Criteria For A Successful Business Plan: Preferences Of Different Financing Institutions

A well-developed, well-written business plan is essential for entrepreneurs approaching banks or investors for funds. However, many entrepreneurs frequently underestimate the importance of a good business plan in increasing their chances of securing finance. This study aims to provide a better understanding of the criteria that different financing institutions in Singapore look for when assessing business plans. Such information can guide entrepreneurs in preparing their business plans and targetting different financing institutions. Fourteen institutions representing venture capital firms, commercial banks, finance companies and the government participated in this study. Data were collected through questionnaires and interviews. The results indicate general emphases on organisation and management, characteristics of the entrepreneur, and background and purpose of the proposed business. There is some indication that the criteria most highly emphasised will vary, depending on the type of financing institution, and the geographical and industry specialisation of the particular institution. In general, the participating institutions adopted a conservative approach which combined judgement and intuition.