How to Attract Investors by Showing Business Planning

 

A business plan is almost essential for entrepreneurs looking to raise money to help finance their businesses. In fact, business plans are so closely related to fundraising that many entrepreneurs consider them suitable only for presentation to investors and overlook the managerial benefits of planning.

 

·         But for those entrepreneurs looking for funding, a business plan accomplishes several things. First, it helps convince potential funding sources that the business owner has thought of the idea. It also provides any actual investor with a set of financial metrics for which the entrepreneur can be held accountable.

 

·         In a sense, a business plan is a ticket into the financial dance. It would be overly simplistic to say you need to have a plan to get funding. But it's not too simplistic to say that a good plan will help you raise your funds faster, easier, and more fully than you could without it.

·         Before looking for investors, you need to know exactly what you are looking for and where that money will be spent. You have to justify the amounts you are asking and be specific: Investors don't just write checks with no idea where the money will be spent.

 

·         You can certainly ask for a little more than you need in the hope that the negotiation will bring you the amount you really need for funding, Or something reasonably close. It is also important to maintain your credibility as you will likely need additional funding as your business grows.

 

·         If you squander the money your investors have provided, you can be pretty sure you won't get a second round when you need additional funding. Having a justification for what you put into your plan is essential to getting someone to read it. Random ideas get random results.

 

·         Well thought out and justified ideas are taken seriously. It’s also beneficial to take a few minutes to make sure your business has the potential to be successful before digging for that hard-to-get cash. For most of us, our wishes about where we would like to go are not as important as our company's ability to get us there. In other words, if you choose the wrong activity, you will not go anywhere.

 

·         Many companies never get past the planning stage because their would-be founders, as part of a logical and consistent planning process, test their assumptions and find them lacking.
Test your idea with at least two variables. First, make sure that your business makes profitable sense. Second, lifestyle, because who wants a successful business they hate?

 

·         Assess the potential of your business

 

·         Answer the following questions to help you summarize your company's prospective. There are no wrong answers. The aim is simply to help you make a decision to what level your future venture is likely to match your goals and objectives.

 

·         What initial investment will the company require?, How much control are you willing to give to investors?, When will the company make a profit?, When can investors, and you, hope to get return on their money?, What are the expected profits of the company over time?, Will you be able to do the business full-time financially?, What kind of profit distribution you can you expect ?, What are the probability of the company going ruined?, What will happen if it does?, Do you have another backup plan?

·         Keep these tips in mind to help you win the loan you are looking for: Spend more time working on the executive summary.  Because investor get lot of business plans so many investors look directly into the executive summary to know what your business plan is. If you fail to capture their interest in your executive summary, go back to the drawing board and try again.

 

·         Make sure your business plan is complete. You'd be surprised at the number of business plans sent with important data missing.

 

·         Double and triple checking is required to make sure all-important components are included. Even when using business plan software, people skip sections or decide that one area isn't important.

 

·         Don't leave anything to chance. A properly written and complete business plan gives you a good opportunity of success and a better chance of getting the financing you're looking for. Be able to back up everything you have on paper if you are asked for more details. Although the business plan should have all the answers, investors, bankers and venture capitalists are shrewd and ask questions that cannot be answered in the plan. Be ready to respond to anything they throw at you. Expect the unexpected and get ready.

 

CONTACT: Unit No.450, Mastermind One - IT Park, Royal Palms, Aarey Colony, Goregaon(E), Mumbai, Maharashtra 400065 Ph:+91 8097027355, +91 9137256150, +91 9222086563 or visit http://businessplansmentor.com/

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