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With the economy growing and most businesses looking to capitalize on this situation, many are looking for some additional funding to spur and accelerate their growth. Like the old saying goes, “strike while the iron is hot.” If you are in a situation where you want to start a new division, group, product line, or even company and need funding, there are 7 key components most prospective funders will most likely look for in your business plan.

If you have these 7 elements, your likelihood of getting someone’s attention will go up significantly. And when they compare companies to invest in, those that don’t include something about these elements are usually ignored. Check them out…which ones do you have in your business plan?


Executive Summary and Company Description

​Every business plan needs one of these…regardless of whether you are seeking funding or just trying to run your business more effectively. The executive summary should include a short description of your business spelling out a mission statement, the products or services you offer, a listing and description of your company’s management team and employees, and the location(s) where you are headquartered or do most of your business. This also includes an explanation of why you expect the business to succeed and how you think it can grow even more if it had more funding available to use.

It’s also helpful to provide details about the company’s history, the needs your business fills for your audience, and the specific customer segments you serve. In addition, the business plan should highlight your business’s competitive advantage (e.g., employees with relevant expertise or new innovative technology or customer experience).


Market Analysis

​​Prospective capital providers need information about the market opportunities for your business, including market research showing the outlook of the industry, the existing competitors and their products, pricing, distribution channels, and how your business will meet those challenges. Information about your existing and target customers should also be included that supports what was described in the Executive Summary. This is a great place to also include more about your specific sales and marketing strategies.


Your Products and/or Services

​It goes without saying that you need some detailed information about the product(s) and/or service(s) your business provides. The more you can include to let the potential funders know about these the better it will be received. Information such as photographs, a description of the benefits it provides to customers, the product life cycle, when it will be launched (if it is a new product), a description of research and development, and the steps taken to protect intellectual property, such as copyright, trademark, or patent filings are some of the key areas to discuss.


Your Business Organization and Management Team

​​In addition to what you gave an overview of in the Executive Summary, this is the place where you can include more detailed information about our organizations structure and the people that run it. Include something about the legal structure of your business, i.e., whether it is a corporation, partnership, LLC, or sole proprietorship.

You should always include information such as an organizational chart showing the management of your business. This should include specific details about your team’s management qualifications, past successes, and how their expertise will contribute to the success of the business…including resumes of the business’s owners or key employees to serve as supporting documentation.


Prospective Financial Outlook

​​Perhaps the most important (and relevant) sections you have to have is some discussion about why you believe the business likely to be successful today and into the future. If you are an established business you should also provide detailed financial information such as income statements, balance sheets, and cash flow reports for the past several years. Regardless of where you are in your business, you should provide detailed financial projections for the next five years that are tailored to the funding request. The financial projections should be optimistic but must also be realistic and pass the “scrutiny test” of believability.


Previous Funding and Proposed Use of Funds

​​If your business has obtained funds previously and has any outstanding loans, this information should be provided in the business plan. The key rule of thumb is never hide anything because it will always be found and can usually kill any deal when discovered. In addition to the current situation, there should be details about how the funds sought will be used (equipment, salaries, research and development, etc.), how the funds will be repaid, and the impact the funds will have. It is also helpful to provide a copy of the business’s credit history.



​​It is very important to a future investor to understand the timeline of when the funds will be needed and how they will be used over a specific range of time. Outline when your business plans to meet important milestones aimed at increasing the company’s value, such as launching new products, hiring key employees, meeting targeted sales goals, etc. While this doesn’t have to be exact, it should give a relatively close approximation to major milestones when it comes to financing.

What to do next…

If you need any assistance with putting any of this together for some potential funding needs, we are here to help you with all aspects of your business planning. We also help business owners with the preparation of a well-developed business plan that will help you to obtain the funding your business needs. If you need help creating a business plan, call us today to set up a consultation.

However, even if you don’t need funding right now, this is an excellent process to go through for your business so you have a good handle on exactly what is going on from year to year. We recommend you do this annually so it stays current and top of mind. It is also very handy to show to others that might have a need, such as bankers, accountants, new product/service companies, etc.

If you ever have any questions about business plans or any other aspect of your business, just ask and we’ll be happy to answer them. Or if you want to better understand how you can minimize and lower your risks (which every business owner wants) then please read some more about risk management and how you can help determine your own risk. I’d also be happy to meet with you (complimentary of course) to discuss your own personal situation further and give you some insights about how you might want to proceed.

I hope you have found this helpful and given you a different way to look at your business. If it has, please share this with others inside your company and your colleagues who are running or leading other businesses. Our primary mission at Generations Law Group, LLP is to help everyone find productive ways to lower their business AND personal risk. This is just one way you can start to do this…but it will tell you a lot about you and what has happened over the past few years with regard to your business risk. Let’s make sure your risk is as low as it can be while you continue to grow.

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