The best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support is to show them a great business plan. Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen. Your business plan is like your calling card, it will get you in the door where you’ll have to convince investors and loan officers that you can put your plan into action.
Once you have raised the money to start or expand your business, your plan will serve as a road map for your business. It is not a static document that you write once and put away. You will reference it often, making sure you stay focused and on track, and meet milestones. It will change and develop as your business evolves.
Do I Need a Business Plan?
Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. If you are seeking funding from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and contains sound business reasoning.
If you are approaching a banker for a loan for a start-up business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.
Reasons for writing a business plan include:
- Support a loan application
- Raise equity funding
- Define and fix objectives and programs to achieve those objectives
- Create regular business review and course correction
- Define a new business
- Define agreements between partners
- Set a value on a business for sale or legal purposes
- Evaluate a new product line, promotion, or expansion
Read the following articles:
- How to Write a Business Plan?
- Is a Business Plan Really Necessary?
- Do You REALLY Need to Prepare a Business Plan?
>> RELATED: Free Sample Business Plans
What’s in a Business Plan?
A business plan should prove that your business will generate enough revenue to cover your expenses and make a satisfactory return for bankers or investors.
- Executive Summary–features the highlights of your plan and sells your idea in two pages or less.
- Company Summary–a factual description of your company, ownership, and history.
- Products (or Services or both)–describes your products and/or services and how they stand out from competitive products and services.
- Market Analysis-provides a summary of your typical customers, competitive landscape, market size, and expected market growth.
- Strategy and Implementation-describes how you will sell your product, how you will put your plan into action, and establishes milestones.
- Management Summary-provides background on the management team, their experiences, and key accomplishments.
- Financial Plan-contains key financials including sales, cash flow, and profits.
Read the following articles:
- How to Write a Winning Business Plan
- How to Create a Killer Business Plan
- Customer Analysis in Your Business Plan
- Common Elements of Business Plans
What Makes a Successful Business Plan?
Here are the common elements of a successful business plan:
- A well thought out idea
- Clear and concise writing
- A clear and logical structure
- Illustrates management’s ability to make the business a success
- Shows profitability
Read the following articles:
How Do You Write a Business Plan?
Sitting down looking at a blank computer screen as you prepare to start your business plan can be daunting. You may want to look at some alternatives that will make the process a bit easier.
Hire a Professional
A professional consultant will create the business plan for you, but you still have to be prepared to think through your business and understand the underlying concepts in your business idea. You will have to work closely with the consultant to ensure that he or she develops a good plan that accurately represents your business or business idea. You can find a list of business planning consultants at www.planconsultants.com.
Check Sample Business Plans
If you are writing a business plan, oftentimes it helps to see a completed plan. Here is a list of sample business plans that are available on the Web for free. Check out our comprehensive list of Free Sample Business Plans
Buy a Book
There are many good books on the market that will help you to understand what needs to go into a good business plan. You can read the following books:
- “How To Write Your First Business Plan” (First Timer’s Guide)
- The Right-Brain Business Plan: A Creative, Visual Map for Success
- Successful Business Plan: Secrets & Strategies (Successful Business Plan Secrets and Strategies)
- Writing Winning Business Plans: How to Prepare a Business Plan that Investors Will Want to Read and Invest In (Rich Dad Advisors)
- Writing a Convincing Business Plan (Barron’s Writing a Convincing Business Plan)
- The Plan-As-You-Go Business Plan
Use Business Planning Software
A good business planning software package will provide you with an outline for a well-developed, objective-based and professional business plan. Software packages will remove the problem of starting from scratch by structuring your plan for you. The software should ask you the right questions that will pull out the most important underlying concepts within your business idea.
Recommended Books and Products on Business Plans:
- Pros and Cons of Financing a Business
- Myths and Realities of Business Plans
- How to Raise Money to Finance a Franchise
- Why Business Plans Fail
- Do You Need a Business Plan?