Through his growing age and increasing grumpiness, Bill Morrow of Angels Den has become fed up with the masses of business plans he receives. His complaints focus around the point that a business plan is not indicative of a viable business. instead, it shows their capability to make a spreadsheet on Excel and that you are incredibly good at guestimmating what these numbers mean.

He also notes that few Angel investors actually spend any time actually reading business plans.  So while many accelerators and grant programs ask for them, in many respects it is a pointless exercise as team and concept are more important.

In a casual but honest presentation, Morrow explains why business plans are a waste of both time and money for companies and investors.

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Do you really need a business plan?

The referendum is a huge decision for the people of Scotland alone to make.

The problem is that the average person is not aware of the real truth behind the current economic situation, as “the facts” have become clouded and manipulated so much by both sides. Not enough has been said about the consequences for business owners and entrepreneurs, whose life’s work or future ambitions could be dashed by the verdict, having a huge impact on the future of independent Scottish business.

Over the last 12 months, I can reveal that all of the deals that Angels Den have facilitated for Scottish entrepreneurs, that is 100% of them, have been funded by London-based investors. There are some truly incredible entrepreneurs in Scotland; the country has so much to offer to the business world, but there is a huge gap where investment is concerned.

Rather than liberating the country, a move away from the UK will run the risk of stifling the amazing new start-ups that Scotland has to offer.

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There just isn’t the investment appetite in Scotland

This may include something as intangible as a feeling about a business concept – maybe they are having a good day and are feeling generous, or a pitch taps into a childhood passion of theirs. Perhaps the person pitching to them comes across fantastically well, and despite not loving the business, they get a feeling that they could really work with the entrepreneur.

None of these, or a million other reasons why they might invest in your business, are within your control, but to help improve your chances of getting an investor on board, here are my top points to take note of that investors look for:

Your Commitment
How committed have you been to the venture so far? Investors will want to know how much you have personally invested into the business; this can be in financial terms but also blood, sweat and tears. This is a great opportunity to show your passion for the business and that you won’t just give up without a fight. You need to be able to show a genuine commitment and strength that proves to an investor that you’re determined to make this thing happen.

A Unique & Distinct USP
You may think your business is something special, but proving that to a potential investor could be a challenge. What differentiates you from the competition? You need to show that you either have something totally new or a new way of approaching an established and profitable business. Investors don’t want to hear the same old idea that they’ve already heard a million times before, so before you pitch, consider exactly what makes your business different and unique in the market, and why it’s a must-have service or product to potential customers.

Market & Competition
You might have a brand new and unique idea, but what’s stopping others doing the same, or established players expanding into your area? Patents, trademarks, specialised skills and the expense of setting up are all factors that can stop or at least slow competitors entering your market. Potential investors will be interested in hearing exactly why it would be difficult for someone else to simply come along and offer what you are doing better and more cheaply than you can.

Track Record
Do you have an experience or expertise in running this kind of business, or any kind of business? Investors will want to know what you’ve done previously, whether you have any relevant employment history and what your knowledge of the market you will be entering is. They will be well aware that there is more chance of success if you have the relevant skills and experience to launch, run and develop the business you are asking them to fund. This is not to say that if you have a fantastic business idea but no experience you won’t find another way of convincing them to part with their money, especially if they have expertise and knowledge in the field that they feel they could add to your venture.

Profit Potential
You might have a winning USP, tonnes of relevant experience and think you have the investor wrapped around your little finger, but will the business actually make any money? This is one thing investors will definitely want to know. Profitability has as much to do with pricing structure, production issues and delivery, as it does with demand so make sure you absolutely know your figures. If you’re stumbling over the numbers, potential investors could easily lose confidence in you so make sure you don’t lose them over this

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What are Investors looking for?

As the Bank’s purse strings look set to remain tightly closed for business loans, many small businesses are left struggling to find the funding they so desperately need to expand and grow their business.

So what is the answer? Many businesses have turned to angel finance and found it ready, willing and able to help them.

I am passionate that every business looking to grow, in any part of the world, should have the opportunity to access funding and am regularly asked how to win angel finance for a business, so here are my top 10 tips:

Financial Forecasts

All financial information needs to be expertly produced, easily understood, realistic and justifiable. Mistakes here will cause a loss of credibility and interest so you must know your figures inside and out. Investors are looking to see a return on their investment, and need to be sure that you have a cast iron grip on the finances of the business and know exactly how you are going to turn their funding into profits.

The Presentation

Those offering angel finance aren’t just investing in your business; they are also investing in you. You need to be passionate and likeable, as well as precise and persuasive. This is your opportunity to sell yourself and build up a rapport with the Angels.

Passion

How passionate are you about your business? Make your zeal for your venture irresistibly contagious and you’ll stand a far better chance of winning over your business angel audience. If you believe in your product or service, are committed to its success and convey this in your pitch, you are one step closer to funding.

Expertise

The relevance of your background will play its part in determining whether a business angel decides to invest in your venture. What skills do you have? Where did you previously work? Have you ever run a business before? Investors will want to know whether you have the ability to launch, develop and grow a business.

Research, research, research

Find out all there is to know about your customers, competition and the potential of the business. You need to become an undisputed expert, and to be able to convey this knowledge to those around you.

Competitors

Are there other firms developing the same idea? How flooded is the market currently? Angels are interested in protecting their investments so you should aim to prove that your business model is strong enough to fend off competition and that you have the relevant patents or legal protections to ensure that you will have no direct competitors.

Differentiation

A pitch must convey the uniqueness of the opportunity you are offering the Angels in front of you. By the end of your pitch, you must have convinced them that there is something special about your business, something that differentiates it, if only marginally, from what exists in the market today.

Questions

A full and complete understanding of your business, its market, finances and strategy are essential as Angels will expect those presenting to them to be able to answer any question thrown at them.

Talk to people in the know

Getting as much impartial advice about your business or start up idea as possible can be invaluable when looking to start or expand your business. Angels Den provides free Business Funding Clinics which are a great opportunity for you to get free advice on your business and ask any questions you may have about the funding process.

Sacrifice

What sacrifices have you made for your business? How much time and effort have you committed to your venture? How much have you personally invested in getting the business to where it is today? Business angels are looking for individuals who are 100% committed to their business, so present your sacrifices with pride and you’ll be sure to gain their respect.

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How to find funding & grow your business in 2014