Top Questions Business Plan Investors Ask

Top Questions Business Plan Investors Ask

Business planning is essential for any business, especially if you’re looking for external investment. When pitching your business idea to investors, they will ask you many questions about your business and its operations.

Receiving those questions from investors means that they are interested, yet the more important question is whether you are ready with your answers to your business plan or not. Therefore, it is vital to have a professionally written business plan that outlines how the business can fill a gap in the market and the opportunities it will bring.

By hiring a business plan writer, business owners will be fully prepared for any of these questions investors may have. Professional business plan writers know exactly what needs to be included in a business plan to make sure it stands out to potential investors and answers any possible questions they may have regarding the business. So, let’s look at some of the top questions business plan investors typically ask:

#1 Is There a Skilled Management Team?

Investors like to fully understand the management team behind the business, just as much as understanding more about the product or services. Investors will want to know if the team has the right set of skills and experience to grow the business. Some frequent questions investors may ask include:

• Who are the founders & key leadership team?
• What relevant experience does this team have?
• Is this team capable of executing the business plan?
• What are the plans to scale & grow the business in the future?

#2 Is There a Market Opportunity for the Business?

Investors will be looking for how big the market potential is for the product and services you plan to sell. They would also like to see how the business will grow in time and try to understand their potential return on the investment. To ensure these answers are readily available, a well-written business plan can provide actual data relating to the percentage of the market that the business plan captures.

“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.” — Dave Thomas, Founder of Wendy’s

#3 What Has the Company Achieved So Far?

A crucial factor for investors that indicates whether the company is worth investing in is that if the business would have early traction with its customers or not. If the answer is yes, the business will be more likely to receive funding from investors or venture capitalists.

To answer this question, business owners must ensure they clearly outline this in their business plan with evidence to show early traction. A business plan writer can help to show any early traction and what the business has achieved to date in a way that appeals to investors.

#4 Do the Founders Understand the Financials & Key Metrics?

Investors will want to know if the founders understand the financials and key metrics of the business. Therefore, business owners will need to show that they have complete control over the business’s trajectory. An effective business plan can provide this information and a thorough understanding of its financials and key metrics. 

Please contact me here to discuss what we can do together to make your business plan right and appealing to the investors. If you are in Vancouver, we can meet for a business plan discussion. If you are located outside of Vancouver, I will be happy to jump on a Zoom meeting and discuss your business plan needs. As a Vancouver business plan writer, I work with clients from all walks of life. 

How to Estimate Startup Costs – Writing a Business Plan

How to Estimate Startup Costs – Writing a Business Plan

Simply put, startup costs are the money you’ll need to launch your business and operate it for one year. One of the fundamental roles of a business plan is to help you determine the amount of money needed to start your venture. It’s easy to begin strong, but even the best businesses can stutter and stall simply because of unrealistic goals and underestimating the needed financial resources. If your business gets mired down financially, so does your credit, and you’ll soon find out how difficult it will be to secure more money. You may also find yourself paying a higher interest rate to non-traditional lenders. The simplest way to avoid this pitfall is due diligence and careful consideration of the startup costs. Start-up costs are crucial for your bank loan business plan and investor business plan, and a business plan expert can help you navigate these. Taking advantage of a business plan writing service is money well spent and a legitimate deductible expense. If you’re unsure who to hire, a good starting point is an internet search along the line of “business plan writing services near me.”  

The Sections

The easiest method to estimate startup costs is to work out three sections – spending on assets, spending on expenses, and a 12-month sales forecast. 

Spending on Assets

Businesses fall into three categories – brick and mortar, service, and online – and assets will vary for each. Startup assets are those items that are essential to launching the business. The keyword here is “essential.” For example, while a general contractor would love to have a new truck with all the bells and whistles, it’s unnecessary when an older reliable model does. Brick-and-mortar businesses will list assets such as desks, shelves, tables, cash registers, and inventory. A service business such as mobile pet grooming will include items like a vehicle, a table, scissors, and shears. An online homemade soap business asset could consist of pots, thermometers, moulds, oils, etc. Itemize each asset along with the cost. This will require some time and research, but generally, the information is right at your fingertips. Please resist the temptation to include computers and technology as assets because they are, in fact, expenses and can be deducted from taxable income.

Spending on Expenses 

Expenses can be put into one of two categories. The first is one-time expenses, things that you purchase once. These include incorporation fees, permits, logo design, website design, signage, and computers and technology. The second category is ongoing expenses, and items in this list could include business taxes, accounting services, business plan writing services, legal services, insurance, payroll and benefits, and utilities. When making your pitch deck to lenders, be prepared to give a high-level view of fixed (lease, insurance, utilities) and variable (payroll, shipping, etc.) expenses. After listing assets and expenses, add the two together. 

Sales Forecast

The third list determines how much cash will be needed for the period between the business launch and when it finally has the sales to cover costs and expenses. The most effective way to do this is by creating a monthly sales forecast spreadsheet covering 12 months. Many factors can cause business income to fluctuate. A furnace repair business, for example, will likely experience a lull during warmer weather, and a gift store is usually quite hectic around significant holidays. For each month, calculate the estimated sales, costs, and expenses. Subtract the costs and expenses from the sales for each month. This will provide a clear picture of potential cash shortfalls and is helpful in projecting when a business is likely to break even. Working out startup costs is a great time to talk to folks who are running similar businesses. Your local chamber of commerce is another solid resource. Connect with experienced business owners who are almost always pleased to lend a hand or dispense valuable advice to new entrepreneurs. 

One last caution

Avoid the temptation to “bootstrap” your startup costs. Bootstrapping happens when an entrepreneur attempts to spend as little as possible and stretches every single dollar. The danger in this behaviour is underestimating your needs and tanking the business due to a lack of funds. Looking for business plan writers in Canada? Contact me here, and I will be happy to help you estimate startup costs for your next business plan. 

How to write the SWOT Analysis section of your business plan

How to write the SWOT Analysis section of your business plan

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. It’s an important technique that allows businesses to identify the advantages and disadvantages their company may have at present or in the future. The SWOT analysis is a critical part of the business plan. It plays a crucial role in determining the owner’s industry knowledge and realism. Both of these are vitally important if you’re looking to secure partners, finance, or decide how to grow your business continually. It’s the opportune time to analyze your market, fellow competitors, and target customers. Outlined below are tips to help you build a robust SWOT analysis for your business plan.  

Tip 1: Use accurate data. 

Create validation behind each part of your SWOT analysis with the use of accurate data. For example, if your company’s strength is its high-quality work or one-of-a-kind customer service, support your claims with customer testimonials or stats representing your percentage of repeat business.

Tip 2: Be concise.

Prioritize each section of your SWOT analysis by selecting only high-priority vital elements. A great way to do this is by grouping situations. If you happen to have four weaknesses related to lack of finance, bundle them under lack of financial resources rather than listing each situation that stems from the exact cause. 

Tip 3: Identify opportunities. 

Knowing the opportune time to act upon an opportunity is essential at any stage of business as understanding the timeframe in which specific opportunities will be available to you. By identifying a timeline, you’ll be able to prepare your business to take advantage of current and future opportunities as they become available.

Tip 4: Develop strategies

Perhaps the most significant advantage of creating the SWOT analysis for your business plan is reflecting and developing strategies that allow you to leverage your strengths and opportunities and mitigate your weaknesses and threats. Remember that opportunities and threats are external factors you don’t necessarily have complete control over, such as the actions of your competitors, customers, economy, and regulatory and seasonal changes. External factors require you to be able to adapt and pivot your business strategies as changes occur. Strengths and weaknesses are internal factors within your business, such as product features, location, distribution, staff, company structure, financial resources, and quality control procedures. The actions of the company can entirely alter internal factors. When creating your SWOT analysis, use the opportunity to evaluate how your strengths can minimize your threats and how your opportunities can reduce your weaknesses. 

As a critical part of your business plan, the SWOT analysis requires you to research and dig deep into what has and hasn’t benefited your company’s performance. Refer back to the points above when writing your business plan’s SWOT analysis section. Creating a solid, well-thought-out SWOT analysis will allow you to better utilize your strengths and opportunities and create a strategic plan to conquer your threats and weaknesses and reach your business goals.  Stuck on how to write a business plan?  Looking for business plan experts or just want to chat and bounce ideas? Get in touch today to find out how much a professional business plan writer costs. 

How to Define Your Marketing Goals (SMART)

How to Define Your Marketing Goals (SMART)

You’ve probably gotten the hint by now that I believe Planning. Is. Everything. Like Eleanor Roosevelt said, “It takes as much energy to wish as it does to plan.” How’s that for a real talk? As you fine-tune your advertising strategy (e.g., business planning and choosing marketing avenues), be sure to spend some time evaluating your marketing objectives.

Marketing objectives should precisely spell out what you want to accomplish through your marketing activities – within a specific timeframe – as you promote your products or services.

Setting objectives will help you set meaningful goals and create marketing strategies that support your big-picture business objectives. It will ensure that your marketing campaigns aren’t just gung-ho shots in the dark but are successfully contributing to your bottom line. And there are a number of important factors to keep in mind to ensure that you are setting practical marketing objectives.

There is a nifty acronym to help you remember these factors. All you need to do is ensure your marketing objectives are SMART: Specific, Measurable, Achievable, Realistic, and Timely.

The SMART approach not only ensures that your marketing activities are planned and managed effectively but also allows you to check back and determine whether your marketing activities were as successful as planned. If not, it serves as a guide for how you could direct your energies going forward. 

Specific

Are your marketing objectives clear enough? Have you written out exactly how success will look for you and your business and how you see yourself getting there? 

Objectives should not be broad, sweeping, or arbitrary. Also, use verbs (doing words) wherever possible to indicate exactly what action needs to be taken. Identify the exact steps of your plan and the market segment you are targeting. And then make sure your plan is clear enough that you can your objectives becoming ideal outcomes.

Measurable

Each marketing objective must be quantifiable. Look at whether a unit of measurement can be applied to determine the level of success in meeting your objectives, such as measuring a market share percentage or increased revenue figures. 

• What tools will I use to measure the success of my marketing activities?
• How will I know whether my activities have had any impact?
• How will I get my hands on this data?

Achievable

Lofty goals are exciting to set, but if you can’t see a direct path towards making it happen, then it’s ultimately useless to you. You want to tick off your objectives within a reasonable timeframe. If your marketing objectives are too intricate or long-term, break them down into simpler, shorter-term goals. Identify your initial to-dos, things you can start today or tomorrow. From there, branch off into subsequent small jobs that will allow you to see your progress.

Realistic

Similar to making sure your objective path is achievable, you need to be realistic about what you can accomplish. We are all capable of extraordinary things, but if you set your sights too high from the outset, it can be quite disappointing (and downright disheartening) when things don’t go to plan.

Realistic doesn’t mean easy. Set targets that you and/or your employees will need to work hard to accomplish but ultimately have a chance of meeting. Check that every objective is possible within your proposed timeframe and your set budget.

Timely

Having a concrete end date is a powerful motivator. Open-ended marketing objectives often fall short because, well, they can be put off until tomorrow. Determine when you want to achieve your objectives, and do not adjust the date. When you reach that end date, measure your success rate using the measurement tools you planned earlier. Celebrate successes and learn from your mistakes. Your next, improved marketing campaign will aim to circumvent those losses. Need help? Let’s chat.