How to write a business prospectus
Any new venture for which you are seeking funding requires a clear and well-thought-out prospectus that states your goals and demonstrates how you will go about achieving them.
Your prospectus will include information about what you and your business will sell or promote, your background and all of the possible outcomes for the venture. Few areas of business attract as much attention as new ventures, and few aspects of new-venture creation attract as much attention as the business plan.
State your purpose immediately. Don't refrain or be coy about your objective. Be clear, concise and honest about what your business goals are, and how you will provide a return of investment.
Introduce your partners and describe their background and function within your organisation. Describe how they will help you achieve your goals and mission. This list should include the names of your accountants, lawyers, distributors and suppliers.
State the potential risks as well as the potential rewards of your venture. Describe your market, your competition, the socio-economic health of your location and of the business you are in and include all variables that may impair or benefit your company.
Describe in detail how any money that the lender gives you will be used. Draw from any graphs, charts or spreadsheets you have made and turn it into easy to read prose for the lenders. Remain brief but give them the bottom line.
Provide a marketing strategy. Explain who your target market it is and how you plan to obtain clients, and if you already have some clients waiting in the wings for your company's funding to come through. Having a stable of clients awaiting your services or products can be impressive to the lender.
Explain how you will personally assure the company's success. Let the lenders know that you have a stake in the company and will fight for the company's health and prosperity.
Offer verifiable references of your work and credit history. Being forthright about your past successes and failures gives the lender a full, realistic picture of your prospects. It also makes good sense since the lenders will invariably do this research themselves if they consider funding your organisation.
Tell your lender when they will be repaid. Show them that you have made plans and projections to pay them back.
- Business Opportunities Handbook: How To Write A Business Financing Proposal
- Social Venture Partners: Rhode Island: How to Write a Great Business Plan
- University of Colorado at Boulder: Writing Your Research Prospectus
- University of Florida: Writing a Prospectus
- Root Cause: Writing a Prospectus: A Winning Document for Investors
- Send a cover letter and resumes for you and any of your partners.
- Be realistic in describing your goals.
- Be open to different kinds of loans and investments.