Tailoring Your Business Plan to Funders Needs

Why your business plan is critical however you fund your Business

There are many ways to fund your business but whichever you chose it is critical to write a clear business plan and to tailor it to the needs of your funding audience.

It has always been said that employers decide whether to give a candidate the job within the first minute of an interview. The same is true when it comes to funders and your business plan. They will decide whether you are a viable proposition whilst reading the first paragraph.

This means your executive summary is critical. You need to tell the reader the key things they want to know up front. This demonstrates that you understand their specific requirements and know how your business will meet them. 

Tailoring your business plan 

Lets take a look at your funding options and how you might tailor your plan:

 

Self funding

 

 

If you are funding your own business it can be all too easy to not have a clear business plan. Many small business owners and start-up entrepreneurs carry their plans in their heads and some don’t really have a business plan at all.

However, a business plan helps you to be more disciplined in running your business and helps ensure limited funds go further.

It helps you think through every detail of your business, how it will make money, what the costs will be and how the cashflow will look to ensure the business is viable before you commit your own money. Having done the thinking required to produce a good business plan it will also boost your confidence in yourself and the business

 

Friends and Family

 

Asking for help from friends and family can be a good low-cost option to fund yor business. You can normally get better terms than through a bank and they can be very supportive. However, it can test even the strongest of relationships so it is important to formalize the arrangements.

 

Your business plan is critical in communicating that you are serious about making the business work, formalizing the arrangements and for your investors to understand how the business works.

 

Bank Loans

 

Obviously banks want to ensure the money they lend to you is safe. Your business plan needs to communicate the keys points banks will use to assess the level of security. As well as wanting to understand your business they want to know what security you can offer, how much money you will invest alongside theirs, what your track record is, your trading history, personal credit rating and about the management team.

 

When it comes to the numbers, banks will assess your business by looking at the cashflow projections. They want to be sure these are both realistic and predictable. So tell them!

 

Investors

 

Equity investors put up money in return for a share in your business. They want to see a significant return over a five to seven year period and want to know how you will help them achieve it. Potential investors will want to see detailed numbers but are likely to make investment decisions based on the team, especially on their experience of building a company from scratch before and on the proven track record of the business idea itself. It is critical that you highlight these elements in the executive summary and back them up with clear evidence in the main body of the plan.   

If you want more information on how to write a business plan that will ensure business success contact Suzanne Cleal, Striding Out Business Coach by emailing [email protected]

 

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