Did you make your Business Plan, but do not know how to show it to your potential investors? Properly communicating your business idea is key to making your venture viable.
It depends on this that the message of your proposal is effective when it comes to convincing your potential investors.
However, it is common for entrepreneurs to focus on the preparation of this important document without paying due attention to their target audience.
Hence, in the world of entrepreneurship, business plans abound that are not persuasive enough for investors, potential partners, business allies, and other interested parties.
In this article, Agriculture mortgages explain what it is and how to make a successful business plan, focused on those who will be responsible for reading it.
Business Plan, what is it, and what is it for?
The Company Plan or Business Plan is a document that analyzes the opportunities of a specific business idea.
It details elements such as economic and growth projections; the target market; technical feasibility and other fundamental factors for a functional and profitable company.
For example, a business idea could be “open an Italian food restaurant”; but, although intuition can tell us that it is a fantastic idea, its effectiveness can only be verified when preparing a business plan.
This is because a business plan forces us to ask ourselves data that will indicate the reality of that hypothetical restaurant. Are there enough potential diners in the area? What production costs do the dishes on the menu have? What competition exists in the area?
In answering these questions, we may be surprised to discover that an idea that seemed great at first is not such a great business after all. Hence the importance of establishing a business plan before investing our money or looking for investors.
Differences Between a Business Plan and Marketing Plan
It is important not to confuse concepts. A business plan or business plan is not the same as a marketing plan. Despite being two totally different issues, they are often confused, especially among entrepreneurs who are just starting out. Let’s see the differences.
A business plan defines what the value proposition will be, the target market, and the competition that already exists in the market. When this data is acquired, we will prepare the marketing plan.
The marketing plan, on the other hand, is the customer acquisition strategy itself. To design it, what is established in the business plan is taken as a basis and then we proceed to segment the audience we want to reach, as well as to develop the type of message with which we will do it.
On the other hand, the analysis of the competition of our business plan will be the guide so that in our marketing plan the elements that distinguish our brand from the others are defined.
These are complementary activities: the business plan outlines the entire operation of the company, while the marketing plan uses this information as a basis for designing marketing policies that will allow our product or service to reach our target market.
One depends on the other, but we should not confuse it, the marketing plan must be done after we have a business plan.
How an Ideal and Interesting Company Plan Should Look Like for Investors
The important thing you should understand is that the interests of your investors are not yours. You have a business idea that you want to make work; they have money, their own or someone else’s, that they want to grow.
As hard as it sounds, it is the truth: an investor is someone who wants to multiply their capital or that of the funds they manage, be they pension funds, investment funds, savings banks, etc.
Your job is to let them know how investing in your company will multiply those funds.
An ideal business plan for an investor is strongly linked to projected profitability. But beware: this does not mean making dishonest or exaggerated projections.
Investors, especially the most experienced ones, know very well when the figures they are being presented with are false.
Many entrepreneurs believe that putting big numbers will make their business plan successful because they think that by offering real data investors will be discouraged.
However, this is perhaps the worst mistake that can be made in this field. Good investors know what the growth rate of a market is and as soon as they see that an entrepreneur gives them realistic projections, they are more encouraged to invest.
Among other things, they know that they are dealing with someone who really knows the market and not someone who has no idea what he is saying.
Another element of an ideal business plan is how you present risk. What are your emergency plans for possible unexpected events?
Are you prepared to lose a supplier? Do you have reliable projections about the future prices of your raw material? Are you willing to restructure the team in case the current members do not perform or do not produce the expected results?
These are some of the questions that are on the head of your investors.
The Message and the Way of Communicating the Business Plan, According to the Recipient
A business plan is not a document written in stone, you can modify and adapt it, and even have several versions, according to your target audience.
Here we present some brief tips so that you know which elements you should reinforce depending on the person to whom you will present your plan.
1. A Potential Strategic Partner
Focus on what the other party will gain by partnering with you. More income? New insights? Access to a technology that you have, but the other does not? You must convince him that he will gain more by associating with you than not.
2. Risk capital
The main focus should be on return on capital, earnings, profits, expected growth, etc.
3. Business Angel
The fundamental difference between an angel investor and a venture capitalist is that the former tend to know more about the area, while the latter invests more guided by profitability than by confidence in the project itself.
If you must introduce yourself to a Business Angel, show yourself as a reliable reference in the sector and surprise him with your expertise in the area in which you are undertaking.
4. A Bank
Like venture capitalists, banks want to know about profitability. A good way to show yourself to them, in addition, to properly preparing your income projections, is to show your personal balances.
If your personal finances are in order, you will generate confidence, since it is presumed that your company’s finances will be too. That is why it is so important to have a good personal credit history.
5. A State Entity
The State has an obligation to its taxpayers and must be accountable to them. Therefore, your business plan must reinforce the social benefits that your project brings to the community; that is, how you will pay back the State for the investment they make in you.
It would not hurt to include a section on social responsibility in your business plan if you want to focus on obtaining state financing.
Basic Keys to Keep in Mind When Communicating the Business Plan
The audience is the key, for this reason, your focus should not be on how great your own idea sounds. Nor the effort you’ve made or how excited you are to see it working.
In reality, you should focus on its viability as a business, its profitability and its growth potential, the benefits that those who associate with you will receive, and the contribution to society that your company will make.
Remember that those who receive your business plan are not there to help you meet your goals, but to meet theirs. Business is like that: everyone seeks to satisfy their own interests. Therefore, when successful collaborations occur, everyone wins.
A successful business plan is one that considers the needs of the target audience.
A venture will attract investment or partners as long as it projects the benefits it will produce for others. Therefore, never neglect the audience that will listen to you, nor make a business plan thinking only of yourself.
An effective presentation can be the key that separates your idea from the thousands of business ideas that fail every day. So indulge your time in creating a convincing and attractive business plan for everyone.
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Author Bio: Jonathan Veers is the founder of Agriculture Mortgages. He can help you to find and secure the best farmland mortgage options to push your farm investment dreams to move forward. As a specialist mortgage broker with over 10 years of industry knowledge, he has helped new farmers, existing farmers, and rural business owners across the country.