How to Write a Business Plan That Actually Gets Funded

What a business plan is actually for

A business plan serves two separate purposes. The first is external: convincing a bank, investor, or grant body to provide funding. The second is internal: forcing you to think rigorously about your business model, your market, your costs, and your assumptions before you commit significant time and money to them. The best business plans serve both purposes.

The standard structure

A business plan for funding purposes typically includes: an executive summary (the most important section - many funders read only this), a business description (what you do, who for, and why it matters), market analysis (the size of the opportunity and your competitive landscape), your business model (how you make money), your team (why you and your team are the right people to execute this), financial projections (revenue, costs, and profit over three years), and your funding requirement (how much you need, what for, and how it will be repaid).

The executive summary: write this last

The executive summary appears first in the document but should be written last. It is a one to two page overview of everything in the plan. It should be compelling enough that a reader who only reads this section understands your business, believes in the opportunity, and wants to know more. Many funding applications are rejected at this stage without the main plan being read. Invest disproportionate time in getting the executive summary right.

Financial projections: the section most people get wrong

Banks and investors are experienced at evaluating financial projections. Optimistic projections with no supporting logic raise immediate red flags. Your projections should be conservative, well-supported with clear assumptions, and show the path to profitability or positive cash flow. Show three scenarios where possible: base case, optimistic, and pessimistic. This demonstrates that you have thought rigorously about the risks, not just the upside.

Market analysis: show you understand your customers

Do not confuse market size with your addressable market. If you are opening a coffee shop in Norwich, the "UK coffee market is worth £4.2 billion" is irrelevant. Your addressable market is the people in a reasonable travel radius from your location who might visit a coffee shop. Show that you understand your specific customers, their needs, and why they would choose you over existing options.

What funders actually look for

Beyond the numbers, funders are assessing: do you understand your market? Do you have a realistic plan to reach customers? Is your team capable of executing? Have you identified the risks and thought about how to manage them? Can the business generate enough cash to service the debt or provide a return on investment? A plan that answers these questions clearly and credibly will get further than a plan with an impressive-looking revenue chart and no supporting logic.