Writing a business plan for funding application

Setting up a company comes with many hurdles to face. For example,  you might look to buy equipment, stock or pay for marketing.

To help you secure the money you will need, you can apply for finance. That might mean you approach a bank for a small business loan or off an investor a share of your company.

When you decide to look for any form of funding, there’s one crucial document you need for the application — a business plan.

A business plan is not something to take lightly. It can go a long way to help you secure finance. So, before you start writing, it would help to know everything it can cover.

This guide discusses writing a business plan for funding application, including:

• Business proposition
• Objectives and strategy
• Leadership
• Financials

Your business plan for a funding application aims to encourage investors or lenders to believe in your business. These groups will only hand out their money for ideas that they can see being successful.

For that reason, your first section outlines what your business proposes. One of the key markers of a successful product or service is its uniqueness.

If your startup has something that only you offer, that is called a unique selling point. That could be the product that you sell or the service you provide.

Even when you sell something unique, you can demonstrate how knowledgeable you are about its market through market research.

You can research who will likely pay for what you sell and other competing businesses.

Research first-hand information through interviews and surveys sent out to the public. Alternatively, look at competitors’ websites and products or services to see how yours compares. 

In your business plan, it’s helpful to include a few specific companies you see as competition. Showing that you know who they are can convince lenders or investors that you know the industry and can overcome competitors.

Provide successful businesses with something similar to show there’s a market for what you offer. But remember to clarify how your unique product or service will be more appealing to customers.

Another important section for your business plan for funding application is the objectives and strategy. Here, discuss what you aim to do and how you’ll get there.

Pinpointing some ambition for your business to aspire toward can help put across the direction you see it going. But also include short and medium goals in addition to long-term ones.

For example, a long-term objective may be to become the largest drinks company in the UK within five years. A short-term one could be to increase your social media following by 200 in the next month.

If you can share your target audience, you can provide your plan with a clear strategy to reach them. You could find a few similarities between likely customers during your market research.

To show your target audience in a way that is relatable and easy to understand, you can create customer profiles (sometimes called customer avatars).

These are summaries of hypothetical people who represent your ideal customers, and they can include:

• Name
• Age
• Gender
• Location
• Occupation
• Lifestyle

If you outline who your audience will be, it also points to how you’ll meet any objectives through marketing. An essential part of how you market is your branding.

Your brand is the identity your startup will put across to the public. It can involve a few elements, including:

• Brand name — what is your business called?
• Logo — what icon is attached to your business?
• Brand colours — what you’ll use three or four colours in your marketing?
• The tone of voice — how will you speak to your customers? (e.g. friendly/conversational).

In your strategy, you can also mention which marketing channels you’ll use. Looking at your customer profiles will help you create a plan for reaching your audience. 

For example, to target 18-25-year-olds, you might use Instagram competitions. 

Writing a compelling business plan for funding applications may also benefit from a description of its leadership.

If you have any business experience or past in the relevant industry, it could help convince lenders or investors to trust your business. 

Beyond experience, you could also have qualifications that back up your abilities. If you don’t have any relevant credentials, look at the online courses from the Open University.

In addition to experience or qualifications, just as important are skills you can bring. Mention where your strengths are that can help you run your business.

For example, you may have abilities in developing websites, which would help you set up your own.

As important as what you are good at, mention areas you look to improve. It can further benefit your plan if you can say how you’ll overcome weaknesses.

For example, if you have little experience in finance, you could write that you’ll use an accounting app like Countingup.

Countingup is a business account with built-in accounting software, making finance accessible for anyone, anytime through their phone.

To banks and investors, another important section in your business plan for funding application is your financial information.

The purpose of the plan and application is to seek money, so it’s essential to clarify how much you want. But it’s also crucial to lenders or investors what you’ll do with their funds.

Research and list the costs for each action you’ll take. An example for marketing could be to ask an advertising agency for a quote.

As well as explaining how much money you’d like to receive, it’s helpful to show how you’ll pay it back in your plan. To do that, you can put together a sales forecast.

A sales forecast calculates the estimated amount of sales you expect by the price you’ll charge for each. It gives you a projection for the amount of money that’ll come into the business over a month, quarter or year.

Now that you’ve written an incredible business plan, you are in a great position to seek funding. But once you get it, you’ll want to make that plan a reality.

To help you manage your finances, use Countingup, the business account with built-in accounting software. With features like expense categorisation, you’ll be able to sort costs quickly and make the best use of your funding.

Turn a business proposal into a marriage of ambition and management with Countingup.

Start your three-month free trial today. 
Find out more here.