How Attractive Is Your Project For Funding?
Many people who would wish to source for funding for their projects often seek for lawyers’ assistance in documenting their project. Little do they know that the lawyers do not have all the technical knowledge regarding project documentation. That is why most project proposals are rejected from ‘day one’.
Here is a step by step procedure of coming up with one of the best project and business plans for your company to access capital financing.
- Your business plan must have a brief Executive Summary
This describes your company and its mandate and highlights the main objective. It mainly summarizes your whole business plan. It should stand out and be attractive to the reader and written on not more than two pages. Most funders don’t have the time to read those 100+ pages of your business plan and are more interested in the Executive Summary because this is the face of your business.
- Company Overview
Speak for your company, who are you and what do you do? What is your mandate and objectives? To keep it attractive, what are your milestones in business so far? Many funders are interested in already existing projects; so what have you achieved so far and what is lacking? Where is the gap?
- Market Analysis
Let us assume Josephine Maize Millers is an existent company dealing in maize farming and milling. A market analysis will cover the following: Who are our clients in this case? Our clients are the Schools, the prisons among others on the local market. We are positioning ourselves to grow further by becoming a main exporter of maize to Sudan, and we know our competitors are so good at the local market. We envision becoming a major supplier to renowned food security entities like World Food Programme. Are there some MOUs you have signed with renowned food entities? Are there possibilities of more supply contracts and can you list them? What’s the cost of farming and milling? Will the pricing against the cost provide the projected profits? etc. Your plans, projections, and targets need to be realistic and achievable.
Regarding supplying the schools and prisons; what is the company’s relationship with these institutions? If it is already established, how sustainable is it? Can it stand competition and the price fluctuations? What are the tangible strengths and advantages to the company within the prevailing market?
If the plan cites having 100,000 maize out growers; how many have been contracted so far? Are the out growers contented with the contracts they have with the company? What measures has the company put in place to create confidence among the out growers to continue supplies even during some unavoidable periods of delayed availability funds?
With all these questions answered, funders will be more comfortable injecting capital in a secure and sustainable working environment.
- The Competitive Analysis
How much do you know about your sector? In this case the Agricultural sector, maize in particular vis-a-vis other foods, locally and internationally? Are you sure when the funder injects money in that product, it will pay back? How recent is the data you are using and what sources? In Uganda, you can be sure Uganda Bureau of Statistics (UNBS) provides recent data. Apart from the Websites and internet, what other sources have you used? Funders will look out for credible sources of information. Analyze your competition thoroughly and establish your position in this competitive environment. Funders are interested in knowing their competitors.
- Operations and Marketing Plan:
This should clear to the Funders. You must know how your market operates both in and out of season and how you will operate. The location of all your raw materials, as well as the outlets of all your produce, is critical to managing a cost-effective operations and marketing plan. Central to these is how and when you procure your materials, as well as the accountability measures in place?
- The Team
A technical team enables a company to fill the knowledge gap. It is important to note that funders are interested in working with professionals. So under this, clearly detail the makeup of the team (and their competences) that is to implement your project and its structure. What is the makeup of the Board of Directors (family, technocrats, etc), is it transparent? Etc
- Financial Projections
How do you develop your financial projections? Your lawyers are very important to have but they may not have the capacity to project financially? In this case, you need to justify the figures, while taking into account the Capacity of your projects. If we say Josephine Millers is projected to produce 350 MT of maize flour per day and yet the capacity of the available machinery is 120MT, how realistic are the 350MT projections? Provide strong justifications. Are the workers going to work overtime to increase output or a miracle is yet to happen? Be realistic in your projections according to your capacity.
Lastly, how specific is your information? Most planners provide general information, yet funders need to know every detail of the project in which they are yet to invest their money. No funder puts money in something they do not clearly understand. Being detailed and specific does not mean being too wordy. Detail the right information appropriately.
Content: Uganda Investment Authority