Forgotten Your Password?

Need to Register?

Michael R. Elliott

If You Don't Do the Plan, Plan to Fail

Wednesday, May 2, 2012 - Article by: Michael R. Elliott - Approved Capital Partners - Message

Elements of the Funding Process

If you want funding, you have to do the business plan. Yes, the whole enchilada!

The plan is your calling card for funding.

It is going to feel like doing the research paper you hated in college, but this time it actually counts for the money grade.

It will have to contain several critical elements that we will discuss in detail later, but if it does not have these items, then it is not a complete plan;

1.The Executive Summary
2.The Biographies of the Principals
3.The Funding Request
4.The Exit Strategy
5.The Strategic Plan
6.The Marketing Plan
7.The 5 Year Financial Projections
8.The 3 Year Financial Historical Analysis
9.The Last 3 Years Tax Returns
10.Supporting Documentation
Remember, first impressions are everything. If you spend time making anything look good, this is the time it counts.

Also, since the people you read your plan, read hundreds of plans, they get very good at finding the holes. Always have a qualified 3rd party review you plan before you submit it to a funder. Let them read it as a critic and a cynic. It doesn't do you any good to have an unqualified friend read you plan, take it to the toughest critic you know.

The uncomfortable truth about your plan is that it may get lost in the flood of plans coming to a capital source, but the more memorable and easy it is to understand; the better off you will be as it gets kicked around the office and discussed over lunch. So, packaging is important but effective brevity is king!

The capital sources look at your plan as a direct reflection of you; they are judging your capabilities, your competence, your experience, your insight and your understanding of your product, market and desired outcomes.

You must address their main concern; risk, not return. The risk in any funding decision is trying to determine the likelihood of success and the limits to the downside. If you create an effective plan it will quickly address the risk to the capital source.

Two things that I have noticed about those who review your plan are; they generally believe you, unless you make them suspicious, so appropriate detail is better than fluff; and they understand what they need to know about your business before you think you are done explaining it, so keep it simple.

Tomorrow we will start breaking the planning process down. Just keep this in mind... If you can't create this plan, you may not be ready for funding, and you might not be ready to be in business. Yes, these documents seem like a waste of time but the more of them I write, the more I use them to prove out my ideas and get 3rd party feedback.

Have a great day!

Didn't find the answer you wanted? Ask one of your own.

Get an answer
Subscribe to our news feed.