The Ultimate Guide to Writing a Business Plan That Stands out for Funding

How to get business funding

Business Plan That Stands out

Explore why a business plan is crucial, what goes into producing one, and practical strategies to maximize it to learn how to design a business plan in the most effective manner to obtain money.

One of the first things you should do after having a business idea is to write a business plan for your company. You can use this to determine whether your business idea has the potential to be profitable. Lenders will want to know whether the company you plan to launch will be profitable enough for you to be able to repay a loan or other investments.

Make sure not to download a business proposal template if you’re seeking online examples or templates of business plans. That is a unique document that is used in business transactions between businesses to complete a certain project.

Why is a business plan that stands out necessary to obtain funding?

Investors like to fund businesses that are expected to become profitable in a specific length of time, have a ready-to-use marketing plan, and operate in favorable markets. In a business plan, all of that information is presented. Having a business strategy is essential to obtaining money for the following reasons.

  1. Credibility

Lenders will want to know you have a specific, comprehensive plan for repaying the loan before they decide to invest money in your company. Please include details like:

  • the cost of your goods or services in the market
  • expected expenses versus projected sales for the first year
  • estimated revenue during the course of your first five years in business

No matter how much money you’re asking for, going through the effort of putting all of this together is just one more way to demonstrate your credibility as a potential business owner.

  1. Reputation

Why should potential investors take your business seriously if you aren’t? The investment community is smaller than you might imagine, especially when you become a higher level investor. You might not even have time to make an opening statement if you arrive at a meeting without having your business plan ready.

You do not want to develop a reputation as an unprepared businessperson. Show that you take your business plan seriously.

  1. Need for business

Simply because you have considered a company idea and described every facet of it does not guarantee that investors and banks will share your opinion. Banks primarily consider your ability to repay a loan, whereas investors support companies they identify with.

More than you might think, there is a much greater need for your business. Your company must be profitable in order to repay a loan. You need customers for things to take place. You must provide clients with something they cannot obtain elsewhere in order to attract them, whether it’s a good, a service, or an experience. Therefore, you must first understand the importance of business planning.

What should your business plan for funding contain?

Since you’ll probably need to introduce yourself and your business idea, make sure every notion you provide is complete and precise. If you’re looking for investment, your business plan should include the following business plan components:

1. Information about your company 

There are several reasons why you should consider your business’s organizational structure. Several points to think about

  • Will you operate on your own?
  • Do you work with a partner?
  • Incorporation vs. an LLC?

The way a company is structured affects how well it can repay loans. The legal framework can make a difference in whether you must repay a loan in some other way—perhaps with your house or other assets—or whether the residual debt is divided among shareholders or partners.

2. Target market 

At the risk of appearing repetitive, without clients, your company cannot turn a profit. Consider your business idea, look into several areas to determine your target market, and ask yourself the following questions:

  • Do a lot of other companies already exist that are similar to yours?
  • Are those companies prospering?
  • Is there a void in what they provide?

Alternatively, you might choose your target market first. Imagine that your target market is young adults between the ages of 25 and 40. Find those people and approach them with the afore-mentioned questions. In either case, the queries must be addressed in great detail.

3. Your financial strategy

The phrase “by selling a lot of products” or “by having a long list of clients” is far from sufficient in this situation. Anyone can claim that. Similar to what you did with the market aspect above, ask yourself these questions:

  • What will your prices be for your services?
  • Will they really pay that much?
  • How much must you sell to make a profit? In order to profit?

The harsh truth is that your product is only worth what consumers are willing to pay for it, even if it has a market value of x dollars. As long as your plan still ensures that you can repay a debt, it is ideal to underestimate and over-deliver.

4. The amount and purpose of the funds you need

Don’t be embarrassed to admit that you don’t have a strong grip on how much money you’ll need to reach your goal. When applying for a bank loan, the process is a little different because you will be granted a set amount based on a variety of considerations.

Additionally, some lenders have use case limits, which place constraints on how you can use the funds. Before deciding if this loan is the best option for you, take that into account among all the other requirements.

Giving an investor specifics about your plans for the money is typically not a deal-breaker, but the more information you can provide, the more you increase your chance of getting a loan.  

Four suggestions for designing funding-appropriate business plans

Here are some suggestions to make sure you are getting the most out of your business plan now that you fully understand what should be included in it, how to gather the necessary data, and how to actually build one.

  1. Do not forget anything

Your chances of obtaining investment will be negatively impacted if you leave some aspects of your company up to interpretation or speculation. You have no control over the information that investors choose to fill in the spaces with if you leave it up to them. To ensure that nothing is overlooked, make sure your research and writing are as complete as possible.

  1. Create personal writing

Henry presents a business to a potential investor in a scene from Parks and Recreation. Henry Bistro, his original concept, is something he is deeply enthusiastic about. Ben enters the scene with a different scheme that has a better chance of succeeding. Henry begins to deliver that and quickly realizes that both he and the investor are uninterested. His return to Henry’s Bistro causes a dramatic shift in the atmosphere of the space.

That scene from a TV show may be fictional, but it serves as an excellent example of how incorporating a little of your personality and enthusiasm into your company plan may really pay off.

  1. Avoid using generic phrases

Give as much information as you can. Use precise names, dates, and other details. By doing this, you will not only demonstrate that you have done your research but also your commitment to achieving those goals by the deadlines you provide.

Even though it may be overwhelming to feel as though you must commit to so much, investors are searching for dedication. The level of detail you include in your business plan will reaffirm to them that you are serious about your venture.

  1. Be clear about what you’re requesting

Never hesitate to request the exact amount you require, no matter how much it may be. It might not be a good idea to be vague about the number. Bank loans are different since, as was already mentioned, you only get the amount you are eligible for. It’s crucial to arrive at your meeting with angel investors knowing exactly how much money you need.

Even though it won’t be as dramatic as Shark Tank, there will likely be some back and forth once you present your business idea and state how much money you need.

To conclude, one of the most crucial papers you will write for your company is a business plan. Here, you describe who you are, what your company does, and how it will succeed this is where writing a mission statement comes in. You will want to be as thorough and precise in your research and writing if, like most people, you are utilizing your business plan to obtain money.

Tell them why they would be fortunate to be a part of your venture if you want potential investors to be as serious about your business as you are.