Venture Capital Firms

Five Tips to Generate a Successful Business Plan

When you want potential investors to view your business and you as professionals and not a dreamy money pit, keep the following five tips in mind while you compose your business plan:

Highlight Your Great Track Record

Investors know one very important fact; your future success depends a great deal on the past success of you, your company and your executives. One way to demonstrate this is to reveal how you managed previous funds, achieved operational milestones, grown your company, penetrated a niche market and most importantly rewarded your investors. If your company does not have this history to draw on showcase instead how your team has raised other companies from inception to success.

Click here to download your business plan template <==== Prove your knowledge and mastery of a niche Niche is very popular these days in the world of business. For instance if your company is competing in the $1 trillion dollar healthcare industry, you will want to focus on a specific segment of this industry. This could be networking appliances for family doctors on the coast, for example. A business in this niche will also be competing in telecommunications, business service industry and electronics. Out of on, big industry comes many different niches and narrowing your focus will help increase the return on investment. This knowledge is something smart investors appreciate. Demonstrate the you know your customers, what they need and how to give it to them. Companies are judged by investors based on your customer relations. In your business plan should be a clear outline of how your business will deliver product to an unfilled market demand. In addition to the outline should be a timeline for moving product into your potential customers waiting hands. A business that is not able to reach the customers is not going to show a profit and in turn neither will its investors. Figure out the path from point A to point B and show it to your potential investors. Click here to download your business plan template <==== Describe how you will lock out the competition and lock in your customers. A very well known method of locking in consumers is demonstrated in the telecommunications field, specifically in their bundled services packages. When you sign up for one product you are given the special privilege of getting other services for a discounted price. Another popular lock in tactic is to waive installation fees, customers will not have to pay this fee unless they switch companies. This method actually does double duty, locks in the customer and locks out the competition in a practice known as building barriers around your customer base. Investors want to know what type of techniques you will use to retain your revenue base. Share Realistic Financial Assumptions If you want to communicate credibility and operational maturity, you need well-reasoned and sober financial assumptions or projections. Growthink, a consulting firm responsible for helping entrepreneurs raise over $1 billion in equity capital states this is very important. Some investors will never look beyond the financial section of your business plan. Your pro forma statements and assumptions much be based in reality however. Revenues per employee, operating margins and penetration need to be internally consistent and well reasoned if you want to appear credible in the view of your investors.

Comments

Got Twitter?
Then Follow us @ //twitter.com/vcgate