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Q.How do investors read a business plan, and what do they look for?

A.Not every person who receives your business plan will read it. In fact, most will only skim a business plan. Savvy Investors know what they are looking for in a business plan-- they want to see a business that will grow profitable rapidly, and management that not only is capable of running the business, but also understands the intended market and intended customer for the products or services to be sold. Investors rarely put their money into a "product"; they invest in a business and the people who intend to run it.

The first thing a savvy investor will read in your business plan is your executive summary. The purpose of the executive summary is to highlight the 6 main components of your business plan in a clear and concise manner. It should highlight the unique nature of your intended product or service, the strength of your management team, and why your business will make money. If the executive summary grabs the reader's interest, s/he will continue reading the rest of the business plan (but probably not in order). Some investors will go on to the description of the management team, while others may go on to the financial section to see when and how you plan to attain long-term profitability.

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Copyright 1999-2019 Melissa C. Marsh. All Rights Reserved. All Information on this website is subject to a Disclaimer and Use Agreement. This information is provided as general information only and should not be construed as legal advice. We advise you to seek the advice of competent legal counsel to address your own specific questions, facts and circumstances.