You don’t need a business plan to start a business, but you do need one to raise investment.
Many businesses begin with just an idea, some determination, and limited resources. In fact, research from Harvard Business Review found that over 70% of successful entrepreneurs did not start with a formal business plan. Instead, they focused on developing their core idea, building a committed team, and proving their concept in the real world.
Why Start-ups Often Skip the Business Plan
For early-stage founders, planning can seem restrictive. At the beginning, it’s more important to:
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- Articulate your core business idea
- Surround yourself with people who believe in it
- Start small and gain traction
- Focus on a niche and excel at it
- Understand how you will generate revenue
Business planning, in this early phase, is mostly about doing, testing, refining, and adapting your idea to what works. A formal business plan at this stage can feel premature or even limiting.
When a Business Plan for Investors Becomes Essential
However, there comes a point where informal planning is no longer enough, especially when:
- Your operations grow and need structure
- You want to scale and require external funding
This is where a formal business plan becomes crucial. Investors, banks, and lenders need to see a clear, coherent plan that explains your business model, market opportunity, growth strategy, and financial forecasts. Without it, your chances of securing funding drop significantly.
Business Planning for Investment
If your business is now at the point where you’re seeking to raise capital to expand or stabilise growth, a detailed business plan is non-negotiable. At this stage, you should already:
- Understand your core proposition and market fit
- Have a leadership team or key personnel in place
- Know how technology or investment could enhance your operations
- Be clear on the scale and direction of your growth
Your business plan will become the roadmap that shows potential investors:
- Who you are
- What you do
- Where you’re going
- And exactly how their money will help you get there
How to Write a Business Plan for Investors
Creating a compelling business plan is essential for attracting investors, guiding your growth, and showcasing the strength of your business. A well-structured plan demonstrates your understanding of the market, your strategy for success, and the financial potential of your venture.
Here is a detailed breakdown of the key sections your business plan should include:
1. Executive Summary
This one-page overview summarises your entire business plan. It should be written last but placed first. Highlight your mission, key financial figures, market opportunity, and how investment will drive growth. Make it compelling, many investors read only this section.
2. Business Overview
This section outlines the essence of your business and its current position in the market:
- Company history
- Business purpose
- Core products or services
- Market sector
- Business model
- Financial snapshot
3. Social and Environmental Impact
Whether or not you have a formal ESG (Environmental, Social, and Governance) strategy, it’s important to show how your business affects key stakeholders:
- Impact on employees, customers, and suppliers
- Community contributions
- Environmental footprint
- How your impact compares to competitors
4. Market Position
Define your place in the market and demonstrate your awareness of trends and challenges:
- Target audience
- Market size and value
- Emerging trends and projections
- Competitor analysis
- Market share
- Opportunities for partnership or collaboration
5. Growth Strategy
Investors want to see a clear and realistic growth plan:
- Short, medium and long-term goals
- Growth timelines and milestones
- Resource and investment needs to support growth
- KPIs and metrics for measuring success
6. Marketing & Sales Strategy
This section explains how you’ll attract and convert customers:
- Go-to-market strategy
- Customer acquisition channels (digital, partnerships, PR, etc.)
- Sales funnel and conversion strategies
- Marketing budget and ROI expectations
- Retention, referral, and upsell strategies
7. Understanding Your Customer
Show that you know who your customers are and what they need:
- Customer demographics and behaviours
- Buying motivations
- Customer segmentation
- Revenue implications of different contract sizes
- Customer acquisition and retention strategy
8. Management Team
Investors invest in people as much as ideas. Present your team structure and expertise:
- Organisational chart
- Key management roles and responsibilities
- Background and experience of core team members
- Ownership structure
- Succession planning if applicable
9. Business Operations
Describe how your business operates day-to-day:
- Physical locations and assets
- Legal structure and compliance
- Insurance cover
- Technology infrastructure
- Key operational processes
10. Financial Report
This section provides critical financial information:
- Past financial performance
- Profit and loss statement
- Balance sheet
- Cash flow statement
- Financial risks and assumptions
- Revenue forecasts and break-even analysis
Be honest and data-driven. Avoid over-optimism, realism builds trust.
11. Financial Projections
Offer forward-looking insight into your financial potential:
- 3–5 year financial forecasts (P&L, cash flow, balance sheet)
- Key assumptions for underpinning these forecasts
- Break-even analysis
- Scenario planning (best case, base case, worst case)
- Use of graphs/charts for visual clarity
12. Raising Capital
If you’re seeking investment, be precise:
- Amount of capital required
- Planned use of funds
- Expected runway (how long funds will last)
- Projected impact on growth and profit
- Preferred investment structure (equity, debt, convertible notes, etc.)
- Role you envision for your investors
- Exit strategy options
13. Risk Analysis
Demonstrate your awareness of challenges and your plans to mitigate them:
- Market risks (competition, demand changes)
- Operational risks (staffing, supply chain, tech failure)
- Financial risks (cash flow, currency, credit)
- Regulatory or legal risks
- Mitigation strategies and contingency planning
14. Appendices
Include supporting materials (and avoid cluttering the main document but still providing transparency) to back up your plan:
- CVs of key personnel
- Product/service visuals or demos
- Market research data
- Legal documents (IP, licences, contracts)
- Detailed financial models
A great business plan is more than a document, it’s a roadmap. Make it clear, concise and compelling.
Need help writing your business plan? Contact us for expert advice and support tailored to your business goals.
Supercharging Your Business Plan for Investment
Once your business plan is ready, it’s time to think like an investor. Your plan isn’t just a document for securing funding, it’s a tool that shows you understand your business, your market, and your financial future.
A well-prepared business plan does three key things:
- Demonstrates clear thinking behind your business idea and growth strategy
- Builds trust by showing accountability through financial and operational planning
- Sets you apart by proving your business is investment-ready
Tips to Strengthen Your Business Plan and Attract Investors
Here’s how to make your business plan stand out:
- Focus on profitability: Investors want to back a business that can generate returns. Clearly show how and when your business will make money.
- Keep it simple and clear: Avoid jargon. Make sure each section is easy to understand and logically presented.
- Be precise about your sector and model: Define your market clearly and explain exactly how you generate revenue.
- Ask with confidence: If you need a £250,000 business loan, say so. Just be transparent about how every pound will be used to grow the business.
- Highlight your team’s strengths: Emphasise your own expertise and the value of your key staff. Be honest about what would happen if any of you left.
- Show scalability: Investors want growth potential. Explain how your business can expand and reach a larger market.
Ready to Raise Investment?
At Funding Guru, we help ambitious businesses like yours become investment-ready. Whether you need help refining your business plan, identifying funding options, or preparing your pitch, our team can guide you through every step of the process.
Let’s turn your growth goals into reality. Contact Funding Guru today to start your funding journey.
