Apr 13, 2016

How To Write A Winning Business Proposal To Attract Investors

  • Apr 13, 2016
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  • Do you want a business proposal that provides the needed result or you want a sample format on how to write a winning business proposal? Then, you need to take a few minutes to read through this.
    One thing you must know before we go ahead on this is that, you don’t just jump into writing or presenting proposal without taking some crucial steps. You need to have a well conducted feasibility study which in turn must have helped you in crafting a very good business plan. This should not be a difficult thing for you since you already have the full idea of what you are planning to venture into.

    It usually starts with a great business idea but after taking all necessary steps at the initial stage, you are faced with capital issue and now the issue of funding comes in. At a point like this, turning to a third party such as investors is one of the best means of equity financing.
    Bringing in a third party like investors saves you from huge debts as well as risk reduction since you will share any risk on the business with the investor. Now you have a great idea, you have done the feasibility study and you have prepared the business plan but have a little fund to start with. Let’s take a look at the stages involved in getting it financed through a business proposal as explained below.

    What is a Business Proposal?
    So what is a business proposal? Simply put, a proposal is what is referred to as an intended course of action yet to be executed. It is a written offer to a prospective buyer from a seller.
    When we talk about important documents in business or corporate world, business proposal is surely one. Most big projects, partnerships, contracts, joint ventures, business financing, fund raising, mergers and acquisitions and many more usually begin with a business proposal.
    To break it down a bit, business proposal should be written in such a way to persuade your prospective client. It should be able to answer their questions as to the reason why you stand out as the best hands for the job. Your business proposal should point out what your client(s) or investor(s) really stand to gain by investing in the business. Hence, the most important thing in writing a compelling business proposal is, knowing the expectations of your clients.
    So can I write a business proposal by myself or do I need to hire a professional to do that for me? Well, as for me, it all depends on how you want it done and also depends on your background and profession. An accountant for instance may not need to hire any expert to prepare a business proposal since all the necessary cash flow analysis isn’t a difficult thing for him or her to do.
    That aside, anyone who could sit and give birth to a new business through his or her ideas should be able to write a good business proposal and that is exactly what I am going to dissect in a few seconds.

    How to Write a Business Proposal for Investors
    When you are writing your business proposal, ensure it includes a brief overview of the company, the fund required, a well detailed breakdown of how the fund will be utilized, a comprehensive account of the required equipment, products and services, technology, target market, production capabilities, management, employees, sales strategies, competition, company goals and financial projections or budget for 3-4 years of operation.
    Be informed that a business proposal is prepared in accordance with the type of business in view but for equity financing, you should have a proposal that will include the components listed below:

    The Components of a Business Proposal

    A summary
    Your summary should not be between 2-5 pages and you should ensure it includes your contact details like; name, address, telephone number and mailing address. Your main purpose for requesting and the amount required. How you intend to use the fund should be briefly describe, brief description of your company including the products or services rendered by the company. You should also include the required equipment and facilities needed.
    Don’t forget to include a brief description of the intended sales strategies, the goals of the company, target market, completion, management team you will use in achieving the goals including their expertise and background.
    The reason why your summary will carry all what are stated above is just to give a reader a quick overview of the proposal.

    Company Overview
    This section of the proposal will show the legal structure of the company, the formal name of the company, the ownership details, the products and services to be offered by the company. Your role in the business should be described and the role of others who might also be involved.
    Lest I forget, ensure details of your own investment in the business are clearly stated.

    • Products & Services
    Details about the services your company intend to render or the products to be manufactured should be given. The cost of inventories to be purchased, estimated cost of production, selling prices and sales forecast for the next 3 or 4 years should all be clearly stated under this section.
    • Use of Proceeds
    Under this section, you should clearly describe how the fund received would be utilized. It is very important you give full details of every expense. Cash flow projections should also be computed under this section to show the investors how they will get back their fund which they are about to inject into the business.
    • Marketing
    Marketing plan, sales plan and advertising channels will come under this section. Under this section of the proposal, ensure you provide marketing research and analysis data that will be strong enough to back work in line with your sales projections. You must equally be practical, reasonable and honest with your forecast. Don’t ever make a mistake of blowing figures out of realistic proportions.
    • Management
    This section should discuss the company’s management, employment histories of employees, individual responsibilities, employees’ qualifications, skills and experience. Clearly describe how each member of the employee will contribute to the achievement of company’s set goals. If there is going to be any additions in the management team in the future, ensure it is stated under this section. In addition to this, details of compensation and salaries intended to be paid within the next 3 – 4 years are included in your business proposal under this section.
    • Employees
    Under this section, you will have to do a breakdown of the number of employees intended to be used and salaries on per head basis. Note: the total of all break down on salaries and remuneration must be equal to what you have presented under salaries in Management section.

    Other components that are of great importance to a successful business plan are listed below:
    • Facility and Equipment
    • Technology
    • Business Financials

    In conclusion, be smart enough to keep your business proposal simple and free of grammatical errors and never forget to make it presentable too.
    I wish you all the best.
    If you have gained one thing or the other by reading this article, don’t hesitate to like it, post your comment and share with friends too.

    Thanks.

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