Business Plan: Use of Funds
Your business plan’s financial section should include a chart showing where you intend to find the necessary funding to launch the business, the amounts from each source, and the specific uses of the capital you will raise. You must account for the use of each dollar of funding within this chart. To be convincing to funders, the uses must be complete, but not padded with unnecessary or inflated costs. The sources must also seem reasonable to readers.
Choosing Sources
The sources of your funding will depend on the type of business, the size of the investment needed, and the financial return you project. For small businesses needing only tens of thousands of dollars, venture capital funding is generally out of the question, but angel investor funding or bank loans are certainly possible. As the financial return expected increases, investors and lenders with higher tolerance for risk will become more interested.