Writing Business Plans That Speak to Investors

There are an inordinate number of websites offering free templates for writing a business plan. However they fail to explain to the entrepreneur the intent, or style the business plan should adopt. Structure is important, but the key to writing any effective communication is to never forget your reader.

Copywriters learn early in their careers never to alienate the reader. The reader is king. The reader's needs and wants are more important than those of the writer. The writer is only a conduit.

I knew some writers who were so fanatical about the reader, they kept a photo representation on their desk during a writing assignment - just so they didn't forget who they were speaking to.

If you are using your business plan to raise capital, your reader is likely to be an investor. An investor is businessperson, who reads dozens of business plans each week, from entrepreneurs who all believe they are the next Zuckerberg.

So think about how you are going to keep their attention. Investors are big picture people. You have to help them imagine making thirty times their investment, by striking the right notes.

Answer these three questions early and you can hook them to keep reading.

    Problem. What pain point we are curing? Is it really significantly important to the audience.

    Solution. How are you addressing the problem? Can you create barriers to prevent competitors doing the same?

    Payment. Can you get someone to pay for it. Just because you get 1+2 right doesn't mean you get paid. The right revenue model is crucial. In fact an investor may receive the same value proposition in 1+2 from many entrepreneurs, but eventually settle on the entrepreneur who can best monetise the idea.

Common mistakes made writing business plans

    Pitch the opportunity, not the product. Entrepreneurs are passionate about their idea. However this should not be the focus of plan. If it is, your business plan is unlikely to be read by an investor. Limit explanation of the idea and instead punctuate throughout the plan the profitability of the business.

    Under estimate costs. Entrepreneurs project their costs without factoring in loading. Loading costs are not immediately obvious, example staff benefits and public holidays. These costs add up and increase salaries by a factor of 1.7 to 3, depending on the industry. Be realistic when calculating costs - you want to make sure you ask for enough funds.

    Over estimate price. Entrepreneurs over value what the market is prepared to pay for their product or service. This is because they have not accurately gauged how they will influence the perceived value a buyer will place on a product, or misread the price trend in their industry vertical.

About Futurebooks

Futurebooks is Singapore's and Hong Kong's most progressive bookkeeping company. Futurebooks offer affordable incorporation, bookkeeping, business planning and brokering, to entrepreneurs with big ambitions.

Whether your goal is to be acquired or to be more profitable this quarter, Futurebooks provide planning to keep your business on track and bookkeeping services that streamline the journey.