4 Frequently Asked Questions About Financing a Business
If you’re applying to receive funding from an organization, there are several things funders would like to know. After all, they will be parting with their money, so they would want to make sure that you have a sound plan, one that you will carry through from start to finish.
If you’re unprepared, it’s likely that you may be turned down which is not what you want. It means going somewhere else will likely end with the same result. Here are some things that funders would like to know.
1. Does Your Idea Make Sense?
You want your project to fit in with their criteria. If you submitted your idea to a potential funder and after reading it, they must be able to understand and it must make good sense to them. You need to explain how your project fits in with your own mission statement and why you’re even involved with this particular project. If they feel that you have access to finances, they’d question why you’re looking for their backing.
2. What Impact Will It Have On The Community?
The idea you bring to the table must have good value for money. Try to explain how your project will have a positive impact on the community. Does your project have a legitimate need in the community? You need to make the funders understand who will benefit from your idea and if the benefits to the community are short-term or ongoing.
3. Is There A Need For ThIs Project?
Funders may question why there is a need for your idea. You’ll have to fully explain why you think there’s a need right now and if possible, offer examples. If you have no examples, at least be prepared with hypothetical situations to help explain the need for your idea. Funders may want to know if their investment in your project will save money in the long haul and if the idea, once implemented can support itself down the road.
4. Can We Trust Them?
Earning a funder’s trust will be hard work. If, in the past, you had a previous project that you did not see through and it came to light, it will be very difficult. They may want to know if you’ve received money elsewhere as well. You also need to convince them that you have the necessary skills and expertise available for the project. Explain how you’ve accurately researched for your budget. You may also be wise to prepare for a Plan B, just in case. If you’ve gathered some support from the community and can prove that you have, that will be a strong point in your favour.