Every year thousands of businesses keep springing up all over the world; most of these new businesses are small business.
Are you thinking of setting up a new business? Or are you planning on taking your business to the next level? It’s not going to be easy because starting and growing business is a challenging task; you’ll be faced with a lot of obstacles. The first step of overcoming these obstacles is to have a plan. Every business no matter the size needs a business plan.
A business plan serves as the mainframe for your business growth, that’s not all, a good business plan will help you get external funds from lenders and investors. Sounds amazing right? Before you jump into writing a business plan, you should first understand that a bad business plan can ruin your business, this brings us to the question: what makes a good business plan?
A good business plan should outline these six things
- The current status of your business
- The business financial status
- The business capability
- The business goals and map
- The business prospects
- And the business strategy
What a great business plan does is to map out how the business plan to move from where it is into the next level.
Use of a good business plan
The fundamental use of a good business plan will help navigate the stormy business world it also comes with a bonus, with a good business plan you’ll have access to funds. The first thing banks ask business owners seeking loan is to present a business plan. The business plan goes a long way in determining whether or not the bank will grant your loan request.
This means aside from raising capital and learning business strategies; you also need to learn how to write a good business plan. A good business plan will certainly convince the loan officer that your business has potential. One feature of a good business plan is that it is simple yet detailed and arranged logically.
Here are tips on how to write a business plan for small business loans.
1)The first part of the business plan should be the executive summary; this is the most important part of the business plan, the executive summary should contain an overview of the remaining parts of the business plan, it should be brief and concise. It should summarize your goals and strategies. The executive summary should be captivating because this is what will determine if the loan officer will go ahead and read the rest of your business plan. It’s like your opening statement.
2) The second step in writing a business plan for a small business loan is to explain how far your business has come, highlight all the growth the business has witnessed, starting from when the business was set up. This should also summarize the aims and objectives of the business, as well as plans to take the business to the next level.
3) This section is key since this is where you’ll be letting the bank know what you plan to sell or already selling, you’ll describe the product or service you are selling. If the loan officer is not convinced that your product or service can compete favorably, he might have cold feet towards granting your request, so you have to be smart about this, your description should be vivid and marketable.
4) After you have successfully given an excellent description of the product you are offering; you’ll also let the bank know how you plan on marketing the product. You have to draft a good marketing strategy. The idea is to state how you plan to raise awareness for your prospective customers. Banks and other small business lenders believe the right product plus a good marketing strategy equal sales and sales means prompt loan repayment. Here you’ll give details of both your online and offline marketing strategies.
5) Your business plan should also contain a projection of what the business hopes to become. This projection should primarily contain the business financial picture in the next five years. Use your business financial history to highlight your business sales and expenses projection. It’s important that your draft is accurate and truthful, ensure that you don’t manipulate or give imaginary figures and statistics.
Outsourcing your business plan might seem easier, but it would be better if you write it yourself because it’s your business, and only you know every single detail needed for drafting an excellent business plan.