Securing funding is more than presenting a fantastic idea. It’s about showing potential backers that your business is a sound investment. A carefully prepared business plan is your tool to do just this for all funding applications. It provides a clear snapshot of your business’s current state, where it is going, and the strategic thinking behind your vision.
So what makes a winning business plan for funding applications and how do you make it stand out?
Here’s our guide to creating a business plan that resonates with funders, whether you’re aiming to raise £100k or over £1m.
1. Start with a compelling Executive Summary
This section is your elevator pitch. It should succinctly and immediately convince funders of the “why now” and “why you”.
Include:
- A brief overview of your business
- The problem your business solves
- Your funding requirements
- How the funds will be utilized
- Your strategic vision for the next few years
Consider drafting this section last. It becomes much easier once the rest of your plan is clearly outlined.
2. Articulate your Mission and Vision
Demonstrate that your business is driven by purpose and ambition.
Mission: The core purpose of your business
Vision: Your aspirations for the next three to five years
Funders like businesses that show drive and focus, not just those chasing fleeting opportunities.
3. Highlight the Management Team
Investors invest in people as much as they do in ideas, so be sure to include:
- Key team members and their roles
- Relevant experience and track records
- Any advisors or non-executive directors
Address any gaps openly and outline your strategy to fill them.
4. Detail Your Product or Service
Detail your offerings in simple, jargon-free language. Explain what your business provides and its significance. Be sure to cover:
- What you sell
- Your target audience
- Your USP over existing alternatives
Ensure it’s easy for someone outside your industry to grasp the value you offer.
5. Demonstrate Market Understanding
Funders need to see evidence of demand and a clear strategy for reaching customers.
Your winning business plan for funders should include:
- Market size and growth potential
- Customer demographics
- Competitive analysis
- Your market entry and growth strategy
Utilise credible data sources and avoid claiming there are “no competitors”. They always exist.
6. Clarify Your Business Model
Clearly explain how your business generates revenue and the associated margins. Don’t assume that a funder will be able to figure it out alone.
Include:
- Revenue streams
- Pricing strategy
- Unit economics
Ensure this aligns seamlessly with your financial projections.
7. Outline Your Growth Strategy
Funders are interested in your future plans and how their investment will have an impact and boost growth.
The key components to include are:
- Key milestones and timelines
- Staffing plans
- Expansion into new products or markets
Be precise and pragmatic about your three-year outlook.
8. Share Financial Forecasts
This section is critical and often challenging, but it’s vital for securing funding.
Do include:
- Three-year forecasts (Profit & Loss, Cash Flow, Balance Sheet)
- Key assumptions
- Allocation of funds
Avoid inflating numbers to impress; funders will scrutinise your figures, so they must be robust and defensible.
9. Address Risks Honestly
You might be tempted to gloss over risks, but funders want to know that you have considered potential challenges and have strategies to mitigate them. Discuss:
- Market or customer risks
- Operational or team risks
- Economic or regulatory risks
This demonstrates maturity and preparedness, not vulnerability.
10. Finish with a Clear Funding Request
End by specifying exactly what you are asking for. Be absolutely explicit about:
- The amount of funding you need
- Its intended use
- What the funder can expect in return
This is your call to action.
Final Thoughts on creating your business plan for funding applications
While a strong business plan doesn’t guarantee funding, a weak one can easily disqualify you. It doesn’t need to be flawless, but it must be clear, well-considered, and convincing.
If you’re serious about securing investment, dedicate the necessary time to work on your plan. Don’t hesitate to seek expert advice, especially for the financial sections.
Need assistance in preparing to attract investors or in getting your business plan for your funding applications ready? One of our Fractional Finance Directors can help you develop the financial plan
Get in touch to learn how we can help.
Photo by Sasun Bughdaryan on Unsplash