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Saturday, January 14, 2017

By Christine Jackson


Some of the excellent ideas in the world fail to be actualized due to capital shortage. Individuals and businesses may have part of the funds but some require 100 percent project funding in different circumstances. The capital comes from organizations and individuals who need profit, meaning that it is not free for all. As such, you need a compelling and captivating proposal that will win the attention of potential investors.

Third party investors give different conditions whenever they fund a proposal. These conditions affect the business model or capital structure of your venture. The condition may also be tied to future cash flow until the invested amount is recouped. This means that you cede equity or have to repay the loan at an agreed interest rate. The rates are usually lower or more favorable than commercial banks.

There are common reasons why projects are not funded according to the expectations of proprietors. If your proposal does not convince the capital owner that you understand the problem, it will be declined. Where the solution is unbelievable, you will also get a regret. Lack of sufficient expertise to implement the project will also affect funding confidence. Financiers also decline if budgets are inflated or do not add up.

What should you consider when writing your proposal? Remember that the proposal is your ambassador before the decision maker or panel. It must be clean, crisp and accurate. It must also make an impression and persuade the panel to see your side of story. Make a request to get the money other than showing arrogance. Always promise what you can deliver and include a detailed plan of the benefits the financier will get.

A lot of vetting takes place before proposals are approved. During vetting numerous proposals are discarded. One of the reasons for getting a regret despite having an excellent idea is failure to follow procedure or instructions. These instructions include sticking to the submission deadline, omitting crucial sections, falling short of words, failure to include financial statements, etc. Failure to meet basic requirements will lead to immediate dismissal.

It helps to have a simple, precise and accurate proposal. Financiers and organizations have thousands of proposals to consider. They need a quick overview, accurate figures and precise presentation. Any meaningless sentences and words should be eliminated from your proposal. An executive summary is required to provide an overview of your idea. While providing the summary, do not leave out crucial details since this will lead to disqualification.

Figures are very important to financiers and investors. These individuals and organizations want to ensure that their money is safe and will bring profit. They therefore conduct thorough research before financing any project. Should they feel that your proposal is weak in terms of figures, they will decline to fund. As such, give the correct market margins, understand your competition and make realistic market projections.

A lot of funding organizations are strict on time. They open the window for individuals to send proposals and close it within a short time. Know when to send your proposal and how long you should wait for a reply. The proposal must be properly structured, dated and submitted on time. Your intentions, contributions and request must also be well articulated.




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