Whenever you decide to start your own business there is a pretty high chance you are going to need substantial capital. You can do this from banks, lenders, or maybe private investors, but in order to secure funding and present your vision, you need to pitch more than just a creative idea. You will need to give them numbers, more specifically costs and profits, and also an explanation of why you think things will work out. In other words, you need a business plan and some financial projections. Here we will go over some tips on what you need to put in your business plan and in your financial plan.
Present Your Idea
This is usually the starting point of any business plan, and it’s called an executive summary. Here you need to present your idea, its unique proposition value, why you believe it will work, point out potential strengths and weaknesses, etc. Basically, you point out everything that will be explored in-depth throughout the rest of the business plan.
You also need to show your investors you are aware of the competitions. This confirms the theory that there is a demand for your product or service and shows that you know what you are up against. You also need to state why you believe people will opt for your product or service once it becomes available.
Many businesses fall apart simply because they can’t secure enough funds to maintain their costs, and it’s because customers are unaware of the service they provide. This is why a marketing plan is extremely important. You need to have a well-developed strategy to be visible on a local level or have a reputable marketing agency that can back you up.
This is another crucial component for securing funds because investors want to know how you will pay them back. So, list out your cost centers and profit centers, upkeep costs, and financial milestones. Make sure to list the price of your service, and the cost for providing your service, and also mention how you plan to resolve the issues if things go south. This means listing assets that will serve as collateral if you don’t have enough funds to pay back the loan.
Finally, you need to show the investors you are aware of the risk of possible negative outcomes. Regardless of the idea, there are always potential risks that could put a dent in your plans, so you need to prepare some contingencies. This shows you really gave your idea a thought and that you know how to act in order to mitigate the possibility of negative outcomes. You might think that it will make your idea look bad, but in reality, it’s actually reassuring that you know what you are doing.
So, this was a short overview of how to organize and present your business ideas to investors. Hopefully, this will come in handy when you start working on your own business plan.