Business Plan: To Secure Funding

(Refer all the older posts on business plan to get better understanding of the subject)

(Refer our High Quality Management Encyclopedia “Management Universe” at: http://management-universe.blogspot.com/)

Business Plan’s One Major Objective: To Secure Funding

In majority of the cases, one of the major objectives of the business plan could be to make a good case for seeking the required funds to support the new business venture. The requirements of each type of agency willing to advance the necessary capital may be specific and different from each other and therefore, business plans should be appropriately customized to satisfy these requirements.

Generally we come across following types of fund providers:

1. Bankers: Bankers are primarily interested in the long term financial aspects of the plan. They may not emphasize as much on the other issues like marketing or operations. They will definitely be interested in collateral as security for the loan. They will tend to support less risky ventures. Repayment of the loan will be a top most consideration while advancing the loan.
2. Venture capital fund managers: Their primary interest is capital gain to themselves as well as to the outside investors whose funds they are managing. Therefore, they take interest in new venture’s products and services, markets, credibility of the promoters and their management team and venture’s growth and return on investment potentials.
3. Business angels: In addition to their strong interest in capital gains from their personal money invested by them, business angels also try to size up the entrepreneur's qualities like passion, interest, integrity, creativity, responsibility and accountability for the new venture and how well they themselves will be able to relate with the entrepreneur over a period of time. Thus, they seek an opportunity to personally participate in the venture.

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