What Investors Like to See in Your Business Plans

Brooke Chaplan

April 04, 2016

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You may have the next big idea, but finding the money you need to make your business idea a reality can be a tough endeavor. Investors are very prickly when it comes to their money, so understanding how they look at your business is the key to gaining their confidence. Let's take a closer look and see just what investors want to see when it comes to your business plan.

Scalability
Investors really like businesses that can scale easily. That means being able to output sales without necessarily needing to proportionally jack up fixed costs. Generally speaking, products are much more scalable than services, but with today's internet age, it is very possible for both to be scalable. You want to focus on a business model that can multiply scales without having to rent out new equipment or hiring a ton of new employees.

Exit Strategy
It's good to be confident in your plan, but understand that investors are skeptical and generally very realistic when it comes to business viability. If for whatever reason the business does fail, they'll want to know that they'll be able to get out without a gigantic loss on their plate. Investors like safety.

A Story
Don't just focus on raw numbers and data. Tell a story that shows how your product is going to fulfill a huge need in the market and how there are already people out there who could be benefiting from the business right now. People love a compelling story. A good narrative will show investors how your business is going to fulfill needs and obtain customer loyalty and ultimately make money back on the investment.

Uniqueness
Businesses need to have an edge in whatever market they're in. Investors know this. Show them that you have a ton of market potential that will make investing in your business a worthwhile endeavor. Back it up with concrete proof. Things that investors will look for include things such as exclusivity in marketing and distribution, intellectual property rights, and licensing.

Milestones
Investors will want to see that you have your business planned out for years to come. Show them that there are milestones you're going to make that will give them some comfort in knowing that they'll be able to closely and easily track how your business is doing on a quarter to quarter or year to year basis.

If you can, don’t be afraid to spread out your incoming money. You can get a Credit Union IRA to boost your savings and lower taxes and get money from other sources like loans to get started so you don’t have to ask as much of your investors.

Overall, there are a variety of different ways you can bring investors aboard. Just remember to keep things realistic and understand that they don't want to give their money to just anyone. Show them why your plan is a solid and smart investment for their money.