Creating a powerful business plan

The money’s still there with the right approach!

It’s a rare business which can reach its full potential without raising external funds; and the ability to attract investors or debt finance should be in every entrepreneur’s tool-box.

Coaxing financial support requires a well-researched business plan, so here are my tips for creating a winning approach to funders –

1: Grab their attention. Banks and private investors alike get loads of similar requests, so stand out with an opening summary of no more than 3 sentences outlining your proposition.

2: Flaunt your strengths. They need to know how and why you are likely to produce a return on their investment. They’ll only back your ideas if you can demonstrate your relevant experience and skills.

3: Make sense of your numbers. You’ll need to explain each element, not just turnover and profit levels. Your break-even point, burn rate, when you will run out of money and their exit strategy are also of vital interest to your investors.

4: Demonstrate your market. How big is the opportunity? Could you become a market leader? Are you offering something which your competitors aren’t? Is the market shrinking or growing?

5: Describe barriers to competition. Are you the first to market? Do you have patented or copyrighted products and processes? Have you captured the best people to work for you?

6: Forge strong alliances. Relationships with major suppliers and other partners add credibility which will comfort your investors. A well-established and loyal customer base also speaks volumes in validating your business model.

7: Set milestones. You may not need all the funds you have asked for in one tranche; and investors are unlikely to release money until you do. Make sure you set achievable goals to trigger stage payments, as breaking promises is sure to drive them away!

8: Show your commitment. Investors love to see owner-managers with personal financial stakes in the project. This demonstrates your belief in your plans better than words ever will.

9: Attend to the details. Amongst other things, your plan needs to be concise, accurate, easy to read, well laid out and attractive.

10: Be passionate. Many investments are made from the heart as much as the head, so using exciting words and images will show your flair and motivation.

Have a question you'd like Jon to address? You can submit it by either adding a comment to this post online or by e-mailing it to jon@jupiterdawn.com