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If you’re like many of today’s bootstrappers these days, you started your small business with an idea and a willingness to work hard. What you might not have started out with is a formal written business plan.
But when it comes time to take your business to the next level with a small business loan, you may find yourself at a disadvantage. Most lenders want to see very specific information from you before they even consider parting with funds.
Fortunately, nobody knows your business like you do. Start with these five guidelines to build a killer business plan and secure the loan you need to grow.
You’re writing a business plan to achieve a very specific purpose – to obtain a business loan. Before you ever start writing, determine exactly how much money you need and for what very specific purposes. You might need new equipment to manufacture more widgets or a few key hires to expand your sales force. Keeping this key piece of insight in mind will inform the way you write the rest of the business plan.
Write a succinct but extremely thorough description of your business. What do you do? How do you make money? Who are the key players? Who are your customers? How do you reach them? Who are your competitors and why should a lender fund you rather than back them? This key information gives your potential lender insight into the inner workings of your business and will go into your business plan’s vital “Executive Summary.”
Your potential lender wants to know why they should invest in you and, most importantly of all, how you plan to pay them back. Use your business plan to explain how you generate revenue now and how an infusion of small business funding will either help you expand those revenue sources are generate whole new sources of revenue.
Your potential small business lender will pay close attention here, so back this information up with facts, statistics and even charts and graphs.
This is where you get to go into detail about who your customers are and how you reach them. You’ll also go into detail about your competitors and how you plan to handle any threats to your business. Describe your sale and marketing plan and how your business is different from other businesses like it. You can even list any awards or significant achievements here, though be sure to keep your language concise and to the point with no hyperbole or sales-speak.
Once you’ve gathered all this information, it’s time to wrangle it into business plan format. While all business plans are slightly different, there are many business plan templates out there that are free for your use. There’s even an app for that: Enloop will also help you write your business plan and even provide assistance. Finally, don’t be afraid to ask colleagues who have successfully received funding to view their business plans. Even business plans from other industries may give you ideas and insight when it comes to informing potential lenders about the key details of your business.
We think you’ll find that not only will writing a business plan help you achieve a small business loan, it will also help you understand more about your business as it is now. Good luck writing a business plan. You’re in for a journey, but it should reap a huge reward when it comes to business growth!