What you state in your business plan says a lot about the future success of your business. Venture capital firms have witnessed plenty of successful new businesses that started with a sound business plan. VC firms know what should be included in a business plan – and what should not. They also know the qualities that a business plan should possess if it is worthy of their time and money.
What are the qualities that VC firms like to see? Here are 10 that should be in your business plan:
1. A Brilliant Idea
No plan is complete without a nugget of a great idea. The idea is what sparks the interest of a VC firm. The rest will solidify their interest, but it all starts with an exciting idea.
VC firms don’t have time to review every business plan that is put in front of them. Make sure yours is brief and succinct and contains the main compelling points that are of interest to a VC firm.
Be absolutely clear about what your idea is and how it will achieve success.
4. Know Your Market
Do you know who will buy your product? What are the demographics? How will you market to them? Let your potential VC funding firm know that you completely understand your market.
5. Show a Large Market
VC firms will invest in startup companies with a potential for big earnings – which means having a big target market. Show VC firms that your product will fit into a large market.
6. Your Competitive Advantage
Why will your target market buy your product rather than the competition? This needs to be addressed honestly and with crystal clear focus so VC firms know why you set apart.
7. Existing Contacts
Have you already established potential partnerships with other successful businesses? Do you have a top industry business ready to buy your product? VC firms like to know that you already have potential help and customers waiting.
8. Management Team
The quality of your management team will be a top priority for VC firms. Show that you have a team assembled with the best experience and qualifications.
9. Demonstrated Product Success
If your product has already been developed and shown sales potential, prominently display your sales success.
10. Avoid Anonymity or ‘Hiding’
Don’t try to hide information a VC firm. Your plan will more likely be rejected.