Solid Business Plan

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Solid Business Plan
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Solid Business Plan

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Getting into business is costly, and that is the bare truth. There are many entrepreneurs in this sea of people around us, but only with ideas in their head. Nothing in terms of actual businesses!

But then, they do not know where to look. If you see carefully, there are a lot of investors out there who are looking out for just some entrepreneurs like these – entrepreneurs, who have good ideas for business, but do not have the capital to make the required start. If you can manage to catch their eye, you will get the capital you want for your business, and then there is no saying to what heights you can reach.

But it is important to impress these investors. You can very well guess that there will be hundreds of thousands of entrepreneurs wanting to forward their business plans to investors, so that they can get the break in life that they want. Do all of them get it? Hardly! The success ratio for getting a business investment is about 1 in 1000, or even less, as the number of prospective business investment applications is piling up. So where do you stand a chance? The truth is, you have to have a very powerful business plan – something that will impress the investors so greatly that they will consider your application and keep it on top of the heap in their 'IN' tray.

If you strategize carefully, you can really achieve that singular glory. Getting considered by investors for starting your business is no mean achievement, and is possible only with long hours of work. And a power-packed business plan. But before you even start out with making a business plan, you must know about the different kinds of business investors out there. They are of two main kinds – the angel investors and the venture capitalists.

Angel Investors – Angel investors are usually individual people, or sometimes groups of people, who have so much wealth in their coffers that they have nothing better to do with it than take risks by investing in business. In the very least, they get someone to manage their money. At the most, they get a share in a future corporate business. Though the name suggests so, there is nothing divine about angel investors. They will want a share in your company, and will want a part of the profits too. But, since angel investors usually operate individually, there can be many differences here in the way they operate.

Venture Capitalists – Venture capitalists are the more common type of investors for businesses, since angel investors are few and far between. Venture capitalists, or VCs as they are endearingly called by potential business investment seekers, operate in forms of organizations. They adopt businesses of a special kind, and rarely venture out of the genre. They will also want high stakes of ownership in the business they are investing, and will want minute reports of progress. It is much more difficult to catch a VC's eye than an angel investor's. But your business plan can do the trick. Here are some expert ideas on making a very effective business plan that could catch the eye of even the most discerning of investors.

Tips on Making a Successful Business Plan

Tip # 1 – Be perfectly sure of what your business is set out to do

You will be surprised to know the large number of people out there who want to enter business and even have a germ of an idea in their mind, but do not know what exactly they want to do with their business when asked. Such are the people who fail terribly when they submit their proposals to the investors. VCs are highly trained to weed out such vague proposals. When you are making your business plan, begin with the Executive Summary. The whole success of your business plan will depend on this, because it is here that the initial impressions will be formed. In this section, you should mention clearly what the intent and purpose of your business is. Make a very clear mention of why the market needs your business, and who your target market will be. If the investor gets convinced there is a market out there for your business, it is half the battle won. Using resources to monitor your business credit is priceless because you want to demonstrate responsible financial habits for future investors.

Tip # 2 – Make clear projections

It is actually funny to see sometimes how some entrepreneurs put in their profit projections in their business plans. Reading something like 'If we have about 1000 customers in the first three months, we could surely be touching be 50 million mark within the year' makes for interesting reading; but it is surely not going to hold any water with the ever-so skeptical investors. When you are making a projection, be realistic. How did you arrive at the conclusion that you will get 1000 customers in the first three months? What are your marketing plans for achieving that? Will you have production enough to meet the sales if they come up? Write clearly about all these factors. And avoid using conditional sentences that begin with 'if' in your projections.

Tip # 3 – Be realistic about the risks

There is no business without risks and venture capitalists know this only too well. When proposals come to them, they are the ones to first assess the risks of the proposals. So, you will do very well if you mention the risks beforehand in your business plan. That will give a realistic flair to your report. Otherwise, it will appear like a fantasy novel, nothing else. That will not go any good when your VC is considering all the potentialities of your business plan. In fact, you must keep a separate section, perhaps in the Marketing Analysis topic to mention all the risks that are associated with your business. Make it also a point to clearly elucidate what resources your business has, or will have, to counter these risks.

Tip # 4 – Keep your language simple

You must remember that your business plan is not a blueprint you are going to hand out to your engineers. This is a business plan, and it will be read by an investor. The investor, though quite wealthy, might not be very proficient at language. You must know that a large number of business plans are rejected just because the investors fail to understand what the proposer was getting at. So, you need to be very clear-cut in your language, and not use any difficult phrases. It is better to use points and bulleted formats wherever you can.

In conclusion, being frank and honest with your business plan always works. Come to the point directly, and do not beat around the bush. Investors have very little time, and chances are that they will only skim through your business plan. You have just about a few seconds to impress them into making an investment for your business. Keep that in mind, and you will probably be setting a date for inaugurating your business venture!

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