In the past four years, we have been asked continuously by clients what makes a good business plan? The answer is, a full understanding of the specific market, its players, market opportunity, business model, financial obligations, monetization schedule and ability to convey all the above in a coherent way that the business owner, banks, investors and/or the Department of Homeland Security’s (DHS) Immigration and Customs Enforcement (ICE) can understand. The key to an effective business plan is that it can decrease the risk assumed by all interested parties. Many start-ups and existing corporations attempting to raise capital start by writing their own Business Plans, however in most cases they lack the most essential elements that banks and investors look for in providing capital.
Why do I need a good business plan?
There are various reasons why clients may require a good business plan. For some clients it’s a start-up and they need a good business plan to define their respective goals and determine their capital needs. For other established clients it’s a self-reflection point for restructuring. For other clients it’s strictly a capital-raising venture with a good business plan playing a central role in raising money. For others clients a good business plan is the pathway to becoming a legal resident within the United States by meeting the criteria for the EB-5 Investment Visa. Yet for other clients it’s a key component in obtaining a lease within a commercial retail space. The landlord may want to see your roadmap to success, to decrease the probability of failure. Thus, developing a good business plan that is customized to your needs and decreases the risk of the reader is empirical to your overall success.
How to differentiate business plans from each other?
Not all business plans are created equal, and each plan needs to focus on the specific goals it’s attempting to achieve. A good business plan that is designed to obtain an EB-5 Investment Visa has different goals than one that is trying to raise capital from a bank. The same holds true for business plans that focus on raising capital from private sources such as Angels, Venture Capital (VC) firms, or Private Equity (PE) firms. This is why HafeziCapital spends so much time trying to understand what the clients goals are and how they are trying to achieve them. Based on those goals we consult with our clients to develop a process that perfects the business plan and meets the financial requirements set by the banks, investors, or the government. In many cases we have obtained business plans that will never raise capital because of the content. We have managed to sit down with the client, explain to them the shortcoming of the existing plan and develop effective alternative strategy that increase the probability of capital-raising. A good business plan has a specific goal in mind, and we aim to understand the client’s goal and develop a process to meet their needs. Business plan’s that are too broad generally do not achieve their respective goal.
Faults of business plan software
Investors many times come to us with pre-made business plans from software packages or business plan web-farms. Although they are a good start in developing an effective business plan, they generally lack the key ingredients required to achieve the necessary goals. Banks, Investors, and the Department of Homeland Security’s Immigration department are each looking for specific contents within the business plan. Thus, when you do not know whom you are targeting, developing an effective business plan becomes exceptionally hard. What is most alarming is that the content of the software developed business plan’s have disqualifying materials for raising capital. It resembles self-medicating one-self when you don’t know what your decease is, which can lead to many other problems.
Why use HafeziCapital for developing your Business Plan?
Given that HafeziCapital works with so many different organization to raise capital, we know the specific requirements that investors, banks, and immigration services have. Thus, our business plan development process focuses specifically on the intended reader of the plan and the specific goals that our client is attempting to reach. Our job is to understand what our clients’ goals are and develop a final product that clearly conveys the intricacies of the business plan to the end-user. The point of a good business plan should never be to have just ANY document in your hand, but rather to have THE document that defines all aspects of your business endeavor and creates the correct road map for investors to obtain a return on their investment. Because of our close relationships with banks, individual investors and venture capital firms, we understand the specific requirements of each and can help package your firm to obtain the necessary capital. If you are developing a business plan contact us and see how we can help increase the chances of you raising the capital you need.