Anne-Marie Saint-John, Alva, Long Island City, NY >
It doesn’t matter whether you’ve written countless internal business planning documents in the past or none. When you apply to borrow money from a lender, be that a bank or other type of small business lending facility, you must ensure they see everything they expect when submitting your business plan with your application for financing. Failure to do this could delay your application to finance your small business, or, much worse, you could be turned down for a loan.
In this post, we have collated a list of top tips to help you write a business plan that lenders and investors will want to approve.
#1 – Never Rush Your Business Planning Process
Take your time. If you are looking to finance a start-up, you need to ensure that you take the appropriate amount of time (4 weeks minimum) to put the required work into developing and researching each individual area. A word to the wise: If you submit a business plan that has been rushed, the lenders will usually be able to spot this, and it often doesn’t give them the best impression of your business.
#2 – Do Your Research
You can hire someone to perform market research for you, or you can do it yourself. Do not underestimate the importance of getting up-to-date and relevant market research to support you on your quest of how to write a great business plan. This section will ultimately help convince a lender that you have a place in the market and that you understand the industry and the sector you wish to launch your business in.
#3 – Know Your Customers
Also known as customer demographics, working out who will buy your products and services is a crucial attribute of knowing how to write a great business plan. Only when you truly understand who your customers are can you outline exactly how you are going to take your business to market.
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#4 – If Needed, Use a Business Plan Template
I have put together a range of articles that outline the best business plan template for you to use as a framework. One of the biggest tips I can offer for anyone looking at how to write a great business plan is to ensure that you include each of the sections I highlighted in this article as a bare minimum.
#5 – Make It Professional
Whether you are researching how to write a great business plan to get investor funding or because you are looking to apply to the SBA loan program, you need to make sure you put your best foot forward, and presenting an error-free business plan is imperative. You can hire the services of a freelancer proofreading service to run through your document and help you correct any errors before you submit it.
#6 – Know Your Numbers
Financial management is a key attribute that investors will want to know you possess. Knowing your numbers and clearly displaying how you plan to use the funds will also add credibility to your business plan and subsequent loan application. If you can clearly display a well-thought-through plan with numbers that work, it will help give lenders confidence in your plan.
#7 – Always Be Honest
Whether you are outlining the competitive landscape, presenting your projections, or simply talking about your experience in the industry your business will be launched in, integrity is everything. This tip is simple and straight to the point: Always be honest.
If you incorporate each of the above tips into your planning for how to write a great business plan, you will be able to ensure that you stand the best possible chance of securing the funding you need for your small business or start-up.
What information should you include in a business plan?
When writing your business plan, leave no information out, and make sure you include each of the below sections as a minimum.
#1 – The Executive Summary
#2 – The Company Description
#3 – The Services and Products Section
#4 – The Marketing Summary
#5 – The Operational Summary
#6 – The Management and Organization Summary
#7 – The Financial Summary – including Income Statement, Balance Sheet, and Cash Flow
#8 – Appendices
We have written another article that explains exactly what information you need to include in your business plan; this can also support your planning efforts, and in a similar vein, this post about marketing a small business will come in particularly handy for section four.
Writing a business plan for a lender takes time and effort. After all, you are trying to persuade them to invest in your business and consider your ideas to be safe, supported, and with a low risk to their business. If you cannot pull together a compelling business plan that supports the pitch you make, it doesn’t matter how great your products and services are or even how profitable you expect the business to be; if you cannot accurately portray this using words and numbers, you won’t be able to secure the financing you need for your small business.