"What is an Investor Ready Business Plan"

A Business Plan, as all good entrepreneurs starting out in life should know is the foundation, or rather a springboard, towards the establishment and growth of a new business. A business plan is an essential tool for companies raising capital – and your business plan needs to be Investor Ready. What is an Investor Ready business plan? An investor ready business plan is a document that has been professionally prepared to meet the needs of both Venture Capitalists and Angel investors. In your Business Plan, you should be able to see your own project through the investor's eye. Your plan must be able to answer the concerns of an investor.The investors, both VCs and angels, are risking their hard earned capital by investing in your venture in the hope of long term returns that are worth many times their original investment. An Investor Ready Business Plan demonstrates to investors that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by prepareing a comprehensive and detailed view of their business objectives and goals. Some important sections that address different concerns of the investors are below: Management Investors invest in management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions. Customers It is important to communicate to the investors that you understand the needs and requirements of your customers and to articulate your marketing strategy within your business plan. Product/Service DescriptionA complete description of the product or the services offered by you should be outlined in detail. A description of the overall market for your product or service, along with the details of your customer base is essential. The investors need to know the reach and the kind of customers your product / service is catering to. Marketing PlanOne of the most important sections of your business plan is your marketing plan. This section will outline your sustainable competitive advantage to your investors. In a way assure them why you will succeed where others have failed. This section is where you include a definitive description of your customers, market size, demographics, characteristics, growth prospects, trends and sales potential per product / service category. Here is where the pricing strategies are outlined and how they can directly influence the growth potential of each product /service. It is also important to include the future growth, market share and trend influences.Barriers to EntryAlong with giving the details of what your product / service is and who your customers are, you also have to inform your investors how you will you prevent your competitors from taking away your customers. The barriers to entry section outlines your business strategy to keep your competitors at bay and grow in the market. Investors need to feel comfortable about the soundness of your strategy before they invest in your venture.

Two Types of Business Plan Executive Summaries

Companies seeking capital often ask how long the Executive Summary of their business plan should be. The answer depends upon the use of the summary, mainly determining if 1) it precedes the full business plan, or 2) it will be used as a stand-alone document.When the Executive Summary precedes the business plan, its length should be short, typically only one to two pages and certainly no longer than three pages. This is because the Executive Summary is not meant to tell the whole story of the business opportunity. Rather, the summary must simply stimulate and motivate the investor to learn more about the company in the body of the plan.The second type of Executive Summary is a stand-alone document. That is, it is given, by itself, to investors for their initial review. If interested, the investor will then request the full business plan. A stand-alone Executive Summary is often used to limit the flow of information. That is, if an investor is not interested in the general opportunity that your summary presents, you don’t want to reveal to them intimate details of your plan.Regardless of which type of Executive Summary you are developing, the summary must included the following critical elements:1. A concise explanation of the business2. A description of the market size and market need for the business3. A discussion of how the company is uniquely qualified to fulfill this needIn addition, a stand-alone Executive Summary should include summaries of each essential elements of the business plan. This includes paragraphs addressing each of the following:- Customer Analysis: What specific customer segments the company is targeting and their demographic profiles- Competition: Who the company’s direct competitors are and the company’s key competitive advantages- Marketing Plan: How the company will effectively penetrate its target market- Financial Plan: A summary of the financial projections of the company- Management Team: Biographies of key management team and Board membersThe Executive Summary is the most critical element of the business plan. If it does not grab the investor’s attention, the investor will neither read nor request the full business plan. As such, spend time developing the best possible summary, create two versions (e.g., stand-alone and full plan predecessor) as appropriate, and work to get it in the hands of the right investors.

Five Crucial Components Of A Business Plan

The format of a Business Plan is something that has been developed and refined over the years and is something that should not be changed. Like a good recipe, a business plan needs to include certain ingredients to make it work. When you create a business plan, don’t attempt to recreate its format. Those reviewing this type of document have expectations you must meet. If they do not see those crucial decision-making components, they’ll see no reason to proceed with their review of your business plan, no matter how great your business idea.Executive Summary SectionEvery business plan must begin with an Executive Summary section. A well-written Executive Summary is critical to the success of the rest of the document. Here is where you need to capture the attention of your audience so that they will be compelled to read on. Remember, it’s a summary, so each and every word must be carefully selected and presented. Use the Executive Summary section of your business plan to accurately describe the nature of your business venture including the need that you plan to fill. Show the reasons why people need your product or service. Show this by including a brief analysis of the characteristics of your potential market. Describe the organization of your business including your management team. Also, briefly describe your sales and marketing plan or approach. Finally include the numbers that those reviewing your business plan want to see – the amount of capital you seek, the carefully calculated sales projections and your plan to repay the loan. If you’ve captured your audience so far they’ll read on. Otherwise, they’ll close the document and add your business plan to the heap of other rejected ideas. Devote the balance of your business plan to providing details of the items outlined in the Executive Summary.The Business SectionBe sure to include the legal name, physical address and detailed description of the nature of your business. It’s important to keep the description easy to read using common terminology. Never assume that those reading your business plan have the same level of technical knowledge that you do. Describe how you plan to better serve your market than your competition is currently doing. Market Analysis SectionAn analysis of the market shows that you have done your homework. This section is basically a summary of your Marketing Plan. It needs to show the demand for your product or service, the proposed market, trends within the industry, a description of your pricing plan and packaging and a description of your company policies.Financing SectionThe Financing section must show that you are as committed to your business venture as you expect those reading your business plan to be. Show the amount of personal funds you are contributing and their source. Also include the amount of capital you need and your plan to repay this debt. Include all pertinent financial worksheets in this section: annual income projections, a break-even worksheet, projected cash flow statements and a balance sheet. Management SectionOutline your organizational structure and management team here. Include the legal structure of your business whether it is a partnership, corporation or limited liability corporation. Include resumes and biographies of key players on your management team. Show staffing projection data for the next few years. By now you’re probably thinking that you don’t need Business Plan just yet. Well you do, and there is business plan building software that can help you through this immense project. These software packages are easy to use and affordable. Use one today and produce a professional-quality Business Plan – including all critical components – tomorrow!

Why Should You Have a Business Plan?

Are you planning to start a new business? Or are you consideringexpanding your current business and require a bank loan orinvestment from outsiders? If you are going to look for an investment of capital it is quitelikely that you will be required to have a business plan. If youare starting a business, despite the work involved, a businessplan can prepare you for the obstacles ahead and help ensure yoursuccess. A business plan is something that many small businesses fail tocreate, however, many business owners are adamant that having awritten business plan is one of the keys to their presentsuccess. Creating a business plan forces you to contemplatepossible obstacles to your business and prepares you to findsolutions that will help you to overcome them. To find investors or get a bank loan, they will want to see thatyou have the experience or resources to run the business. Theywill want to see your projected income as well as your suggestedrepayment plan already laid out. Taking the time to do this isnot only important for them, but it gives you a measuring tool toverify if your business is growing properly. You can gage yoursuccess on how close to the plan your business has actuallyperformed. Perhaps you'll do worse, or perhaps you'll do better,either way it helps you determine how well your business isgetting on. If you have never seen a business plan before you may beconcerned that is is too difficult a proposition for you tomanage on your own. While there are services available where you can hire someone towrite a business plan for you, depending on your needs it may bewise to familiarize yourself with a business plan's layout. Thiswill not only help you to provide the necessary information, butmay encourage you to try your own hand at it. There's a free tool at www.bdc.ca which will assist you increating a business plan. Some of the topics you will be requiredto explain are your Market, Customer, Competition, MarketingPlan, Research & Development along with financial forecasts. Youmay consider hiring someone to help you with your financialsheets after completing the written part of the Business Plan. Your Business Plan will become your guide and silent businesspartner - indicating where you need to improve and helping youstay one step ahead of your competition. Make it a priority tohave this crucial road map for your business .