After developing business plans for the last 25 years and having been in the funding/finance industry for close to 10 years, I have learned a few things along the way. Here are 5 top tips to keep in mind when developing a business plan for investors, VC or banks.

Tip One:  Good Research Builds a Solid Foundation

Research is the key to a good business plan. It gives the plan a viable foundation to work from. The research should encompass the markets, the industry, customers, business intelligence, trends, etc. Research provides a company with the important opportunities and obstacles. It is the reality check. A good business model can be built from research. Research paves the way for a realistic and believable business plan; a plan which you can easily sell the funding audience.

Tip Two:  Believable Assumptions Makes a Successful Funding Plan

Whether you are targeting private equity or bank finance, the assumptions you make and reveal are what make the funders reviewing the plan believe you have a realistic plan they can get behind. So, it is very important your assumptions come from good research and business experience. It is also important to list all the assumptions you made in the business plan so that the funder can quickly understand how you came to key conclusions, made certain assertions, and developed the financial projections.

Tip Three: Keep the BS to a Minimum

I see far too many plans that are the next Google or Facebook or Amazon. Come on folks. While a funding business plan is partly a sales document, it must be founded in reality with substantial research and track record to back up assertions made. So don’t just pick some ludicrously aggressive business model that has been done before and just say you can do it too. It won’t work. It is great to research other business models and what other companies have done, but customize your own model and support that model with realistic assumptions and financials.

Tip Four: Have an Experienced Management Team

I just did a blog post on this subject because it is so important and crucial to a successful venture. Hear this clearly:

• The best business plan in the world can NOT make up for a lacking or deficient management team.
• Funders fund people, not products, services, or ideas. It is the people involved in a venture which brings funding confidence.

Find the right people to build a management team that has proven experience within your intended industry. Management experience is a real key to getting the right funding for a business.

Tip Five: Have a Successful Track Record

Track record of success, particularly if past success is in the same or similar industry, will bring funding success more so than most any other funding factor. If you do not have a track record of business success, find those who do, get them to support your plan, and bring them into to your team, whether it be as key management positions or board members/advisors.

Bonus Tip: Consider Hiring a Professional Consultant

A business plan consultant who is experienced in developing funding business plans are worth their weight in gold. Why? Because this specialized consultant simply knows what should go in a funding business plan to make the best case for your venture, giving the best chance of success in not just securing funding but getting the right kind, amount and mix of funding.

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