Business Plans That Get Investment

Includes the Ultimate and Proven Template for Success

David Bateman

• Publisher: Legend Business
• Year: 2016
• Print ISBN: 9781785079320
• eBook ISBN: 9781785079337
• Topic: Business
• Subtopic: Business Writing
• Index: Business

Your business plan: turn ten minutes of attention into investment.

'David's book is an invaluable resource for any entrepreneur seeking to raise funding. Based on years of experience, David shows how to keep things short and clear!' -- Thomas Hellmann, Professor of Entrepreneurship and Innovation, Saïd Business School, University of Oxford

'Anyone interested in this subject should read this book, ' -- Tim Hames, Director General of BVCA (British Venture Capital Association)

The Business Plan is an essential tool for attracting an investor's attention. They receive hundreds of plans every week and spend no more than ten minutes on each one before deciding if it is of further interest. This means that the plan needs to be a short, snappy document that conveys the facts about your business quickly and clearly.

David Bateman's template has developed through years of successful deals and in just 15 slides, with just a few sentences on each, it provides everything an investor needs to know. No more long business plans full of text – this is a 'one-size-fits-all' solution avoids confusion and keeps it simple but successful.

Business Plans That Get Investment is a clear and comprehensive guide to writing a plan that turns those ten minutes of investor attention into major investment deals.

PART 1

LAYING THE FOUNDATIONS

CHAPTER 1. INTRODUCTION

Ask any entrepreneur why they need a business plan, and they will say: to attract new investment to my business, so that it can grow.

But business plans are often a cause of great stress and concern for those who write them. Justifiably so: get it right and you can secure your investment and grow your business; get it wrong and you may blow your chances of success.

So what is a business plan?

Your business plan is the medium that you use to communicate to potential investors what your business does and how they will be able to make money from it. You should think of it as an ‘investment pitch’. It should give potential investors a clear understanding of how they can benefit from the future growth of your business. A business plan is all about putting yourself in an investor’s shoes, and focussing on their agenda, rather than your own.

Investors’ needs

What makes writing a business plan so difficult is that no standard formula exists, which leaves you second-guessing what a potential investor wants to see. This book shows you how to put a plan together that has precisely the information an investor needs. This will enable them to take that essential first step towards an informed investment decision.

Dragons’ Den is a popular TV series in which aspiring entrepreneurs present their business ideas to a panel of successful, multi-millionaire investors. If the panellists like the idea, they invest in the business. Most of the people who present to the Dragons seem to fail. Even if they have a credible idea, it is often clear that the business itself has not been properly thought through. Those who do succeed are invariably well prepared, giving clear and concise answers to the probing questions of the Dragons. Crucially, their questions are often the same for each new presentation:

‘What’s your background?’

‘How does this product work?’

‘How much does it cost to produce?’

‘How many have you sold?’

‘How much money have you put into it?’

‘Do you own the intellectual property?’

‘How much investment do you need?’

‘How will you spend my investment?’

… and so on.

Clearly, Dragons’ Den is produced largely for entertainment purposes, but it is striking how relevant the business questions it throws up are to the business plan that you will need in order to successfully pitch for investment. If you want to know what an investor needs, and therefore what you must say in your own business plan, you could do worse than simply watching a few episodes. The questions that you hear on the show are likely to be the same as those that your business plan must address – and your aim must be to answer them before they are asked.

The fundamental point is this: if you don’t know what you should be saying in the first place, or what investors want to hear, it’s effectively impossible to get it down on paper. I learned this indispensable lesson the hard way. But it doesn’t have to be that way for you.

Keep it simple

Contrary to popular opinion, a business plan should always be concise and simple. It does not require excessive detail or reams of numbers. Likewise, the process of creating a plan need not be difficult or complicated.

In this book I will show you how to write an effective, professional business plan of no more than fourteen pages, with as few as ten sentences per page! By working to the structure revealed in this book your plan will take no more than a few days to write, at the very most.

When writing business plans, many people feel compelled to overburden them with words and information, believing that will make them seem weightier and more impressive. This is absolutely the wrong approach. In fact, the opposite is true: the fewer words the better. This is an area in which less is definitely more. You need to think of writing your plan as something similar to writing a song: you don’t have endless space to fill, because of the constraints on the length and structure of the song. You are forced to express yourself in a compressed space, often using very few words. An ideal business plan will follow the same principles, stating only what is absolutely necessary.

One size fits all

The business plan structure that is outlined in this book applies to almost any kind of business, irrespective of its size, what it does or how much money it makes. It is a universal, ‘one-size-fits-all’ methodology.

Your business might be anything from a raw, entrepreneurial start-up to a well-established, multi-million-pound firm that employs hundreds of people. In either case, the challenge is the same: you will need to raise investment money, typically with the aim of growing your business and taking it to the next level. The only real variation is in the size of the investment you need, and who you would approach for the money.

The same principles apply to a business plan whatever the type and size of the business it is for. Specific content and other details will of course vary from one type of business to another, but the fundamental structure and objectives will be remarkably consistent across all businesses.

I recently saw a business plan for a manufacturer of a hair-removal laser. The company was looking to raise a seven-figure investment. It struck me how similar the layout and key points of this plan were to one I had co-written many years earlier, for an asset-management business that was aiming to raise more than a billion dollars. You might think that such a business could hardly be more different from a laser hair-removal company, and that there is a big difference between a million pounds and a billion dollars. Yet the plans were uncannily similar, with the titles of each page and the overall structure being broadly consistent.

Based on experience

The approach in this book is borne out of many years’ direct experience. I have actually written plans and secured investment on numerous occasions.

Moreover, I have seen it from both sides of the fence: I have been both entrepreneur and investor. The amounts involved ranged from just tens of thousands of pounds for my first business, through to hundreds of millions of dollars of investors’ capital, later in my career. By this stage I had become an investor myself, and received hundreds of plans every year asking for financial backing. During that time I was able to observe at first-hand what worked and what didn’t. Experience taught me what caught an investor’s eye and what got sent to the bottom of the pile.

My first attempt at writing a business plan was, quite naturally, a disaster. The business I had started was a software company, and was being carried along by the frenzy of the dotcom boom of the late nineties. I knew what I wanted to do and where I wanted to take my business. ‘So put it down in a business plan and go and raise some money’ was my mentor’s sound but succinct advice. Not as easy as it might sound. I agonised over the process of writing the business plan for many weeks. I read books and got ‘expert’ advice, but there was still no light at the end of the tunnel. It all just seemed so complicated.

This was a fairly brutal learning process for someone who fancied he could take this kind of task in his stride. After all, I had read languages at Cambridge, was comfortable when it came to putting pen to paper, and had later attended the Management Studies course at the University’s business school. (Incidentally, the Management Studies syllabus at that time had nothing to say about writing business plans!)

In the end, I muddled through and managed to raise early-stage investment – no thanks to the shoddy and disjointed document that I referred to as my ‘business plan’. My plan lacked structure, was far too verbose, failed to address the key points that an investor needs to understand, and was simply not clear about what I was trying to achieve. I cringe now when I realise how hard I made things for myself and how much easier and more efficient the whole process could have been had someone shown me the right approach.

Years later, I was working in the financial sector, starting out on London’s City trading floors. After selling the software business I vowed that I would never again start a business without ready access to the elusive capital needed to create a successful venture. My logic was that if I wanted access to money, I would go and work with people who control the money – and that meant the world of finance.

Inevitably, as with so many careful life-plans, things went a little off-course and took longer than expected. At that time the financial sector was a great place not only for learning about business at the sharp end, but also for making good money. After several years in the manic environment of trading floors, I joined a team that was starting a hedge fund: a type of business that was then very much in vogue, in which spectacular fortunes were being made – and lost.

The business was launched with the backing of a large European investment bank. I was a partner in it and one of my responsibilities included putting together all of the marketing material that we would present to potential investors – and crucially this included the business plan (known in the industry, somewhat fancifully, as the ‘marketing presentation’).

Over several weeks the plan went through many stages until the finished version was ready. As a team, our experience in finance meant that we had seen enough plans by then to know what was likely to excite an investor’s interest. The plan was clear and concise, and covered all the areas that an investor would need to understand about our business. We used this plan in the early days to present to investors and showcase our fund, with the aim that they would decide to invest money with us.

Over the course of the following four years we raised nearly four billion dollars of investment for the fund, taking us into the top ten European hedge funds at one point. Not a bad result! The business plan stood the test of time: although its details have changed here and there over the years, its fundamental structure and message remain intact from the original document that was drafted.

Just to be clear, I am not for a moment suggesting that securing such an enormous investment was solely the result of a well-constructed business plan; a business opportunity must itself be sound, with good potential for growth. But there’s no doubt that the plan helped us to deliver our message clearly and concisely, and gave a crisp, professional first impression – and that undoubtedly accelerated the process of raising funds.

Later in the life of this business the tables turned and we ourselves became the investor. I was charged with looking at investment opportunities beyond the everyday scope of stocks and bonds. This meant that a whole range of enterprises presented deals to us – from start-up businesses looking for that first crucial injection of cash, all the way up to large multi-billion-dollar, publicly listed corporations.

One thing I learned was that the starting point of any sensible and serious dialogue was, without fail, always the same: ‘Send us the details in writing’ – and that meant their business plan. During the years that I spent in this role I saw many hundreds of business plans – most of which ended up in the bin. Many plans comprised pages and pages of irrelevant detail and, more often than not, I would only skim-read them in a desperate attempt to find the important points. Most failed to raise the money they needed, but some won their investment and were spectacularly successful.

One example of such a success was a blueberry farm in Uruguay. In this case, the management team predicted an imminent jump in global food prices, and wanted to expand into more general agriculture in the country. They raised more than eighty million dollars in just three months. Their success was based on the same foundation established by all of the businesses I saw that raised investment: this included a business plan with a consistent structure and presentation. The similarities shared by the successful plans suggested that this wasn’t a matter of chance. I learned a great deal from observing how effective their fixed format was and experience taught me that all businesses – whatever their size, whatever sector they occupied – could use business plans that follow a consistent, generic structure.

Today I have come full circle – once again I’m starting a new venture. It needed an initial investment of several hundred thousand pounds. I wrote the plan in a few days, and had the terms of business agreed with an investor just a few weeks later. If you get your business plan right and know who to send it to, things can happen incredibly quickly.

My experience of working with hundreds of business plans – both as an entrepreneur desperately looking for cash, and then later as a financier – has equipped me to outline the most effe...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Sponsor Information
• Foreword
• Part 1 – Laying the Foundations
• Part 2 – Writing the Plan
• Part 3 – Next Steps