Build a use-of-funds plan
Turn a funding request into a specific spending plan that explains exactly where the money goes, why each use matters, what evidence supports the cost, and what happens if less money is available.
What you will leave with
- A line-by-line spending plan instead of a rounded funding request
- Clear separation between setup costs, recurring costs, and working capital
- A priority order that protects the most important business outcome
- A smaller viable plan if the full amount is not available
Step 01
Start with one operating result
A use-of-funds plan should begin with what the business needs to accomplish, not with a shopping list.
Examples include increasing monthly production capacity, keeping enough stock for a proven sales cycle, replacing equipment that causes repeated downtime, or opening a service point after location demand has been validated.
Write the result in measurable operational terms where possible. 'Buy equipment' is an activity. 'Reduce outsourced production delays so we can handle the current order volume internally' explains the business reason.
- Constraint to remove.
- Customer demand supported.
- Capacity or reliability gained.
- Time or cost impact.
Step 02
List every planned use separately
Breaking the request into line items makes missing costs and inflated assumptions easier to see.
Create separate lines for equipment, inventory, deposits, transport, installation, training, licences or professional services where applicable, launch marketing, working capital, and contingency. Do not hide several unrelated expenses inside one large category.
For each line, include quantity, unit cost, total, source of the estimate, and expected purchase timing.
- Item or purpose.
- Quantity.
- Unit and total cost.
- Evidence source.
- Expected timing.
Step 03
Use current evidence for costs
A plan built from old internet prices or rough memory can become underfunded before the project starts.
Use current supplier quotations, recent invoices, written service estimates, rent terms, shipping estimates, or other credible evidence. Where prices are volatile, record the date and add a reasonable contingency instead of pretending the number is fixed.
If you use an estimate rather than a quote, label it honestly and explain the assumption.
- Supplier quote or recent invoice.
- Date of the evidence.
- Delivery and setup cost.
- Contingency for uncertain items.
Step 04
Separate one-time costs from recurring costs
Buying an asset can create future costs that the initial funding request does not cover.
A machine may require maintenance, power, consumables, training, insurance, replacement parts, or staff. A new shop may require monthly rent, utilities, security, staff, and restocking after the opening setup.
Show which costs happen once and which continue. Then confirm that normal operating cash flow can support the recurring part after the funding is spent.
- One-time setup.
- Monthly or per-cycle operating cost.
- Maintenance and replacement.
- Staff or support cost.
Step 05
Include working capital explicitly
A project can fail even after the equipment or stock is purchased if there is no cash left to operate the next cycle.
Estimate the cash needed between paying suppliers and receiving customer money. Include inputs, transport, wages or helper costs, utilities, packaging, and other costs that must be paid before revenue arrives.
Do not use the entire request on fixed assets if the business then has no money to turn those assets into sales.
- Supplier payments.
- Production or service inputs.
- Transport and delivery.
- Staff or labour.
- Timing until customer cash arrives.
Step 06
Prioritise essential, useful, and deferrable items
A priority order helps if the final funding amount is smaller than requested.
Mark items as essential now, useful after the core plan works, or deferrable. Ask whether an item can be rented, leased, borrowed, bought used where appropriate, outsourced, or purchased later from sales.
This also reveals requests padded with purchases that look impressive but do not solve the main business constraint.
- Essential to the operating result.
- Useful but not required immediately.
- Can be rented or outsourced.
- Can wait for normal business cash.
Step 07
Build a smaller viable version
A strong plan should show what the business can do if only part of the requested amount becomes available.
For example, instead of equipping three service teams immediately, the business might equip one team, prove utilisation, and fund the next team from operating results. Instead of buying six months of stock, it might buy one tested sales cycle.
The smaller plan should still produce a useful result; simply cutting every line by the same percentage may make the project unworkable.
- Minimum useful scale.
- Essential items preserved.
- Later phases identified.
- Milestone before the next expansion.
Step 08
Connect each spend to a measurement
You should know how you will tell whether the money improved the business.
Measures can include orders completed, units sold, turnaround time, stock-outs reduced, production capacity used, gross contribution, repeat demand, or downtime reduced. Choose measures that fit the purpose of the spending.
Do not promise guaranteed revenue simply because money is spent. Track actual results and revise the plan if the expected improvement does not appear.
- Operational measure.
- Sales or demand measure.
- Cost or efficiency measure.
- Review date.
Step 09
Plan the release and control of funds
A spending plan also needs basic controls so money is not diverted casually.
For a larger request, decide who approves purchases, what evidence is kept, whether payments should be staged, and how supplier changes are documented. Keep funding money distinguishable from unrelated personal spending.
Where a provider restricts how funds can be used, follow the actual agreement and keep the records required by that provider.
- Purchase approval.
- Supplier evidence.
- Payment record.
- Change documentation.
- Provider-specific restrictions.
Step 10
Add a realistic contingency
A contingency protects the plan from normal uncertainty, but it should not become unexplained extra money.
Use a contingency for genuinely uncertain costs such as transport changes, installation adjustments, small replacement items, or price movement. Explain what it is for and avoid making it so large that the plan loses discipline.
If a major risk is too uncertain to estimate, resolve that uncertainty before committing rather than hiding it inside a large contingency line.
- Known uncertain costs.
- Reasonable buffer.
- Clear permitted use.
- Separate major unresolved risks.
Step 11
Use LaunchBOS records to keep the plan grounded
A use-of-funds plan should reflect what the business actually spends and sells.
Review current expenses, catalogue costs, invoices, payments, and Business Health before finalising the request. After funding is received, record actual business expenses so you can compare the plan with what was spent.
LaunchBOS is not a funding-disbursement system. It can help organise the operating evidence and actual expense history around the plan.
- Review existing expenses.
- Compare supplier costs with current operations.
- Record funded business expenses.
- Review whether the expected operating result appears.
Funding → current position
Compare the plan with what the business is already doing.
LaunchBOS does not manage funding applications or forecasts. Use Business Health to review current recorded income, payments, expenses, and operating signals before deciding what the business can support.