Preparing for funding applications
To successfully apply for business funding, you will need to do some preparation.
Organise your finances
Check that your personal and business finances are in a good state and well organised.
Funders may want to see:
- your personal or business credit report
- bank statements or business accounts
- a cash flow forecast covering the next 12 months
- information about any debts, creditors or investors
Test your business idea
The best way to test and validate your idea is by understanding and researching your market. This helps you to understand:
- who your customers are, what they need and how they behave
- how the market is performing, and whether it’s growing or declining
- who your competitors are, and how much they charge
- how you will get your products and services to your market
- what potential customers think of your idea, and what they’d be willing to pay
Who to test with
Don‘t test with friends and family. You want honest responses from people who represent your future customers.
Don‘t test with friends and family. You want honest responses from people who represent your future customers.
Understand your competition
Understanding your competition helps you to understand what’s unique or different about your product, and how you can market that to customers.
Aim to find out:
- how much competitors charge
- how competitors advertise and promote their products or services
- how competitors make or provide their products and services
- what makes your business different, and where you could fit in the market
Mix techniques – see what you can learn as a customer and what you can learn from desk research.
Role playing as a customer
- Visit their stores or websites and make a purchase
- Use their products or services
- Contact their customer service teams
What you’ve learned will help you identify your competitors’ strengths and weaknesses, and spot gaps where your business could fit.
- Visit their stores or websites and make a purchase
- Use their products or services
- Contact their customer service teams
What you’ve learned will help you identify your competitors’ strengths and weaknesses, and spot gaps where your business could fit.
Doing desk research
- Read annual reports to find out about revenue and profits
- Look at online reviews and social media posts
- Check press releases and media coverage
This helps you learn more about your competitors’ values and ways of working, and can help you identify how your business is different.
- Read annual reports to find out about revenue and profits
- Look at online reviews and social media posts
- Check press releases and media coverage
This helps you learn more about your competitors’ values and ways of working, and can help you identify how your business is different.
Write a business plan
A business plan sets out your business objectives and how you will achieve these. It explains to funders what your business does, who it serves and how it will grow.
Your business plan should explain:
- your business objectives and how you will achieve them
- what you know about your customers, competitors and the market you’ll operate in
- how your business will make money, including your pricing strategy and sales forecasts
- your sales and marketing strategies, including how you’ll find and keep customers and where you’ll advertise your business
- how you’ll run your business, including whether you’ll need any licences, buildings, equipment or staff
- how you will identify, offset and manage any risks that could affect your business
- who will be involved in running the business, and what qualifications or experience they have
Prepare a cash flow forecast
A cash flow forecast shows how money will move in and out of your business. It helps you identify when you may have extra funds or cash shortages, and allows you to plan for these periods.
Your cash flow forecast should cover the next 12 months.
What to include
- Your business income – money from sales, grants, loans and any other business income
- Business expenses – materials, rent, utilities, tax, wages, advertising
- The running total – what’s left at the end of each month when you subtract your expenses from your income
- Your business income – money from sales, grants, loans and any other business income
- Business expenses – materials, rent, utilities, tax, wages, advertising
- The running total – what’s left at the end of each month when you subtract your expenses from your income
What to remember
- Your figures should reflect your bank account – think about when customers pay their bills, not when you issue invoices
- Base the forecast on how your business has performed so far or on what you can safely predict from market research
- Your income and expenses can change based on the time of year and on market factors – give yourself wiggle room
- Your figures should reflect your bank account – think about when customers pay their bills, not when you issue invoices
- Base the forecast on how your business has performed so far or on what you can safely predict from market research
- Your income and expenses can change based on the time of year and on market factors – give yourself wiggle room
