7 tips for your business plan when raising finance

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Raising finance remains one of the biggest issues facing SMEs regardless of whether you are a start-up or an established business. One of the most important documents needed to raise debt or equity for is a business plan. Having been both a receiver and a producer of plans for over 25 years, there are a number of common mistakes I see in many of the plans that cross my desk.

Here are 7 tips to improve your business plan and ensure it has the best chance of raising the finance required.

Know your audience

Knowing your audience is a key consideration in the production of the plan. The type of information and the emphasis will be different depending on the recipient. A bank or debt provider will be interested in looking at historical and current trading performance, how safe the revenues are and what security is on offer. An equity provider will be more interested in the size of the market, how fast the business can grow and how large it can be. It is therefore important to be aware of what your audience will be looking for.


The management team and their experience is absolutely key to any funder, and detailed information should be included on the skills and background of the team. Funders like to see a broad set of skills and experience, and much prefer experience gained from the same sector in which the business is operating or planned.

Who are the customers?

An important element of the plan is to be specific in showing who will buy the product or service, and why. The more ‘real’ data you can provide to back this up the better. If it is a B2B company, the names of customers, prospects and targets should be included.

Prove the business model

A business needs to prove it can find customers and earn revenue to prove the business model. An idea or plan on paper can look great, but the proof is in the ability to put the plan into action, find and keep customers and start to earn revenues.

Markets and competition

Most plans are weak on information about the market within which the product or service sits. Usually the business actually knows its market very well but just does not communicate that knowledge in the plan. Taking the market information a step further, an assessment of the competitors should be included. Too many plans ignore the competition or state they have no competitors. Every business has some form of competition, whether direct or indirect.

Cover downside risks

There are always risks in a business, both internal and external. Rather than wait for the funder to work them out for themselves and make their own assumptions, pre-empt this by pointing out the downsides and then show how these risks are being mitigated.

Sensitivity analysis

This is usually more relevant for a bank or debt funder, but it is always a good idea to show the break-even position and show the strength of the business even if the numbers in the plan are not fully achieved.
About the author
Peter Black ACIB, AMCT, MBA has over 25 years of strategic, funding and banking experience and runs Snowball Consulting, a firm helping SMEs in this area.
Peter Black

The Forum’s finance adviser Peter Black gives some advice on the essential things to cover in your business plan when seeking finance for your small business.