Does your start-up need an injection of capital to get off the ground? Are you looking to move to the next stage of business growth? If the answer to either of these questions is yes, then are you ready to take the plunge into the world of fundraising?
Stage one is to prepare a sound business plan, honestly covering all aspects of your business and demonstrating clearly to investors or funders why they should back these plans and how they can expect to get a return.
The truth about fundraising
Not everyone understands the key relationship between the business plan and fundraising. A survey was carried out on 500 business owners across the UK to discover those who had successfully reached the business start-up stage and to learn about their real-world fundraising experience. The survey raised a series of questions concerning the process of fundraising, the importance of the business plan, the length of time it took to find investors, the type of investors that eventually funded the business and the amount funded.
The findings revealed that the average duration of the fundraising process was three to nine months and that the average amount of investment was £50,000 to £80,000. The pandemic is increasing these times. Investors included venture capitalists, angel investors, private investors, and financial institutions. All of the 500 start-up owners that were polled agreed that their business plan had been critical in attracting investors.
The research showed that investors are prepared to support businesses of all types and sizes. For instance, a small café business in London, employing five people, raised £60,000 from angel investors; while a manufacturing plant located in Manchester and employing 15 people raised well over £600,000 from venture capitalists and banks. Interestingly but there were also several micro-businesses that were able to launch with investments as low as £20,000.
The importance of a business plan
What the survey respondents had in common was a sound, realistic and well put-together business plan. Investors need a clear business plan to evaluate the business including its mission, clear business model showing how money will be made, marketing and sales, operations, financial feasibility and growth plans. The business plan gives investors the information they need to determine when they can expect to recover their investment and the likely return on their money. It should be in-depth, accurate, customised and focused to be successful.
Developing your business plan
If you are uncertain about business plan development for fundraising, why not seek out the services of experienced financial and business planning specialists. Your funding could depend on it. Well thought through ideas, combined with a shrewd strategy, and carefully planned projections will improve your chances of long-term financial survival and growth. Click here to find out more around our business plan service.
Is your business plan for funding investor ready? Find out by taking our Investment Readiness Healthcheck.
Our nationwide team of EFM Experts can help you create a powerful, investor ready business plan to give you the best possible opportunity of securing funding. Contact EFM via email@example.com or call 01582 516300 to find out more or click here to book your free one-hour consultation.