Are you looking to start, expand, or acquire a business and are likely to need funding to do it? If so, you will need to know the ins and outs, the fundamentals, and the importance of writing a high quality business case.
When deliberating whether or not to grant an application for funding, lenders will require the usual information, such as access to your credit report, and an overview of your assets. They will also expect one other item. A business case.
There are a few things to look out for when producing a business case for funding, things that may seem small but can more often than not lead to an application being accepted, or being rejected.
However, you can do your best to take the ambiguity and nerves out of the situation and improve your chances by considering a few important factors.
Why do you Need a Business Case?
Before getting to how to write a business case for funding, it would be prudent to discuss the why. Its main purpose is to allow potential investors/lenders to clearly understand what they would be putting their money behind. As a way to assure them that your business model would represent a viable and sustainable investment opportunity.
A business case acts as a great way to show outside parties your vision and plan in order to convince them of its merits, but it can also be important for you. A clear, concise, well-executed business case can act as a plan for your future, a blueprint to success.
Before debating how to write a business case for funding, the first thing you need to consider, before typing out a single word, is why you are doing it. Work out the justification first to set yourself on the path to success. Five reasons for doing a business case are:
- To minimise the margin of error – Preparing a business case for funding is the perfect time to take stock of your plans and goals for the future. Developing a business case can help make clearer where you may have made mistakes in the early days that, should they not be corrected, could prove catastrophic down the road.
- Develop a clear plan of action – When ‘starting up’, it is pivotal that you establish goals and set business priorities early into the process. The sooner you address fundamental aspects of the future of your business the sooner you can set it up to prosper.
- Make sure everybody is on the same page – It’s exceedingly rare for a business to start up with only one person at the helm. More often than not, even if there is only one founder, they will have a host of advisers involved in the process. Make sure everybody in your boat is rowing in the right direction as soon as possible.
- To take a step back – Much like with a lot of aspects of life, if you pour everything into a business, you may struggle to show the objectivity needed to succeed. Strip the emotion out of your business and set yourself up for future success.
- Secure funds – To raise capital you will need to very clearly communicate your vision so that any potential investors or lenders can get on board without worrying.
How to Write a Business Case for Funding
Remember that the quality of your business case will likely play an important role in whether or not your application is given the green light, and thus its future success, but try not to be intimidated.
The key to a successful business case for funding, much like with most aspects of business, is to plan and prepare. But what do you need to consider?
Advantages
In this section you need to outline the advantages and benefits that will come from your project being approved to go forward. Discuss how funding could benefit the project, how it could be used, and how it would in time generate further revenue.
Risks
Instinct might tell you to not dwell on the disadvantages and risks that will come with your proposal. However, you need to be transparent and upfront at all times. This shows lenders and funding managers that you have done the work and considered any possible problems that could arise, and will make clear that you are a trustworthy and reliable applicant.
Solutions
You will want to make clear what you can do that will enable you to achieve your goals, how you will be able to tackle and overcome any problems that could arise, and what you will do to operate without coming across any of these stumbling blocks in the first place.
Justification
The justification is likely the most self-explanatory section. The goal of this part is, quite simply, to justify your decision to formulate your proposal. Why you need the additional funding, how it can help you, and how much more can be made.
Required Funding
Before ever approving any request, lenders will require a figure of the amount of capital your business/project will require in order to fulfil its aims.
What Should a Business Case Include?
There is no set template for how you need to present your business case. Each scenario will be different so it would likely depend on your particular strategy. However, there are certain aspects that each business case should include if you want to maximise your chance of success.
These are:
- Executive Summary – This acts as a more brief, concise summary. This section should succinctly get across key information regarding the business for anybody to get a quick, broad idea.
- Project Description – What may end up being the bulkiest section of your business case. The project description is for you to go into more detail on your core idea. This section should include a mission statement, background information for context, objectives, and more.
- Financial Appraisal – The finance section of a business case is primarily used to assess potential cash flow, ensure affordability, show market research etc.
- Business hierarchy – This section should act as a clear way to show the company’s management structure. Include each person in a management position and detail their role, their responsibilities, and their acumen. The business hierarchy section within your business case can also be used to detail the chain of decision-making. Who makes what decisions and who has final say.
How Inquesta can Help With Business Funding
If you’re looking to write a business case for funding, seeking out the right expert assistance could be pivotal. This is where Inquesta can help.
We have years of experience assisting companies from all industry sectors to prepare the perfect business case.
In business, the most important thing is hard work, and this is why working with us guarantees you an independent arbitrator who will pair experience and technical know-how with an unmatched work ethic to make your business case the best it can possibly be.
Over the years, Inquesta has formed working relationships with specialist corporate finance partners who are dedicated to helping business owners access the right form of funding for them. We especially recommend Business Finance House, who themselves have decades of experience. From asset financing and business restructuring funding, to growth financing and cash flow support, they have everything you need under one roof.
For more information on how we can help, request a free consultation today or contact a member of our team.