How to Write a Winning Funding Business Plan

Part 3 (final): The Content

In part 3 of this series of blogs, I want to concentrate on the required content of each section of the plan. I will not talk about the Executive Summary or the Structure of a plan as this was discussed in part 2, last month. If you missed part 1 or part 2 please contact me and I will forward copies to you peter.kelly@pegasusfunding.co.uk

After the executive summary (section 1) the next section of a plan normally discusses the corporate structure and trading history, if any.

Corporate Structure/Company Development: (section 2)

The sub-sections in this section would normally include:

·         Company history

·         The location

·         Ownership structure

·         The management team

·         An organisation chart for the next 3 years, showing starting dates of future employees

·         A description of the staff requirements

·         Details of trading performance to date, if any

·         A list of major accomplishments achieved so far

Company Objectives: (section 3)

·         Turnover and profit and loss for the next 3 years

·         What other objectives can you list, such as:

§  Number of new products per year

§  Number of new distributors, new resellers.

§  Number of new countries to be opened up.

Product/Service: (section 4)

·         The most important part of this section is a description of the ‘Need’ for your product or service

·         Then a description of the product/service. If it is a technical product then describe it as simply as possible

·         What are the unique selling points?

·         Have you done a ‘proof of concept’? if so the results of this should be discussed in detail.

·         What future enhancements are likely?

·         What patent protection do you have?

·         Who are the competition and what are their strengths and weaknesses?

Marketplace: (section 5)

I normally start this section with a description of the barriers to entry for anyone else seeking to enter this market. I then describe:

·         The exact marketplace and the size of that market today and in the future

·         Who the likely customers are and their likely spend

·         It is also a good idea to quote any testimonials that you may have been given and list any letters of intent that you may have

Sales & Marketing Plan: (section 6)

It is sad to say that many plans do not pay enough attention to this important section. I often see well written plans that are nothing more than a marketplace and product description and nothing else. This section must be given great attention.

·         What is your sales model?

·         What is the structure of the sales force and who will manage it?

·         What is the average sales cycle?

·         What sales ratios are you expecting?

§  Number of enquiries to meetings

§  Number of meetings to sales

§  Number of expected meetings per week per salesman

§  Average order value

·         What are the 3 year sales targets?

·         A full description of all the assumptions you have made in deciding upon the sales targets. Without these sales assumptions the funders cannot decide if they believe your sales and profit forecasts

·         How do your prices and service levels compare to your competitors?

·         What is the structure of the marketing department and who will manage it?

·         What is your marketing strategy?

·         A detailed marketing plan, listing with details, all the different avenues to be taken and the costs and frequency involved.

·         Finally a small spreadsheet showing the amount for each type over a three year period, totalled annually

Operations Plan (section 7)

This is often another section that gets forgotten about. You have described the product and how you are going to sell and market it, but you have not described how the company is actually going to operate.

In this section you need to describe:

·         The facilities and location of the office you already have, or will need

·         What people in which positions you already have and how many new people you will need and when?

·         What equipment will you need to purchase?

·         What are the manufacturing, ordering and fulfilment processes?

·         What suppliers have you already in place and which need to be found?

·         What customer service and complaints/returns procedures are in place?

The Management Team: (section 8)

·         Who are they?

·         Their track record and industry experience

·         Their experience in key functions

·         Future management requirements

·         The management team remuneration packages

·         The share ownership structure

Financial Model: (Section 9)

It is important to put into words the information that you show in your financial model. Not everyone is comfortable with complex spreadsheets and prefers to read about the information instead. The subsections in this section include:

·         What are the drivers of your business?

·         A summary and description of all the forecasts

·         The balance sheet

·         Repeat all the assumptions that have been made in the forecasts

·         List all sensitivities

·         A SWOT analysis

·         Details of any historic accounts

·         What corporate Governance will be in place?

·         What are the funding requirements?

·         The amount of capital introduced to date and from where

·         What is the funding needed for?

·         Prospects for the investor, either ROI or IRR.

·         Your exit strategy

·         The costs you have included for raising the funds

There are many different ways of writing a winning funding business plan. My way is not the only way but it is the way that I have used successfully for over 10 years. If you follow these guidelines you will have the basis of a good plan.

If you have missed part 1 and part 2 of this blog please contact me on peter.kelly@pegasusfunding.co.uk or Tel: 01932 244810

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