The key to securing funding: A solid business plan

Have you been trying to secure funding for your business and getting nowhere? What if I told you the key to securing funding is a solid business plan?

A robust business plan will help potential lenders and investors understand the vision and goals of your business. It also helps business owners by bringing focus and understanding of the business strategy.

Any business plan should include:

  • an executive summary, highlighting the main points, designed to grab the attention of potential lenders or investors;
  • details of key personnel, their responsibilities, skills and experience;
  • market analysis of the company, its products or services and its competitors;
  • details of current and intended client base;
  • a marketing plan targeting new or existing customers;
  • historical financial information covering the last three years of trading (if available) – accounts (audited if available), and key accounting ratios;
  • cash-flow data, including information about standard payment terms and typical debt turn;
  • financial forecasts for the next three to five years, presented as the historical information, and highlighting the key underlying assumptions;
  • cash-flow forecasts covering the next two to three years (or in the case of a start-up or turnaround, until the business moves into profit), clearly highlighting the amount of funding required;
  • how creditors, capital expenditure, debtors and stock will be managed over the forecast period;
  • how equity investors can exit or refinance the business, and realise their investment.

Other considerations

  • How much of the owner’s money is invested in the business? The more the owner is committed, the more attractive the proposal
  • Will investors be eligible for any tax reliefs?
  • Mention any backing already received from other investors/lenders
  • How will the business meet interest payments and repay the capital element over the period of the loan?

Fincrest is a firm of Chartered Accountants operating remotely and helping small business owners to grow their businesses and minimise their tax liabilities.