Apr 13, 2016
How To Write A Winning Business Proposal To Attract Investors
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.