Writing Business Plans that (Really) Matter

Business plans are not all alike and neither are angel investors, venture capitalists and loans. Then why do so many business plans seem like carbon copies of each other? Rubber stamping, so to speak, a business plan and only changing the names isn’t going to generate much interest among savvy investors. How many small businesses are ready to become the next corporate success story, but can’t seem to get investor interest? There are plenty, and many will never get a chance to find success because their business plans don’t pique the interest of angel investors or any other investor for that matter. The business plans are just too ordinary and fail to convey the uniqueness of the new idea, concept, product or service.

If you took a test and it said to name the most common mistake made on business plans, would you know the answer? The answer is: The business plan begs for money but doesn’t beg for understanding. A business plan is much more than a plea for money. It’s a driver’s manual that defines goals and objectives while providing the road map to a new destination. If the directions are clear and point right towards what makes your idea market unique, investors can’t get lost on their way to the endpoint. That’s where the financing waits. Focus on what makes your concept unique and prove you have carefully thought through the components of success – people, opportunity, context or relationship to industry and market, risks and rewards. In other words, write a business plan that really matters and not just one that fills in the blanks and makes a pitch for money. Don’t be ordinary…be unique. It’s what entrepreneurship is all about.

More detailed information and useful advice can be found at http://www.funded.com/ Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.

Private Equity Financing for Major Projects

If you are looking for private equity financing for a major acquisition or business expansion project, the best approach is to use a firm that raises this type of financing for businesses. There are many good reasons for making this recommendation, and they are all for the benefit of the business needing an injection of capital.

  • Can identify the private equity financing groups that are most likely to be interested in your expansion plans
  • Shortens the time frame for finding and landing project money
  • Able to streamline the proposal process because have knowledge of what particular investors require before considering a proposal
  • Can assist business through all phases of the request process
  • Saves business time and money by handling many of the time consuming steps required in the search for investment money
  • Understands the entire process from beginning to end

In fact, a professional that specializes in finding financing for major business expansions or projects can also assess the availability of other types of funding including venture capital, business loans, and even angel investors. The process involves much more than just submitting a business plan. You have to balance the timing of the request, marketing efforts, selection of potential funders, negotiation process and the closing of the deal.

Experience Equates to Time Saving Efforts

It’s true that the process of finding funding from any type of investor including private equity, venture capital, angel investors or business loans can be time consuming. It’s a process that cannot be rushed but it can certainly be streamlined. Each phase of the process can be approached methodically and with a well defined strategy which leads to a targeted and thorough proposal.

Many companies have the expertise needed to be successful at producing products or services which is why they are looking for new funding. Yet many of these same companies do not have fund raising experience. The lack of experience can seriously delay the process. There are a number of steps that must be taken and using a professional that understands these steps makes success more likely and more likely to occur sooner.

Every Step of the Way

Following are some of the major phases that must be completed when applying for private equity.

  • Complete accurate valuation of business and business expansion project
  • Identify the potential financing alternatives
  • Prepare time schedule
  • Develop in-depth marketing plan
  • Market the proposal to funders
  • Respond to funder questions
  • Meet with prospective funders
  • Prepare and review financing proposals
  • Negotiate final terms
  • Prepare legal documents
  • Close
  • Identify reporting requirements

When searching for private equity, startup funding or any other type of business funding, businesses will find that using professionals experienced at raising funding can benefit the entire process from beginning to end. If you are like most businesses, once you decide the funding is needed there is no time to waste.

Successfully Attracting Angel Investors

Successfully attracting angel investors, venture capital or equity partners requires well defined strategies that prove necessity of funding and a likelihood of profitability. Finding startup funding or major project funding can be challenging, and no one should tell you otherwise. The success of your search will be highly dependent on your ability to state your case and then back it up with in-depth analysis of the business or project based on realistic data and information.

A common mistake entrepreneurs make is using faulty data in the business plan. Angel investors are savvy and have been around the block (so to speak). In other words, investors willing to give a stranger business funding for a proposal have almost certainly developed business acumen and can spot unrealistic projections in a marketing plan or financial plan. Your business plan will be closely scrutinized and each number must be backed up with economic, marketing and financial information collected through research.  It’s unfortunate that many promising proposals submitted to angel investors are turned down simply because the projections make claims that are obviously unobtainable.

Would You Ask a Banker?

One test you can give your business plan is to ask if you would be willing to submit the proposal to a banker considering business loans. The analysis that requests for bank business loans get is always in-depth and thorough. There will be dozens of forms to complete, background and credit checks ordered, and economic data compared to the data in the business plan. Business funding or startup funding is only approved when you are able to provide:

  • Appropriate analysis of the market as well as finances related to the business
  • Detailed support for claims of potential profitability
  • Investment alternatives including angel investors or venture capital
  • Clear investor entry and exit strategy
  • Clearly written descriptions of business activities
  • Convincing arguments for investing in the enterprise

The convincing arguments for investing are critical to funding approval. The business descriptions and financial statements are essential to obtaining funding, but just as important are the arguments you make. The written and oral arguments are equally important too. You ability to communicate your business vision and need to angel investors and equity partners can make or break the deal. It is a critical component of the art of negotiation.

Making a Case for Private Money

The bottom line is that approaching angel investors is the same as approaching bankers and other types of lenders. The only difference is that the angel investors are considering giving you private money. Anytime you are asking someone to lend personal funds, the presentation of your idea must be well planned and efficient. It is the first real experience your business will have in the competitive business world.