Various Business Plans for Various Readers

 

Did you know that the business plan you create will differ slightly depending on who you present it to? Yes, it will, and this is something to keep in mind as you write your business plan.

A Venture Capitalist is a high-net-worth individual or company who wants to invest in a business and then exit with a healthy profit. A venture capitalist typically represents a group of investing companies and individuals who are backed by companies. It is unusual for them to invest with their own money. They also have a tendency to invest large sums of money after carefully analysing the investment risk associated with the company seeking investment.

This means that they prefer to work with established businesses that are looking to expand or grow quickly. They anticipate a high rate of return on their investment, typically greater than 25%. A Venture Capitalist will expect to have a high level of control over the company, as well as a seat on the board of directors and voting rights with their shares.

It stands to reason that when writing a business plan for a Venture Capitalist, you should include their potential exit strategy, such as an IPO, as well as your proposed contribution and involvement with your company.

When you approach a potential Angel Investor. These investors are more likely to invest in start-ups and companies seeking lower-level funding. They also take on more risk than a Venture Capitalist. Angel investors typically invest in a company that interests them and frequently wish to become involved with the company as part of their investment. They are the place to go if you are looking for business mentorship to help you grow your company. They anticipate a lower percentage return on investment, but are still looking for a 20 percent to 30 percent return. The Angel Investor will expect shares in exchange for their investment, but their control will typically take the form of co-managing the company with the other major share holders.This investor desires to be involved in a business that piques their interest. That is why it is critical to emphasise the attractiveness of your industry, the business, and how they can become involved in your company.When we visit a bank. Banks will not lend unless it is almost certain that they will be repaid. So, when they seek a loan, they are looking for some sort of guarantee, and the most common one is a charge over your or your company's property. So, if you have property, machinery, or other assets that can be charged, emphasise this in your business plan. Banks also do not lend large sums of money to new businesses. What they are looking for in your business plan is evidence that you have thought long and hard about your business model and how you will make a profit in a short period of time. They, too, like the Angel Investor and Venture Capitalist do not lend money to pay wages whilst the company is establishing itself.

A few things to keep in mind when writing your business plan: • Your executive summary is critical and is the first section of the business plan that is read. It should summarise the key aspects of the business while also pique the reader's interest to move on to more detailed information. Because it is a summary, one trick is to write it in draught format at the start of your business plan writing so that it can help you organise your business plan. After you have written your business plan, the executive summary should be tidied up and completed as a check-list that you have included everything. • Your business plan should be cohesive, with logical connections from one section to the next. It should be able to tell a storey of how you are planning to set up, manage and expand your company.

It should be well-structured, with an index and page numbers, so that the various people who read the plan can quickly find their preferred section. • Write your business plan for two types of readers: the technical person who wants detailed information and figures, and the business person who wants to see how you're setting up your business and is looking for business credentials such as a great fulfilment process and adequately skilled staff becoming involved. • Finally, your business plan is the foundation of your company, but it should change and evolve over time, just as your company does.