smallbusiness.co.uk: Helping your business think big

Seeking funding for your new business can be a real challenge. Meeting with potential investors or banks is daunting, but having a sturdy business plan to back you up should help boost your confidence and your chances of gaining finance.

It is essential that you provide the right type of information to enable your would-be lender or investor to make an informed decision with ease. If you give the preparation of your business plan careful thought and follow a few simple guidelines you are much more likely to succeed. Here are some top tips from SmallBusiness.co.uk and Graham Small, a partner at national law firm Lewis Hymanson Small:

Avoid assumptions - Don't presume your bank manager or investor will know everything about the specific kind of business you're in. There are thousands of types of business, so they can't possibly have a detailed knowledge and understanding of them all. Remember they’re a generalist and it’s your job to be the specialist or expert.

Describe what your business does and how it will make a profit. Use straightforward language as much as possible. Tell them who your customers will be and how you will sell to them – for example online or from a shop. Identify your competitors and give reliable information about your market.

Choose an easy layout - Organise your business plan into sections so it's easy to refer to the information. Use headings and sub-headings and try not to overload them with information that isn’t relevant. No-one likes ploughing through pages of print, so why not try using bullet points, with a brief explanation.

Know the numbers - Support your request for funding with solid facts and figures. If you can, supply the previous year's accounts, up-to-date management accounts and forward projections. Projections must make sense and be achievable and, ideally, backed by firm orders. If you are borrowing, don't forget to include how you see the money being repaid.

Be concise - Stick to a clear, reasoned outline of your objectives and the exact purpose of the funding. Make the plan as short, compressed and readable as possible.

Sell yourself - Include a section on the management of the business. Detail the people involved in the business, their background and their skills. Your personnel are more important than anything else as they will be driving the business forward.

In a nutshell - Put yourself in your banker's shoes. Imagine that you are considering the business plan and about to part with your own money. The plans that stand out from the crowd are those that are accurate, focused, realistic and, above all, make sense.  If the plan makes sense and you trust the person in front of you to do a good job, you would be more willing to open your chequebook.

Graham Small can be contacted at Lewis Hymanson Small on 0161 827 1800 or 0207 464 4300 or 07970 850484. Email: graham.small@lhs-solicitors.com

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