How do investors read a business plan, and what do they look for?
Don’t expect every person you will send your business plan to read it thoroughly. In fact, you really can only count on them to skim it. Investors know what they’re looking for in a plan – they want to see a business that will grow rapidly and someday return a handsome profit. Venture capital firms, for example, expect to receive an average of five times their original investment within 5 to 7 years. Keep in mind that investors rarely put money into a “product” — they invest in a business. Many great products have floundered because the inventors did not understand how to get people to buy them. So be sure to show that you understand how to market your product or service. Your executive summary will likely be the first thing read. Make it stand out by highlighting the unique nature of your product or service, the strength of your management team, and why your business will make money. If the executive summary grabs their interest, many potential investors will move to the rest of the
