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Cases | 12 May, 2020

Creating a Business Plan for Investors

Are you trying to attract strategic investors to help finance your company? In this blog I’ll outline how to create a business plan to attract investors or secure a bank loan and how to understand the total value of your business.

The First Step..

The first step to creating a business plan is in identifying your audience and tailoring the business plan to their priorities.

A typical layout for your written plan would include:

Cover Page

Table of Contents

1. Business Description

You need to start off strong on page one with a business description that articulately describes the problem, and your businesses solution. Focus on enticing the investor with an accurate description of your business model.

2. Business Structure

Now that your audience has an understanding of your business concept it’s time to explain the business structure, date of incorporation, and ownership structure.


Ownership Structure

Inform your audience of the details surrounding the ownership of the business.

3. Unique Value Proposition

Your unique value proposition is at the core of your business strategy. It explains exactly what differentiates your business from the rest of the pack.

4. Market Analysis
Investors want to deploy their capital in businesses that have done their homework. Perform extensive market research prior to your equity offering, and report your findings in your business plan.

  • Customer Demographics: Target Audience
  • Total Available Market (TAM)
  • Market Growth Rate
  • Three Closest Direct Competitors


5. Operational Strategy
An operational strategy is a plan specifying how your organization will allocate resources in order to support infrastructure and production. Typically driven by business strategy it’s designed to maximize the effectiveness of production and support elements while minimizing costs.

6. Marketing Plan

A marketing plan is a document which outlines the advertising and marketing efforts for the coming year. It describes business activities involved in accomplishing specific marketing objectives within a set time frame. Your plan typically includes:

  • SWOT Analysis
  • Business Strategy in Marketing
  • Key Channels

7. Financial Projections
A financial projection is an estimate of future financial outcomes for a company in regards to budgeting. Arguably, the key aspect of preparing a financial forecast is in predicting revenue; future costs, fixed and variable, as well as capital, which can then be estimated as a function of sales.

Your Audience’s Expectations

Prove to your audience you’ve done your homework by creating a customized financial projection for your business.

It’s ideal to show your audience that your business will be viable in the proceeding six months, year, and three years. I Always be completely transparent about your financial projections.

Lifetime of Financial Projection

In building your financial projection create a one year and a three year projection.

8. Capital Requirements
Capital requirements are the sum of funds your company needs to achieve its goals.

Understanding Your Capital Requirements

How much money do you need until your business is up and running?

Your capital requirements should be calculated as accurately as possible. If you plan too conservatively, you may not be able to compensate for unforeseen financial problems, which you should always budget for. In case of doubt it is better to apply for too much credit and return it, then to subsequently finance funds.

Utilizing Your Capital Requirements

Explain exactly how you plan on deploying the capital. Be specific, and don’t be afraid to show that you plan on keeping a portion for operating costs or as an emergency resource.

9. Equity Offering

Valuing Your Company

Three main methods are generally used to determine the value of a business. You may use one or more of the methods depending on available information and the type of business you own.

  • Asset-Based Methods
  • Earnings-Based Methods
  • Market-Based Methods.

Once you’ve reached an appropriate valuation the next step is in deciding what percentage of your business you’d like to sell. Be prepared for investors to make offers that will value your business differently then you have.

10. Management Team
Who is your management team? How does each member’s background uniquely qualify them for their position? Again, investors are often investing in people, not companies. It is imperative to finish off strong by explaining exactly who you and your team are.

To Conclude

If your business plan is completed with integrity, following these steps will not only increase your likelihood of an investment, but answer some significant questions. There’s a reason why people ask if you have a business plan or not, as they’re an essential part of building a successful company.