What Investors Look For In A Business Plan

Most plans have many projections about what will happen in the future. But, they should also be laden with information on the business’s past and the market in which it is operating. While projecting future performance is an important part of a plan, it is often the market information and past performance that will convince an investor that the opportunity is right for them.

Some of the critical areas include:

  • Company Analysis
  • Customers
  • Market
  • Competition
  • Management Team
  • Financial Projections

In the company analysis, data must be shown regarding the venture’s record to date, if applicable. This would include financial results, product launch dates, etc.

Data in the customer, market and competition sections should strengthen the business case. These should include facts about the market size, the latest trends in the industry, customer requirements, and competitors’ products and services. Citing reliable information sources, such as an equity analyst report, lends credibility to the plan.

One of the key things investors look for is information on the management team. Business experience, educations, and accomplishments of key personnel are very important to investors. This section should show investors how the unique experiences of team members qualifies them to successfully execute the plan.

The financial section focuses on projection for a 3-5 year time horizon. These projections should be based on assumptions that can easily be validated. They will be challenged and you must be ready to defend your assumptions.

Investors will invest in businesses when they are confident of success. By laying out concise, factual content you greatly increase your chances of getting funded.