What Investors look for in a Business Plan

A business plan, however good, is in itself not enough to attract investors. A number of varying factors such as your past performance, business team, your service or product, track record etc are a part of the areas which are thoroughly scanned by the eyes of every investor.

Varying from private investors to venture capitalists, every investor has a different approach towards pushing their money into a newly venturing business plan. The hardest to please are ‘venture capitalists’. These people fund only a limited number of businesses every year and have very tough demands. This is largely due to the fact that the money involved is large and they ride on other people’s money. Everywhere you go, you’ll find professional managers of every investing firm thoroughly checking your business plan, so as to know how far it can go!

The very basic thing to keep in mind is that the investors will carefully examine the key factors related to your venture in a very meticulous way- including location, business structure, market targeted and type of business. Looking beyond these basic details they’ll focus on further key factors which are as follows-

·Strategy- Any business plan without a clearly stated strategy is a waste. Investors keenly take a deep peek into your approach towards the business and derive how planned you are to thrive in the coming times. Without the back-end of planned, strategic moves you’ll be unable to make changes in the highly versatile business environment. Your business plan must contain a clear strategy to ensure how you’ll cope with your shortcomings and implement your business plan.

·Competitive Advantage- Every time successful businesses do not root from absolutely ingenuine ideas. An idea can be a well crafted substitute for a product or service. In every business plan you have to state the competitive advantage you would offer to the market. Even if yours is a very traditional business plan with an idea that has been implemented by many in the current scenario, yours should be able to prove how it outsmarts its competitions and is better at performance, pricing or convenience.

 

·Efficiency of the Team- Whether you accept it or not, every investing firm wishes to invest in a business venture whose team has a proven track record of being efficient and productive. Many a time businesses fall short for the want of funds mainly due to the fact that they cannot churn out statistics about how their team has experienced itself to work for a better yield.

·Research- Another thing which reflects from your business plan is the amount of research you’ve done regarding your business case. Adequate market research and competitive analysis on your part proves you to be a go getter, something which is appreciable!

·Legally Sound Offerings- The proportion of ownership which you’re planning to give in exchange for the investment should be properly stated in legal terms. Investors appreciate businesses which are ready to put things in ink without any hassles. A planned future dilution (if it’s your choice) for later rounds of investment might also be included in legal terms.