10 Things Investors Look For in a Business Plan

A business plan does so much more than layout the internal structure of an organization. It provides some key insight to the money-men, the venture capitalists, the angel investors, the private investment bankers or even the traditional bankers. Remember that these people see hundreds, thousands of business proposals a month. And they’re all looking for certain things that either make them love your proposal — or send it immediately to the shredder. We’ve worked with nearly 50 investment firms at one point or another for clients for whom we have written business plans, and based on our experiences and the people involved, there are some important factors investors look for the most from the business plan.

1.) How much money is already invested? Do the client or other individuals/companies have a stake in the business?

Sometimes the difference between getting a loan and getting rejected is as simple as that. Imagine you’re coming to an investor with a fabulous business plan and you need, say, $500 million for a resort and real estate project. In your proposal you clearly state that you do not have one single dime invested yourself (yes, we had a business proposal like this once!). Do you honestly believe an investor is going to give you the time of day? Of course not. You haven’t taken any sort of risk — why should the investor?

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Business Plan Profit and Loss

The profit and loss statement on your business plan is also known as the income statement. This is a vital piece of the business plan as a whole and lets potential investors see exactly what you expect your business to profit or lose.

Using your profit and loss statement you can spell out exactly what it is you expect your revenues and expenses to be for a certain amount of time. By calculating these numbers you can make a determination whether or not your business will experience a profit or a loss for the resulting time period.

This is important for the potential investors to see as they will then have a better understanding of what it takes to make your business operate and it allows them to form a better opinion of whether or not they want to invest in your venture. Here is what should be included in your business plan’s profit and loss statement:

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Why Your Business Plan Failing Could Be a Good Thing

Did you know having your business plan fail can be the best thing that can happen to you? Sounds crazy right? But it’s true, and here is why.

Why Plans Fail

Business plans, marketing plans, heck any kind of plan is going to fail. Some just a little and others spectacularly. It’s not for lack of work or analysis. It’s because we can’t predict the unpredictable, and when we try we aren’t very accurate. Customers and markets are fickle. Something unexpected occurs. Or we just screw up and it all wrong.

» Read more: Why Your Business Plan Failing Could Be a Good Thing