Tip For Writing Winning Investment Business Plans

In my experience many UK business plans are written solely as investment business plans to raise funding. I wish more business owners would make planning part of their everyday operations. But as they don’t, I thought it might be helpful to pull together some key tips for writing winning investment business plans.

There are a few potential pitfalls that a business owner and business plan writer needs to be aware of when seeking loan or investment funding. I have listed my top tips to help you and your advisors prepare for and write a winning investment business plan.

Before I go further, it is worth reiterating that your business plan should tell a story about who you are, what you do, how you go about doing it and where you want it all to end up, or at least where you are headed over the next three to five years.

If your story is for the eyes of potential investors, you need to establish credibility and you need to do this without boring them to tears, i.e. in as short a space as possible. If you are not good at writing clearly and concisely about yourself and your business, it is worth employing a business plan writer to assist you.

At the end of the day what the investor will be seeking to find out is whether your company is worth investing in, which means they need to know how much risk is involved in making the proposed investment.

Here are some tips and things to think about when writing your investment business plans

Sell yourself and your business

Remember the investor does not believe in you and your business, like you do, so you are selling yourself and your business. It goes without saying that you need to be honest, but also show yourself and your business in a good light. Be as concise as you can. You should aim to make your plan less than around 30 pages, excluding appendices (that is not 30 pages of minuscule type! 12 pts is a good typeface size).

Set the scene

Even start up businesses have history, so if you are a start-up say why you are starting this particular business and what you and your team’s experience is, that equips you to set up and run the business. A word of warning for start-ups you will need to be able to demonstrate ‘proof of concept’. If you cannot do this you are unlikely to get funding. If you are already established, talk about your track record and how you got to where you are today.

Get a good team together and say why they are good

For an investment business plan, in particular (less so for a business plans for a bank loan or overdraft), you need to demonstrate that you have assembled a good team, covering all the main skills you need in your business, including a financial advisor and a legal advisor. Describe the knowledge, skills and experience that each brings to the business and what their role is.

Make sure there are no unresolved issues in your business or your plan

Investors won’t want any unresolved issues left in the plan, so if there things that need resolving, like a patent that is due to run out, that is very important to the business, or a key person that is coming up for retirement, deal with them before seeking investment.

Include an executive summary

The investor wants to get a feel quickly for what the business is about and your earning potential, so ensure that you include an executive summary, to enable the reader to gauge the risks and potential rewards as soon as they start reading your plan.

The following headings are a guide to the main areas of content for investment business plans (if you use business planning software all these sections will be covered by the software):

Executive Summary
General Background
Business Environment
Business Background
InvestmentFinancial Plan

Include a well thought through finance plan

The finance plan needs to look forward for at least three years and include a balance sheet forecast, a profit and loss forecast and a cash flow forecast. Good business planning software such as Business Plan Pro is invaluable in helping you get the financial sheets together. Don’t be tempted to be over optimistic in your forecasts. Put some time into your figures to make sure your forecasts are as accurate as you can reasonably make them.

Present your winning investment business plan nicely

Presentation is important, so bind your plan, include an index and write in plain English without using jargon. The people who read investment business plans will not have knowledge about every business sector, so they may not have as much knowledge about your business sector as you do. Treat them as an educated layperson in terms of what they may know about your business sector. If your plan has been around for a while, update it before giving it to a new potential investor.

Why You Need A Real Estate Investment Business Plan

A real estate investment business plan is an absolute necessity for those who want to seriously make property investment their business. If you want to tinker with investing in real estate without a business plan, then that’s great – good for you – but if you are ready to get serious, then learn how to get a business plan together. A written strategy in this form has a number of great benefits for investors and their business.

What A Real Estate Investment Business Plan Can Do For You

Most importantly, a real estate investment business plan gives you and your enterprise direction. To move forward you need a vision of where you are going and how you are going to get there. In a practical sense this means that you must be able to detail what sort of properties you are going to purchase at what prices in what areas for what purposes. Will you buy and hold, or flip the properties – or perhaps you will be pursuing a mixture of both strategies. Whatever your strategy – you need to be clear on what it is and outline it in your strategy.

Your property investment business plan should outline your details and experience, as well as that of your team. Yes – your team. You need one – comprising of competent and insightful practitioners who are very knowledgeable in their areas of speciality. So you’ll need a lawyer, realtor, building inspector and tax accountant for a start. You simply cannot run a real estate investment business all by yourself – you will need professionals working with you to ensure your profitability.

All real estate investment businesses require access to finance in order to continue operating. Some will require access to more funds than others, but at some stage you will be sitting down with a prospective lender who may be undecided about lending you the money you need to close your next deal. Let me tell you now that if you are able to hand over a real estate investment business plan that you have drawn up, you are so much more likely to land those funds. The prospective lender may not even read past the executive summary – but if those pages are well researched and written, they will know the rest of the document is just as good.

Take the time to draft a property investment business plan for your business and you will be forever grateful that you did. Remember that a little work now to set out a clear vision and path for your business is the key to your future success. This small investment of your time to develop a properly researched and laid out document can quite possibly mean the difference between success and failure for your real estate enterprise.

A Quick Guide on How to Create a Real Estate Investment Business Plan

When creating a project or finishing a task at work, are you the type who makes an outline or a checklist of tasks to do or are you the type who wings it? The latter may not be a very good idea especially if you are starting out a business. Let’s take property investing as an example. Over the years, more and more people are starting to consider this as a profitable venture in addition to their day jobs. If you want to be in this business, it’s important to have a real estate investment business plan so you can achieve your goals in no time at all.

Why It Pays to Map Out an REI Business Plan

Why is it important to create a business plan when getting involved in property investing? With a solid plan, you increase your chances of success. If you wish to earn profit with as little ground work as possible, for instance, you may join a property investment group that manages an apartment complex or condominium units. You can invest in several units but the investment group does the maintenance tasks for you in exchange for a percentage of the profit. With a solid business plan, you can weigh the advantages and disadvantages of each real estate investment instrument available and decide whether you can profit from them or not.

Step 1: Establishing Your Financial Goals

So what’s the first step you can follow when creating a real estate investment business plan? First, establish your financial goals. Are you looking forward to using the profits from your REI instrument as retirement money or do you need an extra source of income? Set a schedule for achieving these financial goals whether they’re five or ten years into the future. Better yet, determine your desired net worth. The more specific you are, the better; you can work on achieving those financial goals effectively.

Step 2: Choosing the REI Program to Go for

There are several REI programs that you can go for. First, there’s the basic rental property investment. Here, you purchase a property and rent it out for profit. It’s entirely up to you to decide whether you want to act as landlord or hire someone else to do it for you. As mentioned earlier, you can join a real estate investment group. You may also dabble in real estate trading. Think of it as the equivalent of day trading in the stock market. You’re basically holding on to a property for a few months, after which you sell them again for profit. This technique is also called flipping properties. Finally, you can invest in REITS or Real Estate Investment Trusts, which are similar to dividend-paying stocks. Unlike other types of real estate investment programs, REITs allow you to invest in commercial properties such as malls or office buildings for a better profit yield.

Step 3: Planning How to Achieve Your Financial Goals

After deciding which REI program to go for, plan how to achieve your financial goals. This is where a lot of research is needed because you have to calculate down payment amounts, monthly mortgages, operating expenses, and so on. Once your business plan is finished, you now have a clear series of steps to follow when it comes to growing your real estate venture.