The Marketing Elements Every Business Plan Should Have To Help Secure Financing
Whatever the size of your business, it’s crucial to get your business plan right if you’re going to be successful in persuading banks to loan you money or financiers to invest in you. They need to know about your company’s mission, values and vision, as well as your financial plan.
When compiling a business plan to effectively sell your company, it is vital that you don’t neglect marketing. Why? Because the success or otherwise of your pitch is dependent on whether an investor or lender feels that you’re committed to growing your business, and whether you have the right strategy in place to achieve this aim.
Read on to find out the marketing elements your business plan should contain to persuade investors and lenders that you’re a sound prospect.
Describe your market situation clearly
The first thing a lender or financier needs to know relates to your current position. You need to address questions such as:
- What market sector are you operating in?
- At what point do you enter the market?
- Who are your target customers and what are their needs?
- Do you have a thorough understanding of your customers’ purchasing processes?
It’s vital to define your situation concisely in order to give potential investors a good indication of where you’re currently positioned.
This section of your business plan is also important in showcasing why the market needs you. This comes in the form of your:
- Brand values
- Key differentiators/selling points
This is an opportunity to impress potential lenders with your awareness of how your brand resonates with your target customers. You should be making clear to them that you think about your proposition in terms of what your customers are looking for.
Ultimately, you need to demonstrate that you’re aware of what makes you unique and why your customers care about what you offer.
Clearly define any current marketing activity
Investors need to know what you’re currently doing in terms of your marketing. So you need to be able to demonstrate that you know where your business comes from. Is it mainly referrals or trade shows, for example? Or is it more a result of your advertising or website?
If you can make clear to potential investors that you’re aware of the range and scope of the marketing tools at your disposal, and are working to maximise ROI on your marketing spend, they’ll see you as a business that is well positioned for growth.
Set out your marketing strategy for the future
It isn’t solely your current position that potential lenders and investors want to know about. They also need to understand your goals and objectives, and your strategy for growing your business in the future.
- Do you need to target new business more effectively?
- Are there opportunities to upsell your existing customers?
- Are you planning to use new platforms – perhaps social media or events – to expand your influence?
- If your brand isn’t communicating your offering in a way that connects with your target audience, what are you doing to address this?
If marketing is an area that you’ve neglected historically, don’t panic. It’s important to demonstrate the scope of your ambition, your awareness of your need to improve and the steps that you’re planning to take in order to achieve this. This will show investors and lenders that you have the drive and insight to grow your business – something they will find very attractive.
On the other hand, if you’re ahead of the curve and already have a strong brand identity that is winning you new business, you need to demonstrate that you have the infrastructure in place to drive further growth.
Include your marketing budget as part of your financial objectives
Any business plan should include financial objectives for the future. As part of this, you need to break down for potential lenders and investors how much budget you plan to allocate to marketing. There are benchmarks available to help you determining the right percentage. If you’d like advice on this I’m happy to provide advice (just give me a ring on 0800 7810247).
However, don’t be tempted to include too much detail. For example, you don’t need to detail how you plan to allocate your budget among marketing tactics.
Ultimately, your focus should be clearly explaining that you have a marketing foundation that will contribute to achieving your business growth objectives. If you’re successful in demonstrating this, lenders and financiers will feel more secure about working with you