How to Write Your Business Plan Funding Request
- September 15th, 2014
- Comments Off on How to Write Your Business Plan Funding Request
A business plan funding request section isn’t always necessary, because not all businesses create their plans with the intention of requesting funding. Many startup companies often require funding in order to get their business ventures off the ground, in which case a business plan is the ideal platform to use to attract venture capitalists looking to invest in new companies. Your business plan should highlight the ways in which your company will differ from its competitors, and what makes your approach uniquely successful.
Business Plan Funding Request
When drafting the funding request section of your business plan, it’s important to include the following details:
The current amount of funding that you require.
A projection of the funding you will require over the next five years.
How you plan to use the funding: Do you require funding for capital expenditures? Debt retirement? Acquisitions? Will it serve as working capital? However the funds will be used, this is where you explain your plans.
Future financial plans that you have for your company: Do you intend on being bought out or acquired by another entity? Do you plan to purchase or acquire another business? How will you structure your debt repayment plan? This is one of the most critical focal points for potential investors, because it speaks directly to the timeliness of the return on their investment. Your answers to these questions indicate exactly how quickly you’ll be able to repay your investors, and the best investment is one in which you recoup what you shell out quickly and easily.
You’ve already given the specific amounts of funding that you’re requesting at present and in the foreseeable future, but to even more clearly illustrate your intentions to potential investors, consider including a timeline for the funding that you’ll require. After the amount that you’re requesting up front, define the amounts you’ll require in the future, and the time periods that money will support. Don’t forget to mention the type of funding you’re requesting, as well. Do you want debt or equity? What terms would you like applied to your loan? Make sure everything is spelled out in black and white.
Lastly, you’ll need to include documents that provide insight into your financial history and your prospective finances. Investors will require this information in order to determine if you are worthy of funding, or if backing your endeavor might be too high a risk.
Continue on to your Financial Projections section >