Writing a business plan to be used as a practical roadmap for the company’s development and writing a business plan that will compel investors to commit capital are two processes with essential differences. Too many entrepreneurs make the mistake of including too much, while entirely overlooking the information a potential investor really needs.

Investors sift through innumerable business plans. The ones that generate their interest are able to clearly and concisely demonstrate the following elements:

• The company has high growth prospects as validated by thorough research into the fundamental business idea.
• The company is offering a product or service with a unique selling point that provides a sustainable competitive advantage.
• The management team has the relevant experience and the ambition and commitment to grow the business rapidly.
• The objectives, strategies and execution plan for the business have been clearly thought through.

Unless your business plan leaves no doubt that all the above criteria are in place, then you are not ready to approach investors. Remember also that, in this context, the real purpose of a business plan is to get to the next stage of the process, which is due diligence where all the fine details of the business will be analyzed. The plan should therefore be a concise document and the executive summary is of paramount importance.

A business plan’s primary objective when raising capital is to demonstrate to investors that you are offering an opportunity to invest in a business that will allow them to generate excellent returns. If this message isn’t conveyed, it’s time to revise your plan.