Although you will definitely require a business plan to appeal to any investors, a plan alone will not be enough to get any investors interested. The choice for investment will rely upon other component, like:
- The record of performance of the business team
- What the commodity is that you’re trying to sell
- What competing edge do you have and what type of market is it?
In itself, such a plan is similar to car wheels–the car won’t be able to go anywhere without them. But the wheels alone aren’t enough to make the car move and you must recognise this from day one.
Investors are Not All of a Similar Type
Another crucial thing to understand is that not all investors will be the same. At the high end, there are a couple of thousand venture capitalists being hired by a few hundred venture capital firms. At the lower end, there are family and friends. And right in between are tens of thousands of private investors, who are referred to as “angels.” All of whom may be interested in the positive advantages of investing in a luxury resort – Your Personal Paradise: White Sands Hotel & Spa
Venture capitalists are the most demanding and fund only a few thousand plans a year, and have to lessen their risks because of investing in other people’s finances. They usually wouldn’t be looking at your venture, except if you may have already been introduced to them, because they have no other way of screening and processing any potential proposals they get. They’re not of a bad type, but they are experts carrying out a slightly risky business.
However, when they do look into an investment vehicle, they look out for:
- A management team with a superb record of performance is, in nearly all cases, of the essence. If this goes against you, you must deal with it and look into inviting angel investors or family and friends
- A commodity with a leading. It’s simpler to predict the success of a product than it is of a service, which is the reason why a service business is not really that interesting to a venture capitalist. (There are occasionally some exceptions)
Other things that are financially attractive include:
- An opportunity of increasing the value of the business from what they think it is currently worth, to around 100 times that in three to five years.
- A plan that has other related investors who are prepared to invest at the same time. Venture capitalists enjoy safety in numbers so that they aren’t the only dog in the race!
- A detailed, stated exit plan. All investors wish to know that you’ve projected into the future to how they’re going to get their money back on any deal.
And with the above information under your belt, hope that your plans work out just as you wish!