There are several sections of business plans that investors review closely. It’s
true that they are all drawn to the bottom line. But some investors also look for
uniqueness in plans.
Entrepreneurs who are looking for funding opportunity should first show investors
that they are serious about their business plans. Entrepreneurs should be able to
reassure investors that they have the skills to handle all the risks involved in
handling the businesses. They need to impress upon the investors that they have
“whatever it costs” to get the new businesses running.
Most business investors prefer to invest capital in new businesses which are run
by entrepreneurs who have prior business experience. This is only because investors
feel that such entrepreneurs will be able to handle risks better.
Entrepreneurs who are looking to find funding should also show strong financial
information and records. The entrepreneur‘s financials are crucial to obtaining
capital for the business. Most banks are reluctant to fund an entrepreneur who has
a poor credit rating or poor records of handling personal and business finances.
There are a lot of software tools that entrepreneurs can use while developing the
financial section of the business plans. While entrepreneurs want a financial section
that is cheery and optimistic they do not want to tweak the figures in such a way
that the business plans reflect it. Bankers and investors are familiar with the
correct content, organization and presentation of financial statements, and expect
to see them in business plans.
An entrepreneur whose credit report is not in very good shape should spend sometime
repairing his or her credit history before approaching a business investor for funds.
This will improve the investor’s chance of raising capital for the new business.
Business investors also look for flexibility in business plans. Although, investors
like to see complete and detailed business plans, they prefer to back entrepreneurs
who show flexibility in handling issues and problems.
Investors only invest in entrepreneurs who show ability to make money. The financial
section of the business plans should be detailed enough that investors are able
to understand the financial forecast easily.
Finally, investors prefer to invest capital in entrepreneurs who show a good sense
for the business.