One of the questions we get asked quite a bit more and more is “Are business plans still necessary for investors?” The quick answer is….yes!
Times are changing, and there is no question that expectations have changed quite a bit, even during our time in business. We know banks and SBA-backed loans are still requiring full business plans. So, with the changing industry, what are investors looking for today?
The reality is that it can depend. Most investors are still seeking business plans and an Executive Summary, even if they have relaxed a little bit on the details. The issue is that you still need someone with knowledge of investors, and most importantly what they want to see and how they want it presented, to be on your side helping you with your pitch. Nearly all of the investors and investment groups we work with are still looking for a comprehensive business plan, full industry/market research, marketing plans, financial projections, etc.
Some investors have changed and are seeking smaller business plan documents. So how do you know what to remove and what to stress? Well, in reality, these investors are creating an extra step for you, the entrepreneur, because you’ll still need to build a full business plan first to determine what can come out. If you simply create an abbreviated business plan without putting together the full business plan first, you’ll end up with a small business plan that doesn’t truly describe your business as it should or is missing a key industry statistic that could get you over the top with your investors.
It’s always best to work with a professional when you can, particularly if you are creating a business plan specifically for investors. Not only can you get a secondary outlook on your business, but you’ll get all of the necessary data to really sell it!