Drawing up a business plan for funders

Drawing up a business plan for funders: 10 things to do and avoid doing.

Do

1. Gain commitment from customers and potential customers.

Ask your customers for orders or a letter stating their intention to purchase to show that you have developed a product or service for which there is a market.   Gaining interest from customers at an early stage will also enable you to gain valuable feedback which can help with product and/or service development. If you do not yet have any customers undertake some market research to gain an understanding of their attitudes and preferences.

2. Plan for sales and marketing

Forecast realistic sales targets and plan how you will achieve them.  Monitor and adjust the effort to ensure that the targets are met.   A business with sustainable revenue streams can grow and thrive. The marketing plan should take into account current trends and outside factors.

3. Plan operations

Scale will change the way in which parts of the business work.  Plan how you will scale up for growth and plan how you will monitor quality and service level agreements with increased volume or turnover.  Consider a recognised framework such as ISO9000 or IIP which can provide guidelines.

4. Understand how you will meet or better industry standards.

Examine the credentials which are required for recognition in your industry and plan how you will achieve them, for example compliance with legislation regarding health and safety, specific industry training which must be completed, compliance with EU regulations and standards etc.

5. Plan for the future and the present

The short term plan should serve the long term goals, meaning that the plan should include long term and short term goals and objectives.

6. Know how much money you are looking for

This may sound as if it’s stating the obvious, but it is very difficult to communicate with funders until you have a specific idea of how much money you require and what it will be used for.  You will need to complete the plan to arrive at this figure.

7.Provide the information requested by the funder

Funders may request information from you in different ways.  Some ask for an executive summary or brief information in the first instance and some require very detailed information.  Some require submission of information online and some prefer a meeting.  Be prepared to be flexible in the information which you supply.

8. Don’t expect to complete your business plan in 2 hours.

A business plan is the result of deep thinking and consideration.  It is not completed overnight and takes effort and patience to produce.  The planning process is to help you overcome potential hurdles before they trip you up.

9. Don’t rely on gaining a grant or loan – have a plan B

No funder is obliged to lend or invest money.  They invest because they can see potential in your business or because the funding you have applied for meets a set of criteria.  In the eventuality of you not getting an investment this should not be a reason to cease trading, it should be a reason to find an alternative source of revenue even if this means organic growth at a slower pace.

10. Don’t expect to borrow money if you have no plan to repay it. 

Figures will help to back up the proposal.  Most funders will expect to see management accounts, bank statements and future forecasts.  If you have not yet started trading then forecast figures for profit and loss, cash flow, and balance sheet will be expected which are based on a realistic idea of the market.

More information from:
Gillian Hunt. Email: gill@escata.co.uk
www.escata.co.uk
Tel. 07988 616 704
Helping business growth