Before you approach the bank or other form of financier to fund your business, there are a few things you need to be sure that you've done your research and have confidence in your Business Plan.

It's your responsibility to provide as much information as possible in his business plan, to show:

·              That your business is feasible (i.e. fulfils a need, has long-term prospects, has a competitive edge, etc)

·              That you have the knowledge, skill and passion to effectively manage the business

·              That you have some security or collateral to put into the venture, as a show of your confidence and to minimise the financier's risk

You will be more impressive if you have carefully thought-out and become familiar with your business plan (discussed later). Identify your strategy and the Unique Selling Points of your business or product.

The core elements of a good business plan

Before an investor will even consider financing your business venture, it will want to see that some thought and research has gone into your start-up idea or expansion plan.

A well-motivated business plan should provide a thorough understanding of your business, your goals and your financing needs. Then, it’s all about selling yourself and making the potential backer as excited about your idea as you are.

Some basic principles:

•           Write it yourself! Don't let someone else write your business plan for you. They don't have your vision of what you want to do, and the fact that someone else has written it it will become clear during the pitch. 
• Length: A business plan should not be long, boring or complicated. For a simple business idea, it could be between three and five pages. A more complicated plan might need 20 pages.
• Stick with the facts. Don’t waffle. Keep detailed and non-essential information out of your plan and relegate it to an attachment in the appendix.
•           Packaging is important: While a business plan is not the place to test your fledgling graphic design talents, using a nice layout and effective headings will make the document look appealing and professional.
•            Review & Editing: Remember, you only have one shot at making a good impression. Ask others for feedback. Ask someone to check your grammar and see how reader friendly it is. Make certain you proofread, proofread, and proofread. Remember that the business plan that opens doors and attracts lenders is a plan that has been revised and reviewed.

Pitching your business idea to a potential funder

Your first face-to-face meeting with a potential investor can make or break your chances of receiving financing. So first and foremost, be prepared!

A well-presented pitch will show that you have taken the time to prepare and are not only taking your business seriously, but also value your potential investor. Have a good presentation of your business plan, highlighting the most important aspects.

Then:

1. Be prepared to say why you need the money. "I just need it," doesn't inspire confidence or the fact that you have thought it through.
2. Provide some detail around how you came to the amount and how you exactly will use it to start/grow your business
3. Virtually all lenders will do a personal savings and credit check. Be prepared to discuss any prior credit issues/problems

While your enthusiasm for your idea is important, back this up with facts and research.

How you conduct yourself in the presentation is almost just as important as the pitch itself. Do you look presentable? Are you passionate about your idea, yet willing to listen to advice or comments made by a potential investor? The reality is that if an investor doesn't like you, they're not going to give you money.

Taken from the South African SME Toolkit, an information and resource website for entrepreneurs.