Imagine if you were lending money to your Uncle Bob for his latest business venture.
Wouldn’t you be more likely to lend to him if he submitted a well-thought out plan showing how his business would be successful than if he just scribbled something on the back of a napkin? Lenders require a well-crafted business plan for While lenders are most interested in the financial part of your business plan, they will also want to understand more about your business’ products and services, the competition, what you will be doing with the loan proceeds, and more.
You can also predict approximately how much financing you’ll need.
If you’ll need a large amount of capital, knowing the timeline in advance can also help you save towards a down payment.
That will ensure that you qualify for the largest amount of capital and the best interest rates.
Writing a business plan lets you set and track financial goals for your business.You should be strategic about obtaining business financing.Ideally, you should apply for financing when your company’s financials are strongest.While these basic categories apply to most businesses, your plan will vary based on the type of business you have.For example, a construction company owner may spend a lot of time discussing government contract opportunities, whereas a retail shop owner may spend a lot of time discussing product line and location.This is a quick snapshot that captures the essence of your business. Figure out what sets you apart from – and makes you better than – other companies in your industry.Your company description is where you list the reasons to believe in your business’ success.It can be a powerful tool for creating achievable goals and keeping track of your progress. You might want to write this section last, after you’ve determined the overall strengths and details of your strategy, but make sure it appears first in your document. Provide a history of your company and your experience, as well as a look ahead. Describe the nature of your industry now, as well as how you see it in 3-5 years. What needs do they have that your company will satisfy?It can also help you make future decisions and measure your results. What products and services will you provide to meet those needs?Prove your business is more than just a good idea by presenting a team of individuals who bring experience, enthusiasm and credibility to the table.Also demonstrate your commitment to these people (capital and expense requirements for the next 3 years) so that potential investors get a feel for your commitment to success.