How Much Money Should My Business Plan Funding Request Ask For?

The dream of most business owners in Nigeria is to raise enough or even more than enough money to expand their business. Even startup businesses are not left out either, almost everyone needs to raise money from a business plan.

In this article we would like to address the issue of what and why making the right funding request will positively affect your chances of getting funded with your business plan submission. If you are looking to get funded and don’t want to make some avoidable mistakes, we shall answer these questions together.

Are Business Plans compulsory for Successful Business Funding?

There is no guarantee that writing and submitting a business plan will lead to successful funding. Even if you are the world’s best business plan writer and you have achieved many successes in the past.

Meaning that no matter how brilliant and great your business plan is, you may not get the money you want but the lack of or absence of a business plan is far worse. You are not likely to get funded without one either.

How much money is the right amount to ask for in a Business Plan?

That said, let’s assume you now prefer writing a business plan as a step towards attracting funding for your business, how much do you think is reasonable amount to ask for besides your initial projection?

Take it from me, ask for an amount that will ensure the business can start successfully and still has a few more thousands or hundreds of thousands of naira to spare. In the event of failing working capital, every little change you can squeeze out is worth it and they can be sorted with the extra money you asked for.

There is also the risk that the exact amount of money you ask for is insufficient because of unexpected changes in prices or even terms of contracts you may have with contractors and suppliers involved in your business set up. Therefore ask for 10 to 20% more of the total startup amount as contingency cost.  

Don’t be greedy and dishonest when making your funding request

But in as much as you need to ask for more than you actually need, don’t fall for the greedy, dishonest and self-destructive tendency by some business owners to ask for far more than they really need because the investors or banks may embarrass you with tough questions about why you need a particular amount. When you fail to justify it, you could lose your credibility for it.  

Therefore your funding request should be very realistic and not too much for the financiers to foot. If you ask for more than they (financiers) can afford, you may not get funded. That means you should wisely ask for more than you need but not too much and never ask for less than you need.

3 Good Examples of Successful Business Startup funding requests made through Business Plans

I will use the following examples from some of my clients who made funding requests with their business plans and eventually got funded;

First client initially wanted to raise 10 million to set up her crèche but after going over the business requirements, we reviewed it upwards to 13.7 million and she got the amount she requested for. She included more items she could justify and made a contingency request of 1.3 million naira.

Second client initially proposed 3 million naira for a pharmacy. I suggested an increase of 2 million naira based on other expenses I forecasted and the client got funded because he could justify the additional costs plus the financial projections could not have been realized if the business was underfunded

Third client presented his plan to a group of investors. Initially he proposed 50 million naira for his hospital. After looking at his business goals and target market, we realized he would have been underfunded and therefore needed more equipment, costing and larger space for his hospital. The amount was reviewed upwards to 75 million naira and as at the time of this writing, the investors had agreed to fund it.

In all cases I insisted on the client asking for more than they initially requested for since we realized failing to do so will make them underfunded.

Final thoughts on making the right funding request

So I will like to conclude by saying, if you make a very small request because you are hoping to not drive away interest in your business or because you are not sure if you would be asking for too much, let me say this “if you prove that your business opportunity can work, then funding is not the main challenge”. If on the other hand you ask for too much whether the business opportunity is profitable or not, you will not get funded. The way out is to adequately gauge who you are pitching your business to. Can they afford the base amount you need? If yes, then add 10 to 30% additional costing to your base startup capital to cover unexpected and emergency expenses.

If you are looking to get funded for your new business and need a detailed and professionally written business plan that will guide you in making adequate funding request, then you should get in touch with me via email: paulonwueme@gmail.com or call: 0803 206 4106

Business Plan Software, Sample Business Plan or Professional Business Plan Writer?

 If you need a business plan to present to investors to raise capital or loans to fund your business which of these three options should you go for? 

Many times people looking for business plans especially here in Nigeria have a tendency to go online to download a sample business plan format to guide them in writing a business plan. Along the line they discover two problems namely; that those online business plans are written for businesses in other countries and do not have realistic or comparable factors which would make them viable in Nigeria. The other problem is that a sample business plan may still have to be edited or discarded off entirely when it doesn’t seem to make sense at least in the Nigerian context and/or suit the particular business opportunity you have in mind. On the other hand, one may be tempted to buy business plan software which would provide one with fill in the blank options or one that is already written as part of a collection of business plans for sale.

Really the choice of which option you should go for would depend on your situation and what is at stake for you when preparing the business plan and I’ll explain this shortly.

Buying a do it yourself business plan software

You can actually order for a ready-made business plan online at various places but I’ll recommend live plan to anyone looking for a business plan software from a reputable business plan writing company. There are many other places to order for a ready-made business plan but I won’t be mentioning them in this post.

Advantages of buying a ready-made business plan

• It’s cheaper than hiring a professional business plan writer as it usually comes at a fraction of the professional’s fee sometimes as low as $10
• It is faster because you can have it prepared in less than 48 hours which is almost impossible if you contact a professional business plan writer to prepare one for you.
• You are directly involved in its preparation because you’ll do the editing, presentation etc yourself

Disadvantages of buying and using a ready-made business plan

• The format may not be suitable for your intended/targeted lender or investor. The bank or investor who looks at your business plan may have specific things he’s interested in e.g working capital turnover or payback plan which your ready-made business plan may not have answers to
• The scope of the business plan may be limited and may not reflect the current situation of your business, the market analysis may need to change because market trends are not constant but change with time. It’s like buying a Nokia 3310 and still expecting it to function like iphone 6. The sample business plan can be likened to the Nokia phone in terms of being outdated or not complete for present day mobile phone usage.

Download and Edit a free sample business plan or business Plan format/template

There are many sample business plan formats available for download online. Some of these business plans have formats that are not suitable for use in certain countries because they are designed to fit into the overall economic situations of their respective countries. For instance a business plan sample on supermarket business from bplans.com will specify locations in the US, target markets specifically showing how potential customers shop (which is a lifestyle issue) and costing in US dollar whereas someone living in say Nigeria in search of a business plan sample sees this business plan, downloads it and edits it removing anything suggesting US without considering the difficulty in adapting realistic assumptions that fits the Nigerian business climate into the downloaded business plan. In other words you have picked up a Toyota vehicle, removed its engine and replaced it with that of a Volkswagen and expect the car to function optimally without any awkward hitches.

Advantages of downloading a business plan sample

• It saves you time because you don’t have to do hard time consuming research
• You have a standard template to work with which would improve your business plan presentation
• It is inexpensive compared to either hiring a business plan writer or buying a ready-made business plan because you get it absolutely free of charge

Disadvantages of downloading a business plan sample 

• Since business plans are not a one size fits all document it follows that a downloaded and edited business plan sample will not provide ample details on the particular business opportunity you’re presenting the business plan for
• They are not sufficiently suitable for your business venture and the opportunity it stands for

Hire a Business Plan Expert to write you a New Business Plan from Scratch

This is the least preferred option by most people because it entails entrusting your business idea to another person who you are not sure won’t go into the business you are about venturing into or possibly sell your idea to another person - although there are ways to overcome this when you come in contact with the right business plan writer. Secondly you have to pay a hefty fee and the chances of you getting exactly what you want can only be guaranteed by the professional’s proven competence which will either be based on a referral or by the claims made by the business plan writer. Thirdly this option is suitable for people who don’t have time to write the business plan themselves, can’t write it even if they had enough time and/or prefer to have a professional write the business plan especially if you are going to present it to a distinguished panel of investors or a bank with very strict standards.

Advantages of hiring a business plan writer

• The business plan will be customized to your own particular business needs as the business plan writer will seek your input either by oral or written interview and your responses will guide his/her write up
• The business plan will be more professionally written than downloading and editing a sample and is more likely also to be better than a ready-made business plan purchased online
• A professionally written business plan usually has greater impact than a copy and paste business plan sample simply because the uniqueness, viability and the growth potentials of the business opportunity will speak out through the business plan
• A professionally written business plan is usually more realistic than other options because business plan writers work with realistic assumptions and calculations when forecasting and projecting financial details
• It is less Stressful to you because all you do is pay for a service and make needed input by way of feedback you don’t write anything or have to stress yourself doing research and calculations.

Disadvantages of hiring a business plan writer

• It will cost you more money because you have to spend higher than the other two options but then it often proves to be worthwhile – when you hire the right business plan writer.
• The business plan takes longer time to complete: because the business plan writer has to research the business opportunity and do detailed write-ups, rewriting the draft, making the business plan presentations and several other tasks which takes longer time from between 5 to 14 days to complete
• You are only indirectly involved in terms of only making inputs whereas the actual writing and business plan development is not in your hands until after you receive the final draft

Final Thoughts on which business plan option you should opt for

The ball is in the court of the prospective business plan seeker your choice of which option to go for should be based on what you want to achieve with the business and how important that achievement would be to you – if you are highly motivated you are not likely to gamble with your options. Another thing to consider is your budget for the business plan, the higher the cost compared to your budget the more likely you are to pursue less expensive options. However you should be guided by whether you want to succeed or not and which option will best ensure that you succeed.

You can reach an experienced, professional business plan writer in Nigeria either by email: paulonwueme@gmail.com or call: 08032064106