don’t do the following
Claim a lack of jurisdiction
Some entrepreneurs get carried away in their eagerness to demonstrate the barriers to entry that distinguish their company from others. A “barrier to entry” is proprietary information or knowledge, or established management team expertise that no one else can claim. The factors that make your business stand out are alluring, but the reality is that no business is without competition.
The Industry Analysis section of your Business Plan should show the size of the industry in which you compete. The market analysis will show the subset of that industry that you will focus on. The competitive analysis should show the strengths of your competitors and how you will overcome them.
You can have your cake and eat it too, in other words. You need to demonstrate that there is enough competition to convince investors that the market is big enough to profit big, but that your strategy is focused and unique enough to navigate an exclusive path through the waters of that competition.
Use first mover advantage as your main exit strategy
Companies whose only exit strategy, or investor pay point, is to flood the market with a new product or service and then sell the company within a year will not find worthy investors. Things move too fast in the information age. Investors want a company that can grow rapidly but steadily in phases. They look for Business Plans that show a sober, realistic look and fiscally responsible exit strategies.
Target a single large company to eventually buy your smaller company
For example, if your company is developing new software, don’t put all your eggs in the basket of Google and Microsoft. If your business plan’s exit strategy hinges on a larger company buying yours, provide parallel case studies. Show sufficient evidence that the conditions are the same for your company as for the successful sale of the case study companies.
Also, show why a larger company would not want or be able to develop the same product in-house.
Let’s be absolutely clear:
Whose Claim lack of jurisdiction
Whose Use the first move advantage as your main exit strategy.
Whose Go to a single large company to eventually buy your smaller company.
Avoid those business plan mistakes and your path to funding will be much clearer. Be sure to put your completed business plan aside for a few days and review it again with fresh eyes.