Investment companies review a large number of business plans every day, and how to stand out among the many business plans and attract the attention of investment companies depends entirely on the quality of the business plan. Usually an investment company's first impression of a company or a project is formed from the business plan. They believe that if a company or an entrepreneurial team cannot even write a business plan, then the company is not considered a good company. , this team is not even a good team. Because the emphasis on business plans reflects the ability and vision of business managers and team leaders from one side. It is absolutely believed that a complete business plan is a key factor in whether a company can successfully raise funds.
Business plans generally include the following ten parts. Lao Xie believes that a good business plan requires a thorough study of the psychology of investment companies, because they are a group of hunters who "like the new and dislike the old."
1. Executive summary
It is a one to two page summary of the business plan. include:
1. A brief description of the business (i.e. "elevator speech")
2. Opportunity overview
3. Description and forecast of target market
4. Competitive advantage
5. Economic conditions and profitability forecasts
6. Team overview
7. Benefits provided
2. Industrial background and company overview
1. Detailed market description, main competitors, market driving forces
2. The company overview should include a detailed product/service description and how it meets a key customer need.
3. Be sure to describe your entry strategy and market development strategy
3. Market research and analysis
This is a window into how well you understand the market. Be sure to explain the following questions:
1. Customer
2. Market capacity and trends
3. Competition and respective competitive advantages
4. Estimated market share and sales
5. Market development trends (for new markets, this is quite difficult, but we must strive to be close to the reality)
4. Company strategy
Explain how a company competes, which includes three questions
1. Marketing plan (pricing and distribution; advertising and promotion)
2. Planning and development plan (development status and goals; difficulties and risks)
3. Manufacturing and operations planning (operating cycles; equipment and improvements)
5. Overall progress arrangement
The company's schedule, including important events in the following areas
1. Income
2. Break-even point and positive cash flow
3. Market share
4. Introduction to product development
5. Main partners
6. Financing
6. Key risks, issues and assumptions
1. Entrepreneurs are often not realistic enough about the company’s assumptions and the risks it will face.
2. Explain how you will deal with risks and problems (emergency plan)
3. Achieve a careful balance between pragmatism in vision and optimism about the company’s potential
7. Management Team
1. Introduce the company’s management team. Be sure to introduce each member’s education and work background related to the management company
2. Pay attention to division of labor and complementarity in management
3. Finally, introduce the leadership members, business consultants, major investors and shareholdings.
8. Enterprise economic status
Present the company's financial plan and discuss key financial performance drivers. Be sure to discuss the following levers:
1. Gross profit and net profit
2. Profitability and persistence
3. Fixed, variable and semi-variable costs
4. Number of months required to break even
5. Number of months required to achieve positive cash flow
9. Financial Forecast
1. Including income reports and balanced statements, with quarterly statements for the first two years and annual statements for the first five years.
2. Valuation cash flow analysis during the same period
3. Highlight the cost control system
10. Assumed benefits that the company can provide
This is your "selling point", including
1. Overall funding needs
2. Which level do you need in this round of financing?
3. How do you use these funds?
4. Returns that investors can get
5. You can also discuss possible investor exit strategies
When you write your business plan, you should achieve the following goals:
1. Strive to express clearly and concisely.
2. Pay attention to the market and speak with facts, so market research and market capacity need to be demonstrated.
3. Explain why potential customers will pay for your product or service.
4. Think about the problem from the customer's perspective and propose strategies to guide them into your sales system.
5. Form a relatively mature investment exit strategy in your mind.
6. Fully explain why you and your team are best suited to do this.
7. Ask your readers for feedback.
When you create a business plan and submit it to investors, you must avoid the following issues:
1. Being overly optimistic about the prospects of products/services creates a sense of distrust.
2. The data is not convincing, for example, some data are far from industry standards.
3. The orientation is products or services, not the market.
4. Not having a clear understanding of competition and ignoring competitive threats.
5. You choose to enter a congested market in an attempt to catch up from behind.
6. The business plan appears very unprofessional, such as lacking proper data, being too simple or lengthy.
7. Instead of carefully seeking out the most likely investors, you spam materials.
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