A while back I created a poll post on LinkedIn asking about the main issues SMEs including startups had that prevented them from growing. The results were clear: lack of funding was the main issue that was causing a headache for SMEs. But, why are companies struggling with funding? There are a couple reasons that can prevent companies getting funded.
A) Their business plan doesn’t sell
B) They have cash-flow issues
C) They have existing debt preventing them from getting funding
In this article I’ll be focusing on business plan and how you can craft it so that it sells.
Why does your business plan matter?
Many business owners consider that a business plan is a mere document about your idea. However, your business plan is actually not only your blueprint but also the brochure and menu for investors. To get funding, you need to write a business plan that makes the investors want to invest in your business.
But, how can you stand out with your business plan? Imagine you’re in a restaurant and the waiter brings you the menu. If you don’t find the menu appealing, you leave and go to another restaurant. The restaurant that has the best menu and dish wins and gets your money. The same applies to investors. If your business plan doesn’t make them interested and hungry for more, they will move to the next one.
How you can write a business plan that sells
The first thing you need when starting your business plan is CLARITY. You need to have a clear picture of yourself, your business and your ideal client. If you aren’t crystal clear on these, you can’t write a business plan that sells not to mention communicate it to the investors in a meeting. The truth is that you can have a brilliant idea, amazing product or service but without clarity on everything, you can’t communicate it and get investors to buy into your words.
Your executive summary is vital for your success. Why? Because that is the FIRST thing investors read in your business plan. If your executive summary doesn’t convince them and make them hungry for more information, you’ve already lost the game. Executive summary is preferably a 1-page long text where you describe your business in a way that makes potential investors decide to read more. You need to invest time in putting it together so that it sells.
After the executive summary comes your company description where you go into more detail about your company. Founding year, type and history.
Third is your product or service where you educate your potential investor about your product or service. You need to make it really appealing so that it stands out from the rest. What problem it solves, why it is viable in the market and what need does it fulfil in the market. Always validate your product or service so that you can back your word in your business plan. Some research in the form of a survey or poll is a great way to show that there is demand for what you offer.
Your financial plan is where you go into more detail about the pricing structure, projections, budgets, existing assets, capital, expenses and liabilities.
You also need to include management in your business plan. This is where you introduce who is with you in the business, what their roles and responsibilities are. You’ll also want to showcase the experience each individual has.
Market analysis is your best friend. Why? Because you have to learn about your competition and your own business in more depth. SWOT and PESTEL are vital to include in your market analysis. You’ll also look into the market in more depth to show that your idea is in demand.
In your marketing plan you need to showcase who your target audience is, how you’ll reach them and how you’ll get them to take action and choose you over your competitors. You’ll have to prove that you understand your market and their behavior and what impacts their decision making.
Last but not least come in the attachments. Here you include the latest data on your business, especially finances. They need to be as fresh as possible, max.2 years old. Include in attachments only relevant attachments to keep it relevant, professional and convincing.
Your business plan doesn’t need to be a novel. Short and sweet, not to mention it has to be to the point is the key to success when looking for funding for your business. This is the essence of the business plan. The next stage is communicating it to your potential investors in a meeting.