Obtaining funding should start with a solid business plan. If you write a convincing business plan, then your chances of obtaining funding are greatly enhanced. Lenders and investors want to see proof that customers want your product or service and are willing to buy it for a price at which you can make a profit. The more tangible evidence you offer of this claim, the better chance you have.
Other factors that improve your chances to get funded are:
- Your plan should show good profit potential in a short period of time.
- The higher the rate of return you can offer investors and the faster you can produce it, the better your chances. Your plan should target a clearly defined market with enough size and purchasing power to produce a profit.
- Investors also prefer large markets with high growth potential. They avoid businesses that attempt to be “everything to everybody.” Your plan should clearly explain the “competitive edge” your product or service has over rivals.
- You should show an ability to control both the delivery and the quality of the product or service. Also, that managers and employees have the skills and the experience to make the company a success.
- Show that you have made a personal investment in this business venture.
- If you don’t believe in your own venture enough to invest at least some of your own money in it, how can you expect others to? “Sweat equity”—unpaid personal time and hard work—can be important, but lenders and investors like to see an entrepreneur with an important financial stake in the business. It’s a tremendous source of motivation.
- Lay out a clear, well-conceived, workable strategy for getting this business up and running. Show realistic financial projections covering most likely, pessimistic, and optimistic scenarios.
- Potential lenders and investors want to be sure that the “dollars and cents” of the deal make sense, and that’s why realistic projections are important. Most entrepreneurs underestimate the amount of money needed for start-up. Don’t get caught short!
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I am a student, needing to write out a business plan for an SME as an assignment. I greatly benefitted from these short and sweet tips.
That’s great to hear, Romesh.
We’re happy to supply them for everyone. Please make sure you check out the rest of the articles and also check out our bplans blog for on going tips and information.
I am a lady aged 23 who would love to start a chicken run business but the problem is how to acquire capital. as a family at my place we rare chickens but i would to have a business of my own where i am making my own profit. If at all i can assisted in any way i will be very grateful.
I have a business that has been in exixtence for 2 years,my problem is how to get money even though I have a good business plan that you guys provided the tools for me to have one.
I need good finance start up and good finanacial management!
Hey people i wanna be an intrepreneur so how can i get funding to start my business
I want to start fruit juice parlour targeting an estimate of like 5,000 people. But my problem is building this B/plan. Pliz assist.
I have plan to open a small business, I want to start selling ice-cream with trolley at our ancient temples which there are a lot of tourism come to visit. But the problem is I am afraid that it wouldn’t running, so I need some suggestions from anybody who had experience the first open business.