Here are the 5 most important aspects of the business that investors want to read about in your business plan:

1) That The Company Has Focus

The company has clearly defined its business and can state it in a single strong sentence that says it all. Yes, your plan probably will have a more expansive description in its executive summary but you need to open your plan with that one simple declaration to show the clarity of your vision for the business.

2) That The Market Has Potential

The company has a large existing market for its products and services. If your company does not have significant growth potential then it is probably not going to be of interest to many equity investors. If you are shooting for debt based capital that may not matter most to them (market stability would be though so keep that in mind if your plan is geared towards raising debt based capital); but to an equity investor growth is of paramount importance and the size of the market signifies the opportunity potential.

3) That The Company Has Specific Solutions For Their Market

The company has identified what its customers most need and has created a value proposition for them to make it a simple “buy” decision. If there is nothing unique or distinct about your company’s products/services then you do not have a defensible position in your market. Defensibility of your market position is of key importance to investors and funding sources.

4) That Customer’s Show A Readiness & Willingness To Buy From The Company

In an ideal situation, the company’s customers have a recurring need for their products and/or services, with a reasonable sales-cycle and opportunities for premium up sell of additional products & services.

If you don’t have customers ready and willing to buy now … then that does not bode well for interest from most investors and funding sources. If your market is a long-term development type of proposition then your company will need to prove that it is truly a disruptive business model that will have people flock to it once it is functional. Its not so much “if you build it will they come” but rather “if you build it will they buy?”

5) That The Company’s Main Dynamics Are Strong

What are the main dynamics of a company? Simply put it is two components: a sellable product/service and a management team that can run the business well. Investors and funding sources want to know that the company has created unique solutions superior to their competition. And that the management team consists of smart people able to deliver products/services to their customers, control expenses and make a profit … repeatedly.

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If you create your business plan to address the above; then you are ahead of what most people end up with in their business plan. Weaknesses (dilution) caused by putting too much of the wrong content and not enough of what mattes most, kills interest in a company’s plan. It’s the answers to these 5 important aspects that investors and funding sources find most interesting. How well you answer them will affect the outcome of your search for capital.

In my next post I will get into how to use these 5 as your guide for creating (or revising) your business plan to make it an optimal document that says what it should. Be sure to watch for:

How To Really Get Your Business Plan Read (by investors & funding sources)! Learn how to create the type of business plan that investors and funding sources will enjoy reading and will take action on.

Dennis Lowery
Adducent, Inc.

Over my next posts, I’m going to share with you some important things that I’ve learned over 26 years of business experience from some of the most successful investors, investment and venture capital firms in the world about how they read business plans and what they look for in them.

First some basic advice: With business plans, size does not matter.

Let me say that again.

Size does not matter.

Never lard up a business plan just to make it a hefty read, thinking to “wow” people based on its bulk. That does not impress experienced business people, knowledgeable investors and funding sources.

Experienced and successful business professionals know this and focus their business plan to make it concise and succinct; one that hits all the “hot buttons” but does not say more than it should.

If you use a template to create your business plan, use it as a guide only and modify extensively to give it its own distinct identity. Strip out and replace any “boiler-plate” language that is not necessary and put in only the important things you need to convey (read on to learn what that consists of).

If you hire a business plan writer (who may write well but does not have a great deal of business experience), be sure not to just accept what they give you as being the best for you. Make sure it answers the five most important things (we’re getting to them shortly) that investors and funding sources look for … no more … no less.

What to leave out of your business plan is just as important as what to put in!

• With business plans, telling them you graduated from John Smith high school, love cats and your hobbies are snorkeling and bear wrestling do not matter.
• Telling about your dream to own your own business does not matter.
• Telling them any thing not directly related to the business or your capability to run that business, does not matter – leave it out. Let that simple rule govern what you put into your plan.

You get the idea without me having to add more bullet points (see … less is more!).

What does matter?

I’ll get to that in my next post, because if your business plan does not have what matters most – and you’ve filled it with things that don’t – you have wasted your time and more importantly someone else’s time (and from the all important point of attracting an investor or funding source that is a death blow).

You get one shot at a first impression. Don’t blow it!

Be sure to watch for:

The 5 Most Important Things Your Business Plan Should Contain (that investors want to read about)

Until then best wishes and good fortune to you (and fortune favors the prepared),

Dennis Lowery
Adducent, Inc.