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How do I Write a Business Plan Cover Letter?

Helen Akers
Helen Akers

A business plan cover letter provides a summary of the purpose of your business and how you plan to accomplish that purpose. The audience is most often a potential investor or group of investors. Given the purpose and audience, the letter should be written in a persuasive manner and detail the desired investment amount, as well as what type of return the investor can expect to receive.

Selling a business plan to potential investors is the purpose of a business plan cover letter. The investor needs to be convinced that the business plan is carefully constructed and has significant market potential. The name and a description of the business should be included in the first few sentences.

Business plan cover letters should be written in business letter format, and signed by hand.
Business plan cover letters should be written in business letter format, and signed by hand.

Within the first paragraph of the cover letter, the reason for contacting the potential investor should be disclosed. In addition, a brief summary of the product or service that the business will offer should be provided. Details about how the business will serve the market competitively should also be included in this paragraph.

A summary of the target market and how it will be reached might be included in the second paragraph of a business plan cover letter. At the very least, the letter should provide some rationale for how the business will become profitable. Potential profitability can be communicated by highlighting several competitive advantages, unmet market needs, or market test data.

Popular slang terms used in text messages should be avoided when writing a business plan cover letter.
Popular slang terms used in text messages should be avoided when writing a business plan cover letter.

The business plan cover letter should also indicate a long-term strategy. A summary of where the business intends to be in three to five years is vital to a potential investor. Having plans for growth and expansion of the business can be an attractive selling point. Tying the nature of the business to the interests of a potential investor is also a good idea. For example, if an investor has a strong interest in the welfare of disadvantaged children and your business plans to provide services to that segment, this information should be included in the cover letter.

When writing a cover letter for a business plan, you should also include a paragraph that outlines the exact amount that you are seeking from potential investors. Details should be provided on why that amount is needed and how it will be used. A convincing cover letter will often state what the investor will get in return. For example, a percentage of stock or equity can be exchanged, or a particular return on the investment can be provided within a specific time period.

The ultimate goal of a business plan cover letter is to convince an investor to provide funds for your business. Besides being informative, the letter needs to highlight the positive aspects of the business plan without going into too much detail. The cover letter should indicate that the complete business plan is attached for further review, and be enticing enough to persuade the potential investor to actually read the plan.

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    • Business plan cover letters should be written in business letter format, and signed by hand.
      By: Andres Rodriguez
      Business plan cover letters should be written in business letter format, and signed by hand.
    • Popular slang terms used in text messages should be avoided when writing a business plan cover letter.
      By: bloomua
      Popular slang terms used in text messages should be avoided when writing a business plan cover letter.