to the market size, predicted growth, competition etc should be backed by numbers from reliable research sources. If you claim that founders are capable to grow the business it should be backed by showing their relevant profiles and capabilities
- Never overestimate the Financial projections: Investors like conservative Startups who Under-commit and over-deliver. For example if you are confident of acquiring 30% market share you can hint that to the investor but base your projections on a 10% market share. You will surely take lot of assumptions in your business plan ; it is professional to list them all of them
- Highlight a Strong team: A breakthrough idea will not work if the executing team is incapable and a mediocre idea might succeed with a strong team. Nowadays investors give as much weight age to the team’s credentials as the idea. Make sure to list detailed profiles of the team and their achievements.
- Make customized plan for Investor: All investors are not same; traits and categories could be varied as time pressed, highly formal, HNI, institutional, short term, long term etc. It is important to study the profile of the investor you are pitching and make a customized proposal for them.
- Highlight the Exit Strategy: Angel investors and VCs are there in the business to earn profit and exit is what can give them a return. Clearly highlight the exit strategy with timelines to build confidence. Exit plans have to be very clear because it will decide how the company is operated.
Vishal Arora
vishal@bizresearchlabs.com