If you are interested in getting more funding from your investors then you must include answers to the following questions in your business plan.

1. How much money do you need?

You should not just give a number that is completely random. You should be very specific in the dollar amount that you need and you should be prepared to make some adjustments in the operation of your business based on the amount that you are able to secure. A venture capitalist will probably ask you to explain what you will do if you are not able to get the total that you have requested. You can be prepared to give an answer if you have made a list of the most important things that you need to operate you business successfully and a list of the items that you could operate without. Be sure that your arguments for needing this funding are detailed in your Financial Plan and base it on some fairly basic assumptions that are realistic. When we say “realistic”, this means that you should base it on the research that you have done while you were completing your Company Analysis, which market you are targeting (done in a Customer Analysis), what best practices are being used by other businesses in your industry (done in the Industry Analysis), and the Competitive Analysis that you complete.

2. What Is The Value Of Your Company?

This is called Valuation. There are two kinds of valuation: pre-money, or how much your company is worth without substantial funding; and post-money, or value of the company with funding. Nowhere in your business plan will you specifically state how much your company is worth - but you will drop many hints throughout. For example, you may talk about hard data pertaining to market size, needs, and growth rates. The best way to answer the question “What is the valuation of your company?” is to explain that you will let the investment market decide that figure. That is, you must approach many VCs at the same time to create demand for your company, which increases its value.

3. Do you have an exit strategy?

When one company purchases another company or when an IPO comes into play, this is an exit. This is important because any investor knows that they will see only see the return on the investment that they make once the company is purchased or when it goes public. There is no way to tell how soon this will happen. The only thing you can control is the growth of your company. You should know every thing that there is to know about your company and should be ready for anything that comes your way. You can make this a strong point in your business plan. You should, as well, know exactly what your competition is up to in the industry. This will allow you to speak intelligently to your investors about which companies you can see that may want to purchase your company after you have reached some of the planned milestones in the operation. Your investors will get to see these milestones very clearly in your Financial Plan and your Operations Plan.