11 key elements of a high quality business investment proposal

11 Key Elements of a high quality Business Investment Proposal
By Andrea Comastri

When looking for a loan or venture capital to invest in a new or existing business, it is
essential to develop a high quality proposal. Developing a good proposal requires:

 Plenty of advance planning
 A detailed understanding of your business
 Some accounting knowledge
 Focus
 Writing ability

Most investors and lenders expect to see a carefully planned investment proposal.

This can often be a summarised and customised version of the company's business plan.
Every company should have a business plan as a “living document” to help provide the
company a blueprint and a guide to where the business is going. A well-thought-out
business plan will help keep any business on track. A common reason for business failure
is the lack of, or the not following of, a business plan. A carefully prepared business plan
is an essential document for any business and an invaluable monitoring tool. It should be
reviewed each year and have measurable goals and key performance indicators.

Every investment proposal is different, because every investment is unique. However, a
successful investment proposal must focus on and answer three basic questions for the
investor:

1. Is my investment safe?
2. When will I get back my initial investment and profits?
3. How much money will I make?

In general, a business investment proposal should include the following:

 A concise history of the business
 The level of investment required
 How the investment will be used
 How the investment will be repaid (if a loan)
 Information about:
o Facilities, Equipment and Technology
o Products and/or services
o Production capabilities
o Markets
o Competitors
o Sales and marketing strategies
o Management and staff
o Mission and Objectives
o Financial projections (minimum 3 years)
o Financial statements and tax returns (past 3 years)
Page 1 - 11 Key Elements of a high quality Business Investment Proposal by Andrea Comastri ©Simcom Global Trade Solutions

Below are the 11 key elements of a high quality business investment proposal.

1. Executive Summary.

The Executive Summary should be brief (2-4 pages). The summary aims to give the
investor a quick overview of the proposal and grab the investor’s attention. The objective
is to convince them to keep reading and to give the proposal careful consideration.

The summary should include a brief description of the following:

 Name, address and telephone number(s) of the business and contact person(s)
 Purpose of the loan or investment (include 5 or 6 key points)
 Investment required
 How the funds will be used
 Company's history, its facilities, equipment, products and/or services
 Markets, competitors, sale and marketing strategies
 Management's expertise
 Companies objectives in the short, medium and long term

2. The Company.

If the company is already in operation, provide a detailed description of the development
of the company over time. Include:

 Name
 Legal structure
 Owners and percentage of ownership of each one of the owners
 Significant changes in ownership over time
 Industry
 Products and/or services
 Acquisitions (if any) and the dates when they occurred
 Subsidiaries (if any)

3. Products and Services.

Provide information about your products and/or services. Include:

 Inventories in stock
 Production costs
 Selling prices
 Realistic sales forecast for the next three years
 Suppliers and their credit terms
 Own Credit terms

4. Use of Funds.

Describe how the money will be used (eg. product development, inventories, equipment,
marketing, working capital, etc.) ensuring the investment sought is adequate.


If you are seeking a loan, provide the proposed repayment schedule (including interest)
and include it in the cash flow projections.

5. Marketing.

Include details about your marketing, advertising and sales plans.

Include projected sales and annual expenses for each product and/or service. Be honest
and realistic in your forecasts. Also include any marketing research and analysis data
that will support your projections.

Describe your competitors and explain how the company will be able to compete,
identifying your unique selling proposition compared to the competition.

6. Management and Staff

Describe the company's management, their individual job responsibilities, their
employment history and qualifications. Include a projection of each manager's
compensation for the next three years. Provide details of any projected additions to the
management team for the near future and their expected compensation.

List all other employees and their position titles including their projected wages for the
next three years.

7. Ownership.

Provide:

 Names, addresses and business affiliations (if any) of all owners and/or those
who already have an equity interest in the business
 Explain their involvement in the company's management
 Include names and addresses of the board of directors and their relevant
expertise
 Provide details about the number of shares issued and outstanding

8. Facilities, Equipment and Technology.

Provide a brief description of the company's physical facilities (offices, warehouse,
factory, etc.) including:

 Type of construction
 Size in square metres
 Any mortgage or lease
 Outgoings
 Any equipment already owned or that you intend to purchase
 Details and costs of any new facilities and equipment that may be needed

Describe technical aspects or your products and/or services, patents or copyrights you or
the company own.


Include any new technology you intend to develop in the future and associated costs.

Disclose details of the rights you own to any unique technology.

9. Financials.

Include projected financial statements for up to three years into the future. These should
include:

 Balance sheet
 Profit and loss statement
 Sales forecast
 Inventory schedule
 Cash flow forecast

If your company has an operating history, include financial statements for the previous
three years and copies of the company's tax returns.

10. References.

List names, addresses and telephone numbers of:

 Your banker
 Your solicitor
 Your accountant/auditor
 Any business credit references

11.Investment Exit Strategy

Every investment proposal must include the investor’s potential exit strategy. What and
when are the key points at which the investor can leave the investment?

This is intended to be a potential exit strategy, not necessarily a preferred exit strategy.
It does not mean that the investor will exit, but that the investor can potentially exit at
certain points.

Even though investors may be planning to stay in the investment long term, it will
provide them comfort to know when is the earliest practical moment they can exit if they
wish or need to leave the investment.

Most investors would want to see a potential exit strategy between three and five years.

Finally you may include other items such as:

 Charts
 Maps
 Drawings
 Photographs of the facilities
 Photographs of the equipment

 Photographs of the products
 Marketing material
 Details of website and Social media pages

You may choose to include these throughout the document if relevant or include them in
appropriately titled and referenced Appendices.

Choose font, spacing and layout that make the proposal easy to read. Number each page
and include a table of contents. Make sure there no spelling or grammatical mistakes.
Ask someone you trust to read the document; you can be sure they will find at least one
mistake you missed.

Presentation is important, but content comes first. Spend most of your time in
developing and writing the content as per this guide. Allow sufficient time to finalise the
document and its final presentation.

Simcom Global Trade Solutions can assist you with the preparation of a professional,
comprehensive and engaging Business Investment Proposal and many other business
and management documentation like proposals, plans, policies, procedures, etc.

Our aim is to be successful by making you successful!

Call us in Sydney, Australia on 02 9370 0400 or contact us via our website at
www.simcomgts.com


11 key elements of a high quality business investment proposal

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