Sunday, August 14, 2016

How to Present a Business Plan to Investors

How to Present a Business Plan to Investors

With your business plan in hand, you confidently walk into the potential investor's office seemingly ready to show him the next big business idea. You have diagrams and charts. You have crunched the numbers and determined that your business will see 120% returns within two years.

Your plan: to take an hour or two presenting all the facts and figures to the potential investors and walking out with a huge vote of confidence and a large check. Five minutes into your presentation and one of your audience members stops you to ask, "How do you know people want what you have to offer?" Your response is a blank stare and deafening silence.

The truth: potential investors want to hear about the next great product or service. They want the first opportunity to reap the gains from a business venture, earning from them in year one, year two, year three, and so on. What potential investors look for in a business plan presentation is evidence of such long-term viability. They want proof that a demand for the business exists. Potential investors also want to see that you have the right entrepreneurial spirit and business acumen to handle that demand.

When preparing your business plan presentation, remember, brevity is paramount. Nix the idea of taking up two hours of the potential investor's time. Cut off the fat and show them how your proposed business will be profitable. Give them facts.

Show them how the business worked on a smaller scale. Provide evidence of the demand for your product or service and demonstrate how your business will grow by attracting more of its target market. Also, show the potential investors that you have the right background to handle the task. For any areas that you lack experience, introduce them to members of the management team that can compensate. The key is to sell the business plan and the leadership’s qualifications to the potential investors.

Finally, show them the numbers. Potential investors are not looking to hand out any amount of funding you request. Sure, they expect you to have a figure in mind, but they also expect you to show how you determined that amount and how you will put their investment to work.

It is up to you to give them realistic financial projections. Present yourself as thrifty with regard to your business' finances. Every start-up company would love to have the biggest and brightest, but realistically, they may have to start without.

Have confidence when preparing to give your presentation. Make sure you know all the important facts of your business plan thoroughly so that you can explain them clearly to the potential investors. Let your enthusiasm for the venture shine through as you share your plan with them. When your presentation is complete, give them ample time to ask questions about the plan. Thank them for their time. In the end, you just might get the funding you need to get your business plan in motion.

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