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You have a great idea for starting a new business or expanding your current one. You’ve thought through all the issues and created a roadmap for success. Now all you need is the funding to put your dreams into action. But how are you going to secure that funding? You can’t just stroll into a bank or sit down at a committee meeting and hand them your notes and spreadsheets. You need to write a business proposal to lay out your plans and request the funds.
You’re an entrepreneur, you think, not a writer! You’ve never written more than a business letter and a meeting agenda. Don’t worry. It doesn’t need to be an intimidating process, because there is a basic structure to every business proposal. Here are the four parts, in order: simply 1) introduce yourself; 2) show that you understand your customers/clients and their needs; 3) describe how your goods and services meet those needs and present your expected expenses and profits; and 4) persuade the bank or committee that you have integrity and can be trusted with the money.
You don’t need to start out with blank pages, either. You can speed up the proposal writing process by using pre-designed templates and samples, along with simple automation software.
The length of your proposal will vary depending on the complexity of the project you are proposing and how much funding you require. It is obviously easier to describe an expansion plan and present financial data for an existing business than it will be to describe how you will get a new business up and running. Your proposal might be only ten pages long, or it might need to include dozens of pages.
The secret to creating a successful funding proposal is to show a need or desire on the part of your prospective clients/customers, and then to show how you will meet that need and profit from providing the solution. When requesting funding, you also need to keep in mind the needs of the bank or funding committee. Put yourself in the other party’s shoes. What does your prospective funder need or want? What are their concerns? How have you gathered this information? What sort of information about your business experience and financial know-how will the funding institution want from you before handing you money? Lending institutions and grant committees want to understand your background and your plan to determine if your business is likely to succeed. A bank or investor will also want to see your plan for paying them back.
Start your business plan funding proposal by introducing yourself and the proposal with a Cover Letter and Title Page. Your Cover Letter should be brief: simply explain who you are, include all relevant contact information, and print the letter on your company letterhead. The Title Page should simply introduce your proposal and the specific project you are proposing. Some examples might be “Business Plan for New Panne Bella Italian Bakery,” “Proposed Expansion of Grayle’s Hardware Store,” or “Funding Proposal for New Downtown Art School.”
After the introduction section comes the section where you talk about your clients or customers: the people who want or need your goods or services. Here you will include topics that demonstrate your understanding of the business market. Depending on the complexity of the project you are proposing, you may or may not need to start off with a detailed summary (called an Executive Summary or a Client Summary). In this section, describe the market need that you intend to fill, and provide statistics and data to back up your assertions. You need to impress the proposal readers with your market knowledge. This is not yet the place where you talk about your goods or services. This section is all about proving a need or desire for your business.
After the market-centered section comes the section where you explain how your goods or services will provide solutions to the needs you described. You’ll add pages with titles like Products, Services Provided, Benefits, Price List, Services Cost Summary and so forth—include all the topics you need to describe exactly what you intend to provide and how much it will cost. Depending on the sort of business you are requesting funding for, you may also need to include descriptions of Facilities, Equipment, and Personnel that you need for your proposed project.
At each step in this section, you will need to describe expected expenditures and returns. Depending on whether you are requesting funding for an existing business or asking for money to launch a new enterprise, you will need to prove your case by including pages with titles like Funding Request, Income Projection, Breakeven Analysis, Project Budget, Annual Budget, Cost Management, Cash Flow Analysis, and Return on Investment. Also make sure to include a …