Using your business plan to source for funds

By

Angela Itambo-Ihunweze

INTRODUCTION TO THE TOPIC

A business plan is a written document used by the writer to communicate his or her intentions of the business to readers other than him or herself.

It contains all the elements that will ensure the business in question excels irrespective of uncertainty and risks

Objectives of the lecture is as follows

We will identify the various types of funding

What financers of this various funds look at in your business plan

What makes up a business plan Presenting your business plan to investors FYI

The various types of funds

Financing are classified into two:- Equity financing; This funding requires the promoter to

relinquish part of the ownership to the funds provider. The funds provider demands a share in the profit in form of dividend. To ensure the funds provider enjoys this benefit he or she will demand involvement in the management of the business either directly or employing a representative to do so. Equity funding could be informal e.g Angel Financing from loved ones, wealthy friends or individuals. Example of some one who kick started his business with this form of funding is Henry Ford founder of Ford motors

Equity funding continued

Another form of equity financing is venture capital; this are equity funding from institutional investors. They represent financial institutions . In Nigeria we have institutions such as First Funds of First Bank.

Funds are classified into two:-(Part 2)The second category of funding Debt Financing:- Investors who provide this funds

are only interested in providing short term funding, this are in form of loans in exchange for collateral. The providers of this funds are not interested in being part owners of the business or ventures. Providers of this funds could be friends, financial institutions. Irrespective of the outcome of the business, the principal and interest of the funds will have to be paid at the agreed time

What financers of this various funds look at in your business planEquity Funding:-To ensure the objective for funding is achieved , investors of this form of

funding when reading a business plan are after the following:- The business concept matched with the market analysis Is this business a short lived phenomenon or it is here to stay. Who will manage the business? They will want to see the

organizational structure, have you gathered competent hands? Research have shown that most equity financers will bet on the horse rider, rather than the horse. Globally it has been accepted that with an experienced team, there are chances the business will succeed. That is why in contemporary times you witnessed pouching of staff to a new organization

Action point; you must be ready to assemble a team that is experienced not only on paper, but also in reality. The ideals of this funding is if you win they win, if you loose they loose.

What financers of this various funds look at in your business plan Part 2Unlike Equity financing, the debt financer is after the

financials;- The cash flow of the business plan, when will revenue

start coming in Is it feasible, they also look at the proposed sales

forecast The collateral in exchange, can it be turned into cash to

retrieve the sum that was invested? Action point:- You must carefully analyze your

expected sales forecast and draw up a cash flow that will be realistic and convincing.

What makes up a business plan

Cover page Table of contents Executive Summary Introduction to the business concept Industry/Market analysis Business & strategy Operational structure Personel and organizational structure Risks analysis Implementation time table Financial analysis

Presenting a business plan

Before writing, ensure what style will be preferred by the reader Even if you engaged an outsider to write the business plan, ensure

he or she writes it from you point of view. It should be typed Minimum of Font size 12 The language should be fun to read Not too lengthy except you are attaching drawings or documents that

is mandatory . The executive summary should be captivating to want the reader to

read more and act A cover letter should be accompanied when submitting your

business plan Protecting your business plan, add a caveat emptor on non

disclosure of the information read

Presenting a business plan Part 2

Ensure it is proofread Be ready at all times to defend your plan

impromptu Even when submitting don’t divulge all

your business secrets

About Angela Itambo-Ihunweze

She is the CEO of ANGELA ITAMBO COMPANY. They company offers the following services and products:-

They business advisory to entrepreneurs They organize training for entrepreneurs and their staff

on business management topics They publish reports and merchandise other related

information products on entrepreneurship They write business plansContact Phone number:- 08033280453 THE END. THANK YOU