What is the difference between a business plan and an investment proposal?
Our clients often ask: "What is the difference between a business plan and an investment proposal, and what document is required to raise finance for a business?" Well, the difference is in the focus the document communicates and the audience it pitches to.
While a business plan considers What the business is selling and Why - the value proposition, its main focus is on the How - the operational aspects of the business. This is because the key purpose of a business plan is not to sell a business idea but rather to show how it is executed through realistic goal setting, rational operational and competitive strategies, and a solid business structure.
An investment proposal, on the other hand, delves into the What and Why of a business concept, persuading investors in the business opportunity attractiveness. The business structure and execution are expected to be of a high standard, but it is not the major focus. The major focus is on the customer value proposition, the business scalability, the strategic capabilities, the competitive advantage and its sustainability - all the aspects which will generate and maintain an above-average return on the funds invested in the business.
A business plan would normally be sufficient for raising somewhat small finance with banks, business angels and other financiers. An investment proposal is a must when raising substantial funds with venture capitalists, business angels or other significant investors.
Julia Podgorbunskaya, CPA, Head Planner at Professional Business Plans
May 2017
(61) 02 4295 0079
[email protected]
www.ProfessionalBusinessPlans.com.au
While a business plan considers What the business is selling and Why - the value proposition, its main focus is on the How - the operational aspects of the business. This is because the key purpose of a business plan is not to sell a business idea but rather to show how it is executed through realistic goal setting, rational operational and competitive strategies, and a solid business structure.
An investment proposal, on the other hand, delves into the What and Why of a business concept, persuading investors in the business opportunity attractiveness. The business structure and execution are expected to be of a high standard, but it is not the major focus. The major focus is on the customer value proposition, the business scalability, the strategic capabilities, the competitive advantage and its sustainability - all the aspects which will generate and maintain an above-average return on the funds invested in the business.
A business plan would normally be sufficient for raising somewhat small finance with banks, business angels and other financiers. An investment proposal is a must when raising substantial funds with venture capitalists, business angels or other significant investors.
Julia Podgorbunskaya, CPA, Head Planner at Professional Business Plans
May 2017
(61) 02 4295 0079
[email protected]
www.ProfessionalBusinessPlans.com.au