When it comes to business start up the one aspect that shouldn’t be overlooked is your business plan. This key document is the roadmap for future development and when applying for a new investment or capital. It is crucial in gaining the attention and interest of potential investors and lenders.
If you want to gain outside financial help when starting up a business, which is more than usually the case, then you will need a clear and precise business plan that outlines everything about your business, including your financial forecast. It is essential that you are honest and open when it comes to describing your financial forecast; you should also avoid being overly ambitious and it is important that you don’t ignore financial difficulties as there is a chance you might be able to come to some arrangements.
Your plan helps you to understand your vision and goals for your business and how you are going to spend the invested or borrowed money and how this will benefit the business as well as potential funding providers.
Before you present this highly important document to any investors it is important that you:
o Check that the help you are applying for is still available – you may no longer qualify
o Back up any assumptions in the plan with thorough research
o Get someone to read the plan to spot spelling and typing errors and to ensure that it makes logical sense
If you want the best possible chance at gaining business finance through your business plan then you might want to consider seeking the help of a professional business advisors or accountant. By doing this you are ensuring that the financial information is presented correctly and that key areas stand out.
The financial aspect of your business plan is used to compare your businesses performance against the industry benchmarks. It should include major expenditures and the reasons behind any changes in the working capital such as stock, debtors and creditors. You should also include your businesses balance sheet and explain any profit or loss within your business.
The financial forecast of your business within your business plan should cover a period of three to fives years and should explain how a loan can be repaid or how an investor will get their money back.
Investors or lenders are unlikely to risk their own money if you are not prepared to risk yours. This is a fact that new business owners should take on board. This is because if you are expecting to gain outside financial help you have to be prepared to invest your own money and assets into the business before you start to seek outside help. People are more likely to help you if you are risking your own capital and assets to make the business work. You need to be able to show the extent to which you are committing your own resources. If you do this you are giving yourself more chance of gaining the business finance that you need and want.