IF YOU ask people who are in the process of starting up their own businesses what their main concerns are, obtaining finance is likely to rank high in the list of answers.

In fact, having the right quality of management should probably rate even more highly, but we'll leave that one for later consideration.

Why, then, the preoccupation with finance and the perception that there's not much money available for small businesses and that, in any case, it's difficult to access?

To persuade someone to put money into your business you need to be able to convince them that you have a product or service that people will want to buy; that you understand how to get into the marketplace; and that you can run your business so that you earn more money than you spend.

The usual way of setting out this proposition is in a business plan that covers each important aspect of the company's operations and answers all the questions that a potential investor might want to ask.

Without a business plan, or with an inadequate one, it's not surprising that people will be reluctant to invest in the business.

Importantly, if there isn't a business plan it may well be that the management in the business also lacks clarity in its own view of where the company is going. All this places great emphasis on producing a robust and convincing business plan that will allow potential investors and lenders to have confidence that their money is being committed wisely.

There is a substantial amount of advice available from many different sources on the preparation of business plans and yet most of the ones that I see are significantly deficient in some key aspects and this, of course, greatly weakens the case for obtaining finance.

In looking at science and technology-based business plans for HSBC, I evaluate eight different components:

How well will the product work?

What's special about it in relation to the competition?

How strong is demand in the market place?

Is the timing right for a market entry?

How long is the product likely to remain competitive?

Is it a single product or does the business have other strings to its bow?

How strong is the management team?

Does the business have intellectual property that can be protected?

Other aspects of the business plan will also be considered, but you can see that it's possible to build up an objective assessment of the strength of the business by going through this process - provided that the business plan adequately covers all the relevant components.

This brings me back to the opening question: Is it really difficult to raise money for early stage businesses or is it simply that people are often unable to make an adequately convincing case that can be presented through their business plan?

There are now probably more opportunities for raising finance from public and private sector organisations than ever before, ranging all the way from very early stage 'proof of principle' finance right through to multi-million pound investments from venture capitalists.

And there's little excuse for not knowing where to find the money, either!

Websites such as those of Connect Yorkshire (http://www.connectyorkshire.org/) Business Link York and North Yorkshire (www.here4business.co.uk/) and Science City York (http://www.sciencecityyork.org.uk/businessdevelopment/funding.html) provide detailed information on the help that can be obtained and who provides different types of funding.

So, before lamenting the lack of funding opportunities, do make sure that the business plan does its job of explaining how the business is going to work and why it is a sensible proposition for investment.

In that way, the likelihood of finding money is bound to be substantially enhanced.

Updated: 10:59 Wednesday, July 06, 2005