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How to Hook a Funder with Your Business Plan

Date: 04/20/15 By: PlanIt Business Team

Your business plan and vision are meaningless if they never become a reality. Business plans are used for a wide variety of goals, but securing funding for your startup is often one of the most important functions. Possible funders are always looking for new, lucrative opportunities and it’s your job to hook them on your unique idea.

Use this guide to attract, and keep, funder’s interested in your business.

Show, Don’t Tell

Anyone can come up with a cool new idea, but it’s not about what you can dream up in your spare time between flipping burgers, it’s about what you can actually develop into an actionable business plan. Investors don’t fund ideas, but they fund something tangible – simply stating your business idea isn’t enough. You need to have detailed and articulated explanations of the target market, how you fulfill a need and details on the specific process.

Banks vs. Investors

Maybe you’re in the market for a bank loan, or maybe you’d prefer to find an investor willing to go in on your business as an equity partner. No matter whom you want funding from, it’s important to highlight the best parts of your financial projections.

If you’re seeking bank funding, detail how quickly you can pay back your loan with an articulated debt paydown schedule and if you’re after an investor, show their return on investment over time.Your business plan should highlight key parts of your business and show it in the best light possible for prospective funders.

Emphasize What Matters

Your idea is not necessarily the most important part of your business to a funder – it’s the success probability. Some of the greatest ideas may not be solid investments, because of who is behind them or the overall success rate. You should position your idea as something that starts with your vision, but develops into an actionable business opportunity over the course of the plan. Identifying the target market and taking advantage of an opportunity is just as important, if not more so, than coming up with a great idea.

Hook a Funder

Just like a good story, a good business plan needs to hook the reader, or in this case, the prospective funder. Business plans should start with your vision and positioning your dream, but ultimately end with what you can show, not what you can tell. Everything in your business plan needs to be written with the target funder in mind, from the way you phrase your vision to how your financial forecasts play out.

At the end of the day, if you can’t get funding for the next big idea, it’ll stay as just that – a thought in the back of your mind.

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