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Top tips for creating an effective business plan for investors

Creating your business plan is an important and valuable exercise if you're planning to raise funding – and even if you are not. 

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The process of creating your business plan will raise useful questions and help you to both plan your strategy and structure your business effectively. Read on for our tips on how to write a winning plan.

The plan doesn't need to be a long document, most funders will only read the executive summary initially in order to decide whether they wish to find out more. In fact, you would generally only present the executive summary in the first stage of discussions.

Here is a suggested format for the plan:

A. Executive summary

This is a ‘mini version' of the plan itself, which sets out the key elements of the business and proposal. The headings in the executive summary will generally mirror those of the plan itself.

Executive summaries are often non-confidential, where as a full business plan may contain confidential information and would only be supplied once a non-disclosure agreement has been signed by the recipient.

B. Overview of the business

Describe the business, including its products or services, location, a little history, why it was started, the purpose of the business and its key objectives.

C. The need and market size

Scalability is a key factor for many investors. If the business cannot be increased in size on a profitable basis, many investors will be unlikely to take things further.

Ask yourself:

  • Do you intend to grow the business significantly or is it planned to be a ‘lifestyle' business?
  • What is the need for the product or service and how is this demonstrated?
  • What is the size of the target market in both unit and revenue terms? Include a forecast of market size for the next three years and split, if necessary, by region or country.

D. About your market

Detail how things have changed or are changing in the market you supply. What are the key drivers/economic/social/political factors which are relevant? How will things change going forward?

The product/services and operations

Provide a detailed description of your products or services and plans for future products. Many funders will be wary of a one product company.

Describe your operational plan, how the business will deliver to customers and your team's experience in doing so.

The competition

You need to include a reasonable assessment of the current and likely future competition. How do their products and services compare to yours? What is your competitive advantage and positioning in the market? How is the competition and their activity likely to affect your strategy now and going forward?

Marketing and sales

Describe your marketing, sales and distribution plans, including the experience of those involved and the likely challenges you will meet as you try to get your message out to potential customers.

Explain when, where and what you're going to do, timing and logistics.

Intellectual property overview

This is a key area (if relevant to your business) for most investors. Remember that intellectual property covers not only patents and trademarks but also know how and business processes.


Discuss the risks and threats your business faces or will face. How are you planning to deal with these? What is your plan B in each case?

E. Management team

Outline your management structure, managers' relevant experience to your business and their roles and responsibilities.

F. Financial forecasts

Headline figures in table form for at least three years showing:

  • Revenue
  • Gross profit
  • Net profit before tax
  • Maximum cash requirement.

The financial forecasts must be supported by a detailed financial model, which includes sensitivity analysis (i.e. ‘what if' scenarios – what if sales fall by 20%, or costs increase by 20%, etc).

Use of funds

Include a broad summary of main areas of expenditure.


Detail amounts already invested into the business (where from, type and how much), your funding requirements and the likely structure and type of funding.

G. Exit strategy

An investor will want to know where your business is going and what you plan to do in the future. If you plan to sell the business, also comment on a likely valuation.

About the author

Nick Montague is a business adviser, chartered accountant and founder of, an online source of information on the different types of business funding and business advice providers available to you. Members of the Forum are eligible for a 10% discount on's funding matchmaking service. Alternatively, if you're a funding adviser, you can receive a 10% discount on their funding adviser annual registration fee. Call 01565 626001 to find out more.

There are lots of othe rinteresting articles about business planning:

How to create a business plan

The Forum's mini guide on how to write a business plan 

Updated 7th June 2017