Do You Really Need a Business Plan to Raise Money? Find Out What a Poll of Funders and Investors Revealed…
May 23, 2012 Leave a comment
In a poll of over 140 people, we found that a good business plan is the #1 most important factor in deciding whether to fund a friend’s or relative’s business.
Business plans are critical for setting goals and mapping out your plan to achieve those goals. They are also critical in order to raise capital.
However, there are some funders and investors that say they don’t need a business plan. Rather, they just want to see a company slide presentation and/or a 1-3 page Executive Summary.
So, at this point you are probably asking yourself, “So, do I, or do I not, need a business plan?”
The answer is a resounding “YES.” Let me explain.
A key reason for creating a formal business plan is the knowledge that comes out of it. Specifically, the business plan process forces you to make a lot of key decisions about your business. For instance, writing down your marketing plan forces you to determine the marketing tactics you will employ.
Likewise, the business plan development process forces you to assess your market, identify customer segments and customer needs, and determine the strengths and weaknesses of your competitors. This is all critical information that you need to successfully operate your business.
The U.S. Small Business Administration, in a study called “The Small Business Economy,” found a direct correlation between a business’ success and its creation of a formal business plan. That’s because the business plan development process forces you to really think through the business and make informed decisions.
Likewise, the business plan development process gives you the information that you need to include in your investor slide presentation, executive summary, and your Raise (fundraising profile on 40Billion). For example, one section needs to include your financial projections and uses of funding. Another section must talk about your marketing plan. All of this information comes directly from your business plan.
In a poll of over 140 people, we found that a good business plan is the #1 most important factor in deciding whether to fund a friend’s or relative’s business. So, the best thing you can do as an entrepreneur to increase your chances of success and raise money for your business is to turn your idea into a business plan.
The second best thing you can do is upload your business plan or executive summary on 40Billion.com when you start a Raise, and let funders download your business plan document easily with just one click.
Don’t have a business plan yet? Need help writing your business plan? Use our informative business startup guide to discover quick and useful tips for writing a business plan. Download the short MP3 audio file and listen to it on your computer or in your iPod, while at home, in the office, or on-the-go.