How to create a business plan for an investor?

What is a business plan and how to write an effective document for an investor?

Many people think that it is enough to simply ‘light up’ an investor with their idea. They say they just come in, say a few words about their cool startup, and the money is already in their pocket. But it doesn’t happen that way!

An investor is not just a person with money, but also a rather demanding client. He wants to see that you are not just dreaming, but also determined to work.

Therefore, you need to be prepared for everything: know your business to the smallest detail, have a clear plan and answer any questions without hesitation, and you know what helps you go through this path without nerves? A business plan. Of course, not all investors will say directly: ‘Show us your plan,’ but having it is like having a hidden trump card up your sleeve. When you write a business plan, you not only structure everything for yourself, but also show investors that you are serious and ready for any challenges.

What is a business plan? It is your guide to the business world. It helps you not only clearly define where you want to go, but also understand how to get there.

Why do investors want to see a business plan?

In fact, investors are not as interested in the business plan document itself as they are in what lies behind it. It is your ability to understand all aspects of your business. Having a plan shows that you have taken the matter seriously and thought through every step of the way, from your sales strategy to the competitive environment.

When you work on a business plan, you dive into important questions: who is your customer, what problem is being solved, how are you going to promote your product, and who will you compete with. These are the answers investors are interested in.

And even if no one asks you to show this plan, you will be ready to answer any questions. And if they do ask? You have everything at hand, and you can easily provide the document. After all, what could be worse than turning up at a meeting with investors and realising that you have nothing to show?

In addition to strategy, investors are also interested in the financial side of your business. They want to see how you plan to make money, what you need to achieve profitability, and where the money will go for development. This is all part of the so-called ‘business model.That’s why a clear financial plan is a must-have for any startup.Finding the time to create one is an investment that will definitely pay off. I’m telling you this as a person with extensive entrepreneurial experience.

How do you create a business plan that will ‘light up’ investors?

Let’s be honest – no business plan is perfect. Investors know this because they have watched countless presentations over the years, read hundreds of plans, and have seen exactly how some companies succeed and others fail.

So why write a business plan at all? For me, the answer is simple – it’s not about the perfect document, but about the process. Writing a business plan means that you have carefully thought about your idea, know what you might face, and are ready for the real questions. Investors do not expect your plan to be flawless, they want to see that you have invested time in mitigating risks and being prepared for any challenges.

? So how do you write a business plan that will impress investors? It should contain the following information.

Points in your business plan:

• Where are you going? Show us the map!

When investors are looking at early-stage startups, they want to know where you are going. It is important for them to understand how you see your company in the future. How do you imagine your customers and what problems will you solve? Of course, realising this vision may take years, and it is likely that your plans will change over time. But the most important thing is to demonstrate that you are not just thinking about tomorrow, but have a clear idea of how your company will develop in the long term.

? Describe your company’s long-term vision. It should be a clear and inspiring idea of where you want to be in 5-10 years. For example, ‘To become the leading provider of environmentally friendly technologies in Europe’.

• If you want your idea to be bought, show them that it’s great!

Investors are picky buyers, and they need more than just a cool concept. They want to see real evidence that your product or service solves specific problems for your audience.

Imagine you’re selling a gadget for walking dogs. You can talk about how cool and convenient it is, but if none of your friends have a dog, the investor will think twice: ‘Who are you going to sell this to?’.

Therefore, your business plan should contain clear data that proves that you will be able to sell your products. And if you already have first sales or satisfied customers, this will only strengthen your position. Investors want to be sure that your idea is not just attractive on paper, but already has a real chance in the market.

? Clearly define who your customers are and what their needs or problems are that you plan to solve. For example, ‘Our customers are small and medium-sized businesses looking to reduce energy costs through innovative solutions.’

• Where will my money go? Tell us more!

When I see a great business idea, I want to invest in it. But before I make a decision, I want to clearly understand where my money will go. You need to show me not just numbers, but a real plan for how you will spend every dollar. It’s important that the business plan demonstrates that the startup will not only be able to cover all planned expenses and ensure a stable cash flow, but also have a reserve for unexpected expenses. This not only demonstrates a serious approach to money management, but also allows me to make sure that every investment works for the business.

? Provide realistic financial projections for several years ahead. Include a forecast of income, expenses, and required investments.

• Who is on your team?

Do you have a great idea? It’s a good start, but it’s only part of a successful business. Many people have great ideas, but the real success comes from those who know how to implement them. When I look at a business plan, the first thing I look for is people. Who is behind the idea? What are their skills? Can they turn your dream into reality?

Your management skills and the experience of your team must be up to scratch. If you haven’t filled all your vacancies yet, that’s okay. The key is to show that you have a clear understanding of the key people you need and how you plan to attract them.

Investors want to see that you have a team that can handle the challenges and implement your idea. Therefore, try to tell a good story about your key employees, their experience and competencies. This will help to create confidence that your idea is not only promising, but also has a chance of success thanks to a strong team.

? Be sure to include a section on the team in your business plan or presentation. Describe the key employees, their roles, experience and skills. For example, ‘Maria is the CEO, has 10 years of experience in managing startups in the technology sector’, ‘Alexey is the CTO, a software development specialist with experience in leading IT companies’.

• How do we make money together?

When I invest in your business, as an investor, I am interested not only in how you plan to develop the company, but also how you are going to return the investment. It is important for investors to know how and when they will be able to get their return.

We are talking about an exit strategy. This can be the sale of the business to a large company, entry into the stock market, or other options. The main thing I want to see is your action plan, which will show how you plan to implement this strategy. It is important to have a clear idea of how you will achieve this goal and what steps are required.

 

Show that you have thought about all possible options and understand how your business can become profitable not only for you but also for investors. This will help me (and other investors) to make sure that you are serious and have a plan in place in case you want to exit the business or are forced to.

? Describe some potential exit routes for investors: sale of the business (M&A), IPO (public offering), sale of a stake to other investors or venture capital funds

How to create a business plan?

So, you already know how to create a business plan, but there is one thing you need to know. It’s not always needed right away. Often, investors want to see a brief overview of the idea to see if it’s worth going into detail, but that doesn’t mean you should ignore the preparation of documents. To make a great impression and show that you are really serious about your business, prepare a few key documents.

Your Business Plan and what documents are required?

• Cover letter

In the age of digital communications, it’s important to have a great cover letter for your fundraising campaign. It’s your chance to get the investor interested, so keep it short and concise, but informative at the same time.

The secret to a successful letter is a compelling story. Explain what real problem your target market has and how your product or service solves it. Don’t try to disclose all the details of your business in the letter; your goal is to attract attention and get an opportunity to present your project in more detail at the meeting.

Make your cover letter short, interesting, and to the point. This way, you can effectively interest the investor and encourage them to continue the dialogue.

• Pitching.

When you finally get that long-awaited meeting with investors, it’s time to make an impression. You need a great pitch to get your idea across and get them interested. It’s your chance to show that you not only know what you’re doing, but also know how to present it in a way that will get everyone excited about your idea.

It’s important to cover the basics:

• what problem you are solving;
• how your product does it;
• who your customers are;
• why your offer is relevant.

But don’t just present the facts – engage investors to the point where they want to know more. This is your chance to hook them and show them that your idea is worth their money. Therefore, the presentation should be simple, interesting, and exciting!

• One-page outline

After the cover letter, investors may want a little more detail. And this is where the executive summary or one-page plan comes in. It’s an opportunity to explain your business in a little more detail, but still concisely.

One or two pages is enough to cover the basics: what your business does, who your customers are, what your model is, and how you plan to grow. This can be your pass to the next stage – an invitation to a conversation or meeting. So make sure this document is clear, interesting, and helps investors get a clear picture of your idea.

• Financial projections

Investors always want to see clear numbers. It is important for them to understand how your business plans to make money and how realistic your expectations are.Therefore, you will need specific financial forecasts: sales forecast, expense budget, cash flow, income statement, and balance sheet.

If you already have results from previous periods, don’t forget to demonstrate them. It is important for investors to see the key indicators of your business. They want to understand how your business operates, what the risks are, and whether they can get a return on their investment. Therefore, be prepared to share everything you need to and give them full access to the ‘under the hood’ of your business.

To sum up: Sample business plan

Key points to include in a business plan to impress investors:

• Executive summary

This is essentially your business plan in a nutshell. It is most often written at the end, when all other parts are ready. It’s your chance to give investors a quick overview of what you’re offering and why it’s great. Attract interest and show why your business is worthy of attention.

? You can also use your executive summary as a separate document to give investors more details in a way they can understand. Let it be a clear and concise introduction to your business that will encourage further reading.

• Prospects

In this section, you explain why your idea is worth investing in. You should have a clear idea of the problem you are solving and the solution you are offering. Explain why your solution makes sense and how it solves a real customer need.

? Also, be sure to include any data or test results that prove that people are willing to pay for your product or service. If you’ve already received positive feedback from customers or have made your first sales, don’t forget to mention it. This will help investors understand that your idea is not just on paper, but already has real potential.

• Market analysis

When analysing the market, it is important to clearly understand who your customers are and what key trends are affecting the market.

? First of all, define your target segment: who are these people, what do they care about, and how does your solution meet their needs. Next, look at the bigger picture – is this market growing? Are consumer habits changing?

This knowledge will help you see opportunities for growth. Also, don’t forget to conduct a competitive analysis and explain why your solution is better than what others offer.

• Marketing and sales plan

When it comes to marketing and sales, one thing I’ve learnt is that a good product alone does not guarantee success. In your business plan, always clearly outline your marketing strategy – how you plan to reach your customers.

? All the details are important here: what campaigns you will launch, with whom you will build partnerships, and what specific initiatives will help you stand out from the competition.

Also, don’t forget about the sales process. If your transaction cycle is long, you need to explain how you plan to lead potential customers from the first contact to the purchase. It is important for investors to see that you have a clear plan not only to attract but also to retain your audience.

• Financial plan

? Let me say right away that these are not just dry numbers. Create a profit and loss forecast, plan cash flows, and balance the company’s financial position.

Always try to be optimistic, but at the same time remain realistic. Of course, the accuracy can vary, but it is important to document all assumptions and plans for the business so that investors can see how you intend to achieve financial success.

WOW Mentor?

Yes, or you can immediately come to me as a business partner, we will start your pumping as an entrepreneur at the beginning of the first month, the second … as long as you need? to feel a confident support under you ?