Tips for business plans and sourcing finance

Heres a few tips for those of you looking to setup a business or get some investment for your current business.

Any lender will want to know:

1. How much do you want to borrow?
2. When do you want the money
3. When will you be able to repay it?
4. Will you be able to pay interest?
5. Could your company survive a setback in its plans?
6. What security is available for lending?

Venture Capitalists will be looking for a substantial return, between 25 to 60% per annum compund, and they will also want an 'exit route'

Key points a lender or VC will look for:
The track record of:
1. The Company
2. The Market
3. The Management
4. Are the forecasts achievable?
5. Can things go wrong?

Overall you presentation should show:
1. Who you are
2. Where you are going
3. How you are going to get there
4. Are the returns worthwhile?

Some further points:
1. You should write the business plan, not someone else not involved in the company
2. Plan should be as short as possible, but sufficiently comprehensive
3. Dont use jargon
4. Dont repeat yourself
5. Support your claims
6. Dont be selective in the objections you overturn, overturn them all
7. Get a second opinion before you send to the investors, ie. a proof read
8. Final appearance of the document is important. Index, Summary, Headers and Footers, Page numbers, and who to contact and who has prepared it

Just some tips to help you on your way!

Shayman

Deleted User wrote: »

6. Dont be selective in the objections you overturn, overturn them all

Thanks! Very interesting. Can you just explain the above point? Maybe I'm daft!

Shayman

Shayman wrote: »

Thanks! Very interesting. Can you just explain the above point? Maybe I'm daft!

Essentially theres always going to be potential reasons your business plan isnt going to work or could fail. It can be easier to just take one or two of those reasons and give the solutions or answer in your business plan, and perhaps the easy way out is to 'gloss over' the ones you dont really have an answer for.

So, make sure you deal with all the potential negatives the reader is going to see and not just the ones you have the best answers for. Make sense?

Neuro Energetic Kinesiology

Very helpful hints for preparing a Business Plan. Thanks:D

byrne0f56789

Good points. However it's all about traction. You need to show sales and that you are making money. The main reason why entrepreneurs don't get investment is because they haven't taken the business far enough on their own to merit it.

Business Plans are secondary. I tend to keep them short with an emphasis on traction. You can condense the above into a 10 - 15 slide deck that investors will love.

A recent study from the Robert H. Smith School of Business, University of Maryland shows that business plans play an insignificant role in the decision making process of Venture Capitalists.

The paper titled “Form or Substance? The Role of Business Plans in Venture Capital Decision Making.” which was co authored by David Kirsch, Brent Goldfarb and Azi Gera, contains research on 718 funding requests from the period April 1999 – February 2002.