Why are business plans not funded?


Failure is guaranteed if a man does not understand the formula for success and applies them correctly. I say this without any hesitation and I speak from experience in this field. You can be sure that there is a formula for success in all life endeavors and not knowing the law is no excuse. The fact that some of us are wise in our areas of success and stupid in other areas where we experience failure shows that we all have something to offer each other. The same principle applies when it comes to fundraising. If you do not know what are the secrets to successful fundraising, then you will need to hire an expert to help you learn and master the techniques to gain a well-founded knowledge of future success. One thing is for sure, you do not want to become like the masses who are unknowingly incompetent on the subject, often running towards banks and investors with poorly prepared business plans, only to face failure. In this article, I will now provide you with an overview on the world of writing an effective business financing plan to help you raise finances successfully and do so very quickly. The key to successfully raising finances is that your business needs to be ‘Investment Ready’. If you do not have green traffic lights in all these areas that I will address soon in this article, you will face many challenges and will not be able to raise funds.
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The secret to successful fundraising for business growth was revealed to me as I worked for many years with financial institutions providing funding to businesses, in my role as Financial Advisor and Valuation Manager, spending 50% of my time reviewing and analyzing business plans for financing and the remaining 50% managing customer relationships after financing to ensure that they are in compliance with the financial arrangements.
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I can honestly tell you that many of the businesses that were constantly raising funds used the same proven systems. Those who often had challenges were using a host of different systems and hardly understood why they were often unsuccessful using small claims to support their ignorance. You are warning not to fall into the category of the last group and, reading this article will make you one step ahead of the pack.
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These are the top five reasons why a business plan will be rejected for funding:
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1. Marketing strategy shows that the business lacks a competitive advantage in its industry or the business lacks a strong marketing strategy and is likely to fail.
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2. The management team is inadequate and in some cases lacks the competencies required for business success.
3. The business strategy is unclear with the risk of exposing the financier’s capital losses.

4. Financial forecasts are based on a rather optimistic assumption, which when tested by stress indicates that the business will fail if the most likely results in the market materialize.
If your business does not have a plan to address all of the above issues if they arise in your business, you are guaranteed to fail in your fundraising bid. The reason is simple; business plan is a management tool that financiers use to carry out their proper care for businesses that need cash. Financiers have a range of tools that they use to assess the viability of a business for financing and unfortunately many small businesses do not have information on these valuation techniques for financing decisions. This means that many businesses are not ready for investment when they turn to a financier and are shocked that their time and money for producing the business plan is wasted. If small businesses do not understand how they are valued for financing, the risk that businesses will not be able to raise funding for growth will continue to increase even with the proliferation of government-backed loans.

In conclusion, before you as a business owner or manager approach lenders or investors for financing, we advise you to make sure to 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, no doubt seek professional help from experts, as you are more likely to get the funds you need, with the right business support solution than to try to do it alone and face it. with rejections.

I wish you great success in your business financing journey and keep reading my articles in this subject area and management issues in general.