When you’re thinking of starting a business, the first question that comes to mind is how you’ll fund the project. No small business can run off pure passion and excitement, and thus finding that money becomes one of your first tasks. If you’re uninterested in applying for small business loans, another option is to ask for money from investors, and when you do that you have to write an investment proposal.
Contrary to how it may sound, this task is not quite as easy as laying out the facts. Sometimes, persuading business people to invest in you is about that little extra. Rishi Anand, the Founder of Venture Giant says in an article, “I have seen seemingly weak value propositions receive 9 – 10 angel investor contacts on the day of dispatch only because the investment proposal had been well written and well thought out!” There are 4 key facts to consider here.
Right out of the gate, you want your investors asking for more. You want them addicted to your business and sure of their investment. Creating a well-written, compelling and enticing title will be integral to getting them to move on to the important stuff like your business model and potential ROI. Consider these points as you write your title.
- Keep it short and to the point – they should know what it is right away.
- Make it sound successful. Think: Car Dealership to Auto Retailer. Simple changes can make the difference.
Get Started Right Away
Your intro is the first information they get on your proposed business, and so you should provide the vital information immediately. Avoid the run on sentences and excessive language. Rather, you want to get right to the main points of finances and business terms. In here, you want to discuss:
- What is your business?
- How much do you need?
- How will it be used?
The Best Facts
You’ll want the main portion of your text to make you sound undeniable. While you may be just starting a business, at this point you should have an idea of the money you can make, the money your competitors are making, etc. These facts need to be enticing, as often this is the only aspect of your proposal the investors are interested in. However, there is one important metric here.
- Anticipated ROI: This should not only say how much your investors can get back, but what they will need to put in as well. You’ll also explain expected wait time for the initial investment to be made back and then profits from there. Give your greatest numbers, but be sure to remain realistic.
Your Unique Spot
Finally, before your final summary, you want to explain to the investors why you are unique in this industry. In such a competitive market, it’s likely your business is not original. In this section, you want to place yourself within the industry and make some compelling comparisons.
- How does your business model set you aside?
- How will you combat any current economic deterrents?
- What do you do that your competitor doesn’t?
- How will you grow with the industry you’re in?
As Anand says, it doesn’t take a spectacular proposal to win over investors, but one that is done so well that it’s compelling. By taking the basics of your proposal and making them work in your favor, you can persuade any investor to become a part of your dream business.
Guest Contributor Bio: Jessica Sanders is an avid small business writer. As the marketing copy-editor of Resource Nation, she touches on a range of topics such as business phone systems and small business checking.