The business proposal, also known as the investment proposal, is a business letter that you send to potential investors. It has the objective of procuring funding for your business. It lists all the details on how you intend to develop and operate a business. It must also include revenue projections and an estimation of how long it will take you to repay your creditors.
Sections of a Business Proposal
-
Presentation: present yourself to the potential investor
Product Mix: description of the product or service
Delivery: the methods you will use to deliver your product or service
Feasibility: will you pay the entire financed sum back to your financers, or keep them as members of the board?
Financial Projections: how much money will the business make, what are the startup costs, and the costs of doing business on a day-to-day basis?
Business Proposal/Investment Proposal example
[company name, edited out] SRL
[physical address, edited out]
[primary contact name, edited out]
CEO at [company name, edited out] SRL
[phone number, edited out]
This email address is being protected from spambots. You need JavaScript enabled to view it.
Dear Mr [edited out]:
Our CFO talked with you previously, I’m [edited out], [company name, edited out] SRL’s CEO.
First off I want to thank you for accepting our request for sending you the proposal for our VR games stand business. As you may already know, we have already released successful games and amusements in Second Life, Blue Mars, Project Entropia, and Facebook.
You can read our financial reports for the last five years here, on the same site you will find the CVs of all of our staff members.
Business Proposal
There are going to be 200 million VR headsets sold by 2020. The research firm Tractica forecasts that the market for consumer virtual reality content and hardware will reach a whopping $21.8 billion in revenue by 2020.
In not-so-unrelated contrast, the rise of broadband consumer internet almost completely killed the community cinema and video arcade of the 1980s and ‘90s.In mega-cities in which amusement adopters, video game aficionados, and people in need or want of being entertained could find many of the aforesaid businesses in the marginal areas — let alone the central ones — there isn’t any anymore, or what is left is an aberrant vestige of the past.
What is more appalling, in big cities that featured video arcades and “pleasure lane” types of business street configuration (like pedestrian streets), video game recreation is missing. It has been clearly delegated to the malls’ leisure courts. Gone are the days when video gaming formed part of fast-paced, day-to-day downtown as well as uptown district life.
In the pedestrian malls of cramped mega-cities where cinemas and video arcades were a part of the landscape, the situation is felt when the shops that used to be video game galleries are now dingy fairs and cinemas, televangelist churches.
Product Mix Definition
As outlined in the previous section of this business proposal, we aim to cater to early amusement novelty adopters, video game aficionados, and people in need or want of being entertained.
Our idea for a modest attempt at doing this and bettering the unsettled situation of lack of amusements is to bring cutting-edge leisure where it once thrived. We want to do it without the risks of getting stuck in any particular place by means of an easily transportable virtual reality games stand.
Customers will purchase passes for the attraction, each pass will be valid for fifteen minutes of game-play time. Each fifteen minutes pass will cost approximately $2.40.
Facebook owns Oculus, one of the top three companies in VR equipment sales. Because of this, striking a partnership with either Oculus, Facebook or both companies may help the business grow greatly. An affiliate or lead generation agreement for when we refer a customer to Oculus and the customer buys from them should also be added to the marketing mix.
If this business succeeds, it might allow for global escalation to bigger markets. We have been thinking about India and China in that regard.
Since this is a highly innovative idea, as of now we aren’t aware of having any real competitors offering a similar product or service. The few amusement arcades that still stand in the venues we plan to deploy the stand are no real competition because they cater to the family and children segments.
Delivery Plan
This stand will be small, about a third the size of a common fair stand, around thirty-two by twenty-two inches in surface size. This is to give the business capacity for mobility. Also, to do away easily with tying the outfit to a particular venue to the exclusion of others.
It will be operated by one person and it will have the capacity to run networked first-person shooters, innovative virtual reality amusements, and games designed for VR platforms.
As venues that come to mind we have thought of:
-
Getting a concession in a mall’s amusement court (low priority, but good to generate buzz)
Parks, squares, and street malls (previous granting of needed permits by the city)
Renting it, with an operator provided by us, for events (birthdays, etc)
Because the stand will be movable if we secure a permit to stand at a determined perimeter of blocks, at a, say, pedestrian mall, we can switch the location as we see fit. If we do this we will be able to stand near similar businesses to test a cut-throat approach, or we can move several blocks away along the same pedestrian mall street. We can even strike collaborative deals with said businesses in which we send clients to each other.
Advertising, PR, and Promotion
We have many ideas to advertise and promote this business that, for the sake of brevity, aren’t included in this business proposal. Among the methods of advertising we have in mind we can count:
-
Sandwich board ads
Transit shelters Signs
Influencer marketing
Flyer Distribution
Geo-fenced DOOH
Additionally, we have thought of making the operator double up as a barker for the service. The operator will be a person that will have not only technical skills but also entertainer skills.
Feasibility
As of the writing of this business proposal, we consider it will take us from two to three months to break even, and from three to five months to pay you back.
Financial Projections
Charging at a rate of sixteen cents per minute, We expect this business to make roughly from 70 (sixty) to 140 (one-hundred and twenty) dollars daily. In an ideal scenario of only half of all the work hours being occupied by two customers that buy passes, this business would make from around 6000 (six-thousand) dollars monthly, or 72000 (seventy-two thousand) annually.
Costs Breakdown
-
Laptops (2) (Dell Inspiron 15 7000, 34watts): $3538.77
Headsets (2) (Oculus Bundles, Rift+Touch kits): $1712.31
Portable Generator (Honda Eu 20, Soundproofed Inverter): $410.38
Game (two boxes): $97.03 (+ License to use as Paid Amusement, $…)
Cash Register: $913.23
Stainless Steel Cart: $190
Advertising Campaign and Promotional Material: $1847.23 (budget for around six months)
Paperwork Fees: $…
How Much Money We Need
We need $10210 to develop this opportunity.
Please note that we haven’t included the paperwork fees in the calculation of the costs of this business proposal, and it may be around an additional $500 or whereabouts. We haven’t factored in a license for games to use since we can develop this in-house ourselves. We can start thinking about licensing third-party games for the business after we break even, start generating profit, and, more importantly, have a concise insight of what our customers want exactly.
Next Steps
Please let us know if you are still interested in this opportunity, if you reply in the affirmative, we will send you a copy of our business plan and marketing mix, that we have already drafted.
Yours sincerely,
[edited out],
CEO at [edited out] SRL
© Martin Wensley 2019-2022 — Business Proposal
Image Credit: Mike Lawrence