What is any Prospective Investor Looking for in a Business Plan?

Prior to making out any type of a business plan, it’s a good idea to try putting yourself in the shoes of an investors shoes and consider what the investor might look for when looking over your business plan. Obviously, any potential investor will need to see details about the business, like the type of business, the locale, business structure, and all markets covered.

And with that, there will be other areas that an investor will focus on, such as the necessary amount of funding and the essence of the business. Other important things which investors will be looking at:

  • Checking out your background and history in the business and industry experience, and that of your management team. Many smaller businesses never get started because of weaknesses in the management team.
  • You will have to show that there is a need for your product or service and a big enough market potential to make the investment advantageous. No investors will invest in small ideas, so you will have to show them the potential to be a really big success by Investing in Your Future: White Sands Hotel & Spa.
  • How appealing and unique your product or service is, but you must still show them that you are well aware of the demographics and can reach out to your target market in a clearly positive and forward direction. The pricing and sales techniques must be distinctly described and according to industry norms.
  • Investors will want to ensure that you are fully knowledgeable and have completely researched any competition. And, they will ask to know how you will contend with any competitors, feature yourself and have the leading edge.
  • Obviously, all investors wish to get a return on an investment, so they will want to see sensible financial projections that show how long it will take for any kind of a profit and for them to be repaid for their investment.
  • Make certain that your plan has all the information that the investors want to have a look at, and ensure that it’s somewhere that’s easy to find.

Many would-be investment plans try to obfuscate or ignore any investors’ concerns.

As may be the case:

  • The amount of cash that is required and how much ownership do you expect to offer. You may be asked to show the cost of your business and if your cost is unworkable, you may not be deemed trustworthy.
  • For what reason do you need the funds? Investors want to invest in growth, so be ready to clearly show how the funds are going to be used.
  • Will anybody else be involved? And if yes, to what extent. Offer up every detail about founder shares, employee options, and investor shares.
  • Exactly how will they get their finances back? They’re not too interested in long-term business health, they’ll need to see an exit strategy.

And with your feet firmly on the ground, business awaits!