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Business Plans Don’t Get Funded

1. The marketing strategy shows the business lacks competitive edge in its industry or the business lacks a robust marketing strategy and is likely to fail.

2. The management team is inadequate and in some cases lack the competencies required for business success.

3. The business strategy is unclear with the risk of exposing the funder’s capital to losses.

4. Financial projections are based on a rather optimistic assumptions, which when stress-tested show that the business will fail if the most likely outcomes in the marketplace materialised.

Unless your business has a plan to address all the above problems if they emerge in your business you are guaranteed to fail in your bid to raise funds. The reason is simple; the business plan is a management tool that funders use to carry out their due diligence on businesses that need their hard earn cash. Funders have a range of tools that they use to assess the viability of a business for funding and sadly many small businesses are clue-less about these evaluation techniques for funding decisions. This means that many businesses are not investment ready when they approach a funder and are shocked that their time and money producing the business plan has been wasted. Unless small businesses understand how they are evaluated for funding, the risk of businesses being unable to raise finance for growth even with the proliferation of government backed loans will continue to increase.

In conclusion, before you as a business owner or manager approaches lenders or investors for funding, you are advised to ensure you take on board the points I have shared in this article with you, very seriously. If you are challenged with the technical details of business planning, by all means, seek professional help from experts, as you are more likely to obtain the funding you need, with the right business support solution than attempting to go it alone and be faced with rejections.