The current market is flooded with entrepreneurs seeking seed capital to kickstart their venture or growth capital to take their businesses to the next level. While various success stories are published in news every day, there is also a huge number of ventures that remain capital-starved due to some reason or the other. One of the main reasons for this is an inability to garner significant interest from investors.
To attract the attention of the investors and bring them to the discussion table an impressive business plan is a must. Any serious entrepreneur, whether venturing out the first time or a seasoned one, realizes the importance of the way information is communicated. A solid business plan captures & conveys the fundamentals of the business in the right manner by laying down a clear roadmap for the future.
For the business plan to be effective, it is pertinent that it covers all the aspects of a business and lays down a clear futuristic approach. The following are four key elements of an effective business plan:
- 1. About the Product: A well-laid description of the product to ensure that the vision is tied up with customers’ needs and market demands.
- 2. The Target Market: This is about understanding the customers of the product: who they are, what they need, how much they can spend, the alternatives available to them – direct as well as indirect, etc.
- 3. Business Strategy: This section tells the investors how well the entrepreneur knows the business they are engaged in and how well the business is equipped to engage with the competitive market by elaborating on a well-defined growth strategy for the future.
- 4. Financials & valuations: The entrepreneur should endeavor to forecast revenues & expenses optimistically and these should also be grounded on what’s realistically achievable. It could be helpful to consult an expert on this for an objective and professional viewpoint. This would help in arriving at the appropriate value of the business in its current state and what value it could reach to in the future.
Besides the above, certain other factors also need to be kept in mind to make the plan investor-ready:
- Self-questioning everything that forms part of the business plan to ensure that the queries from investors could be addressed. This approach serves as a crucial tool in justifying the assumptions and risk factors/underlying assertions in the business plan.
- It is important to keep the business plan clear and concise, free of jargon, well-researched, and formidable.
- Being specific is quite important in every section. Focusing on what’s specific also allows in achieving brevity.
- It is very important to keep coming back to the business plan periodically and updating it to cover the evolving market scenarios.
It takes a lot to prepare a robust business plan that presents the business case in the best way possible. A professional knows what the investors are looking for and helps to pinpoint the areas where improvements can be made.
We are one of the specialist transaction advisory firms in India. We assist our clients in formulating their business plan, financial planning, and also connecting them with the right investors for their business. Our team’s knowledge and experience across various sectors make us one of the most preferred firms for the corporate finance services required by various businesses.