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Great planning is often the difference between success and failure, however just because you want it to happen isn't sufficient motive to persuade a funder or investor.
I've reviewed three business plans recently and declined to act on each occasion. Yes they were taken aback and they ask 'Why ? Don't you believe me ?' Put simply, no.
It is essential that you understand what has been written and the assumptions that underpin the financial projections. If you are unable to answer questions logically and concisely, credibility is lost and you've made it all too easy for the funder to reject your application at an early stage.
Here's some advice:
Gauge whether the funding you are seeking is reasonable.
Be clear on why you are seeking finance: growth, capital expenditure, working capital or maybe it is needed to plug losses.
Understand your market (customers/targets/competition) and have a coherent strategy for exploiting the potential.
Consider whether there are any physical constraints on the business e.g. premises/ headcount/supply of raw materials.
Know the assumptions that feed into the financial projections.
Consider how the funds are to be repaid. Ultimately those who have supported you are seeking a return.
What to avoid:
Over optimistic financial projections e.g. exponential growth rates tend to be a red flag. If something looks 'too good to be true' then it probably is.
Don't try to disguise recent business performance as this will undoubtedly be revealed by scrutiny and can affect their assessment of honesty.
Hollow statements that cannot be substantiated without facts or references.
Superlatives and hyperboles: incredible/fabulous/terrific/amazing and similar. My personal favourite is 'obviously'......it's only obvious to you.
Jargon or long sentences containing flowery language, that are meaningless.
Pay a professional to prepare your plan and the financial projections. They should critically assess the assumptions and this will help validate the proposal which significantly increases your chances of a successful outcome.
If you are looking to raise finance and would like to discuss options then please feel free to contact us.
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