Mantras of Business Planning: What Investors Want

Potential of Business Planing is very important, Entrepreneur of any and every startup must understand what the investor wants.

By FAIZ ASKARI

At every level, the success can be a derivative of planning. In case of business, planning means everything. Planning gives the most important elements to the entrepreneur that is control, predictability and results. While being very critical and decisive for any business venture to become successful.

It is very important that entrepreneurs spend quality and quantity time in formulating this planning.

When I interact with entrepreneurs, specifically on this topic they end up taking this discussion towards their most preferred questions, Weather they can attract investors for their business? If yes, how investors can get impressed from their business?

Now, this document could be a very good opportunity to attract and influence the investors. Here is how any entrepreneur should look at the preparation of business planning.

What Investors’ Want:

1. Control, Predictability and Tracking

We all should understand that investors, venture capitalists’ biggest expectation is to ensure that their incubated ventures are on track. So these investors spend a lot of time in analyzing the potential of startup by looking at the credibility of it’s co-founders, their understanding on business subject and business planning. The third part is vital.

So, it is advised for any entrepreneur to do extensive research and beyond just research completely understand the market. Now, list down every detailing into a document and elaborate on aspects such as relevance, target, potential and offerings. Elaborate further, highlight issues such unique offering, expertise, competition and customer demands. Remember, a good business plan serve as the framework for the startup organization and provide benchmarks to see if you’re reaching your goals. This is very crucial aspect for any and more likely every investor.

In other words, this detailing and profiling of your business plan can lead to the goal setting and help the investor to predict your growth accordingly.

Please avoid using shortcuts and strictly stay away from assumptions while preparing this document.

2. Scalable Idea with technology as an enabler

These days, specially in last few years, technology have become a favorite horse among investors. Every investor wants to ride on this. So, as an entrepreneur pay special attention towards exploring the technological avenue of your business. What technologies can drive growth for your business and how your business can become scalable by the magical use of technology becomes very critical element for any investor.

Similarly, with the advanced use of technology, the business venture can become very scalable on a cost effective manner.

Investors want to hear the relevance, scope of technology in your business planning. Interestingly the decisive factor in this can be around how you are using technology for your business.

3. Knowing the market

The business plan must have to prove that the entrepreneur is fully aware of the market. The magical factor in this aspect will be about why are you getting on to the chosen market, what advantages are you going to avail and how would your business flourish. All these aspects are the derivatives of the simple factor – the entrepreneur’s own knowledge on the market and the subject.

4. Project Clarity

In addition to the above, following are the key aspects which an investor wants from an entrepreneur:

• Mission and vision statement of the business.
• Description of your company with a complete overview on how your product or services are different from the competition.
• Description of your management team, including the experience of key team members and previous successes;
• Highlight how would your market approach will remain different.
• Very importantly. the cash flow management . Investors wants to know this aspect in order to make sure about entrepreneur’s own or organization’s financial literacy levels.
• Emphasize on revenue projections can give confidence on the business plan.
• The long term vision, expected scalable growth and at the same point the exit plan. Investor would like to understand both the scenarios. So, it is important to list down the prospective growth story and highlight the scalability of the business project and on the other hand, elaborate and clarify the exit plans. Mention your clarity on what if things never turn up right or as per the projections.