How to Write an Investment Proposal The most compelling investment proposal is the document that succinctly and accurately informs a potential investor what is in it for him or her if he or she decides to bankroll the said project.
And to make sure that your investment proposal embodies these characteristics, we have created a list of the most important parts or pieces of information that should be included in your written investment proposal.
Find out what these are below… 1. Description of Proposed Investment Project All investment proposals should start with a brief description of the proposed investment project or idea. It is in this part of your proposal where you get to share with the world what your business idea is all about. Or, if you want more funds for an already launched business, you need to write about the things that you want to do in order to re-energize your business. Remember that this portion of your proposal is the first thing that potential investors will see and read so make sure that its first few paragraphs are written well.
While the specifics of your actual startup will differ, the elements you'd want to include in your restaurant's business plan are likely to be very similar. Use a sample as a guide Every startup and small business is unique, so you'll want to avoid copying a sample plan word for word. It just won't be as helpful, since each business is unique.
You want your plan to be a useful tool for starting a business —and getting funding if you need it. One of the key benefits of writing a business plan is simply going to through the process. Solution This is your product or service. How are you addressing the problem you have identified in the market? Target market Who is your target market , or your ideal customer? How many of them are there? Competition How is your target market solving their problem today? Are there alternatives or substitutes in the market?
Company overview and team Provide a brief overview of your team and a short explanation of why you and your team are the right people to take your idea to market. Investors put an enormous amount of weight on the team—even more than on the idea—because even a great idea needs great execution in order to become a reality. Financial summary Highlight the key aspects of your financial plan, ideally with a chart that shows your planned sales, expenses, and profitability.
If your business model i. Instead, just include a short statement indicating how much money you need to raise. If you can show that your potential customers are already interested in—or perhaps already buying—your product or service, this is great to highlight. In that case, you can dispense with details about the management team, funding requirements, and traction, and instead treat the executive summary as an overview of the strategic direction of the company, to ensure that all team members are on the same page.
Opportunity There are four main chapters in a business plan—opportunity, execution, company overview, and financial plan. People who read your business plan will already know a little bit about your business because they read your executive summary. The problem and solution Start the opportunity chapter by describing the problem that you are solving for your customers.
What is the primary pain point for them? How are they solving their problems today? Defining the problem you are solving for your customers is far and away the most critical element of your business plan and crucial for your business success.
To ensure that you are solving a real problem for your potential customers, a great step in the business planning process is to get away from your computer and actually go out and talk to potential customers. Validate that they have the problem you assume they have, and then take the next step and pitch your potential solution to their problem. Is it a good fit for them? Your solution is the product or service that you plan on offering to your customers.
What is it and how is it offered? How exactly does it solve the problem that your customers have? For some products and services, you might want to describe use cases or tell a story about a real user who will benefit from and be willing to pay for your solution.
Depending on the type of business you are starting and the type of plan you are writing, you may not need to go into too much detail here. No matter what, you need to know who your customer is and have a rough estimate of how many of them there are. What is an Investment Proposal? The Investment Proposal typically comprises two sections; a descriptive section and a set of financial information. When you need financial help or backing for a certain business endeavor, project or enterprise if you want to go for a big target, investors are your best chance.
However, attracting and winning them over to your side may take more than just a few meetings and introductions. You need a proposal that would get you the funds you need, from investors who can give them. Overview of the Company This section is particularly relevant if your business is already in operation.
What are your production costs per item? Is there potential to lower these costs and what are the consequences of doing so? What is the retail price of your product or service and how did you come to this price? Is it relative to comparable products?
Will you be advertising online? And you need to list all these planned action plans into your investment proposal. But, you don't need an exact match for it to be helpful. References Cardis, J. Actions include key hires, new financing, sales milestones, new product launches and strategic partnerships. You will still need to cover the logistics of how you will get your products to your customers from your warehouse, but a direct distribution model is usually fairly simple.
An online software company might look at churn rates the percentage of customers that cancel and new signups. When you recognize your assumptions, you can set out to prove that your assumptions are correct. Perhaps they need to target athletes or business people who need formal shoes for work, or perhaps they are targeting children and their families. The focus should be on bringing your first products and services to market.
When you sit down to write, you'll naturally think through important pieces, like your startup costs, your target market , and any market analysis or research you'll need to do to be successful. Each Investment Proposal should be unique to the business that is making the application for funding and the level of detail expected by prospective investors will differ depending upon the type of investment equity, debt or trade finance that you are seeking.
On the surface, none of these things look like real direct competition, but they were how people were to solving their transportation problems at that time. Facilities Where is your office located?
Marketing and sales plan The marketing and sales plan section of your business plan details how you plan to reach your target market segments also called target marketing , how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success. Knowing how to ask for what you want begins with knowing what you want and why.