Investor Relations 101: The Business Plan

In this series of a blog post, I am discussing some of the key elements of an investor relations program.  I recently published a post about the importance of pitch decks and press releases as part of an investor relations program, in this post, I will discuss not only the importance of a business plan but how to layout the business plan to optimize your chances of attracting investment to your company or venture.

Understanding Your Audience

A key part of developing an award-winning business plan is to understand who your target audience is going to be…yes, there is a difference on how you will write your business plan depending on who is going to read it.  When you are trying to sell your idea, salesy language can be used.  When presenting to a major investment bank, a direct straight forward language with little to no fluff is recommended.  If you are presenting to investors that may not understand your industry, more defining terms should be used as opposed to presenting a business plan to industry insiders, where you can leave out explaining mundane facts that industry insiders already know.

Start Strong with your Executive Summary

An executive summary, the first part of a business plan after the cover page and table of contents, are the first words an investor will read.  An executive summary is very similar to a 1-page business plan and will outline everything else that is encompassed in the rest of the business plan.  Literally, there should be a paragraph for every section of the business plan.

Have a Strong Outline that Leaves Nothing Out

A business plan should encompass everything about your business, it’s prospects, financials, executives and more.  Here is a sample outline of what to include in your business plan:

  • Cover Page
  • Table of Contents
  • Executive Summary
  • Company Description
  • The S.W.O.T. Analysis
  • Market Research
  • Industry Analysis
  • Marketing Plan
  • Management & Organizational Plan
  • Financial Projections
  • Conclusion

Each of the sections mentioned above should be expanded.  For example, the financial projections may include a projected cash flow statement, projected balance sheet, business ratios and more.

Format the Business Plan

This is a commonly looked-over detail that makes a world of a difference.  The format of your business plan allows the reader to feel more comfortable when giving the business plan the first glimpse.  Some tips on formatting your business plan:

  • Square the pages so that each section ends on a single page
  • Use headings so that readers can clearly understand when a section ends or begins
  • Number the pages
  • Place logo and contact information on the cover page
  • Make sure to use readable fonts and font sizes that are appropriate
  • Make sure all the line spacing is formatted the same

Plan Your Business Plan Distribution

Once you have completed your business plan, a strong investor relations program has a system on how to distribute the business plan to the proper parties.  This can include directly emailing the business plan to potential investors, attending investor conferences, or directly mailing the business plan to prospects.

In Conclusion

Of course, a business plan is only part of a strong investor relations campaign.  You want to have the business plan be presented in conjunction with other marketing collateral like a website, pitch deck, press release, etc.  Make sure to proofread the business plan, nothing can turn off an investor faster than a typo.  And last but not least, if you feel like you can not develop a solid business plan internally, hire a professional.

If you need help developing a business plan or establishing an effective investor relations program, the team at Cervitude IR can help.  Contact us today.

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