proposal writing tips

Business Proposal Ideas to Attract Investors

June 24, 2016

Coming up with a good business proposal idea might seem like the most difficult part of starting a business. It often seems that all of the most unique ideas have been taken so finding a quality idea is a challenge. Though a business idea is definitely important, the most essential part of making your idea a reality is knowing how to turn it into a business proposal. A business proposal will not only allow you to successfully present your idea to potential investors but also force you to think through all of the aspects of implementing your idea in practice. Here are some guidelines on how to successfully turn your idea into a proposal.

Do Your Research

The first step in developing your business idea is doing research about the market that you will be entering. This research will later be used in the business proposal and is a necessary step that will allow you to become more familiar with different aspects of your future business (https://www.entrepreneur.com/article/175276). The most important question that should guide your market research is whether there is a demand in the market for your idea. In addition, how much competition is there? How do you plan to distinguish yourself from your competitors? At this stage, it is important to find as many reliable statistics and official pieces of data that relate to your business idea.

Get Feedback

An important stage of validating a business idea is getting feedback on its potential (https://fortune.com/2016/01/10/develop-successful-business-idea/). Discussing the strengths and weaknesses of your idea with another person can offer valuable insight of aspects that you were not able to think of yourself. As a result, you should discuss the idea with different groups of people: your potential partners, trusted associates and even future competitors. This will allow you to 'test-drive' your idea and receive feedback which you will be able to use at later stages of the idea's development. In this phase, constructive criticism is also very important -- you will need it to improve your idea and become familiar with some of the idea's overall weaknesses.

Prepare a Business Concept

Preparing a written concept is an important stage that bridges the business idea phase with the business proposal (https://www.forbes.com/sites/kauffman/2012/06/11/how-to-turn-an-idea-into-a-startup-begin-with-a-business-concept-statement/#338989d82396). A written concept is a short, one-page written statement detailing the main features of the business idea. In this stage, it is useful to gather the data and statistics from the market research phase and write them up in a brief and clear way. In particular, the concept should address who the proposed product is aimed at, the demographics that are most likely to use it, as well as what makes it unique on the market. Brainstorming these important questions strengthens the idea and gives it added depth. In addition, it allows the entrepreneur to learn how to briefly describe the idea -- an important skill that will later come in handy when the idea will need to be presented to potential investors.

Identify the Potential Investors

One of the most important parts of writing a good business proposal is knowing who you are addressing the proposal to. A business proposal needs to be adapted to the specific investor and to the specific needs and interests of the investor's capital. As a result, an essential part of developing the business idea is recognizing who will take interest in your idea (https://www.entrepreneur.com/article/252676). In this phase of the process, make a list of the possible investors and make note of why you think your idea will appeal to them. Do you plan to crowdfund your idea? Or are you planning to pitch it to your circle of friends and family? Have you considered contacting a business angel or a venture capitalist? Try to be as specific as possible and identify the individuals you will be addressing your proposal to. At this stage, you should also be clear on the size of your planned business as that will be one of the major determinants on who you decide to send your business proposal ideas.

Draft a General Business Proposal

Although you will be adapting your proposal to different investors, you should have a draft proposal which contains all of the necessary information about your idea. It should show that you have done the necessary market research and thought through all of the important aspects of your idea. Ensure that you have highlighted the strengths of your idea and the way in which it fills a gap in the market, but also describe some of the potential pitfalls and how you plan to overcome them. The general proposal should also contain a section about you (and your potential partners) and your background. This section should be brief but contain all of the important facts that will convince the investor that you are the right person to execute this project. Do you have prior experience in the industry? Does your educational background in some way complement the idea? What personal qualities do you have?

Customize Your Business Proposal and Send it to Investors

Once you have completed all of the above steps, it will be possible to write a business proposal that takes into consideration all of the specific needs and qualities of your potential investor. Ensure that you have identified a common mission statement that will appeal to the investor and make your proposal seem what Inc. magazine calls "responsive" (https://www.inc.com/encyclopedia/business-proposals.html). Crafting a thorough proposal that demonstrates you have done your background research will make you seem serious and stand out from your competitors.

Prepare a Presentation

The final part of your business proposal is not the proposal itself, but rather the verbal presentation that you will most likely have to do if an investor takes interest in the idea (https://www.forbes.com/sites/iese/2013/09/18/presenting-your-proposal-5-ways-to-convince-investors-to-back-your-idea/#7ef4fe2743de). By now, you should have fleshed out your idea verbally many times and presenting it should come naturally. However, there are a few things you should do to convince investors that your idea is worth supporting. For instance, you should present a clear outline of the way in which you plan to spend the funds you are asking for. Also, provide as much data as possible and ensure that your idea is coming across clearly. Finally, be specific and show that you recognize what is expected of you by the investors. This will allow you to turn your business idea into an effective business proposal.

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