Project Financing

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Preparing your business plan 

Introduction
Capitalizing your business is a very important part of your business and should therefore be given ample of your time. Developing your business plan is the single most important step you can take toward your success. To maximize your potential to receive capital, it is vital that you develop a business plan that will guide your company and allow outsiders, such as possible funders, to picture where you are going and how you plan to get there.  Take great care in preparing your plan, it is the road map that will lead you where you want to go.

Lenders or Investors, which way do I go?   They tend to look at transactions from very different angles.  Lenders are mostly concerned with "Can you repay?" Investors on the other hand are more interested in "How far can you go?" or "what is the profit expectations?"  There are certain items of information that are important for both parties and this information should be presented at the start of the project financing application.

A business plan is a selling document. It should clearly demonstrate that a business can sell enough of its products or services to generate a profit and thus attract investors or lenders. The "investment" for the investor or lender need to be attractive, otherwise they may decline your application and look at other more attractive projects.  The main objective of a business plan is to sell the theory of the business to potential investors or lenders as well as to assist the entrepreneur in planning for all aspects of his or her growing business.  One should not underestimate the value of drawing up the business plan yourself.  This will force you to think everything through and it often this thinking process that make the business a success.

The Business Plan should be according to the following criteria: 
The writing should be clear and concise. 
The reader should be able to follow your thinking.
The writing should include the important factors but should not be too long.
Special attention should be given to the layout. Use proper headings to lead the reader.
The Executive Summary is the most important part of the document as it is usually read first to get an overview of the document.  If the reader is interested, the remainder of the business plan is read. 
Proper management qualifications should be highlighted to create a feeling of confidence. 
The plan should indicate that you are aware of what is happening in the market.
Indicate who the competition is and what your advantage will be over the competition.
Should not have an unusual accounting format but indicate clearly that the project will be profitable.