Writing a business plan is a sure way of increasing your chances of obtaining a loan. Before you begin writing your business plan, consider the following questions:
- What service or product does the business provide and what need does it fill?
- Who are the potential customers for your goods or service and why will they purchase from you?
- How will you reach your potential customers?
- Where will you get the financial resources to start your business?
Answering these questions will be the basis for writing your business plan. A good plan should have the following sections:
- Business Description
- Critical Risk
Companies that will be manufacturing goods would need a manufacturing section.
– A summary of what is in your plan
– Purpose of the loan – clearly explain what you require the loan for
– Amount needed – how much do you need to achieve your goals? Do not use estimates, choose an exact figure based on the projections of your income accounts statements
– Supply the business name, business address, investors names and the insurance number of each investor
– Business background or history
– What product will you be offering the market
– The nature of the business
– Profile of management, especially key personnel, their experience, background and skills; tell what they bring to the business
– Board of directors and other important personnel such as consultants (if any)
– Legal structure of the business – e.g., sole trader or limited liability company
– Identify your target market
– Identify your competition and say how you will compete
– What can you offer your customers that will make you unique or shine above the competition
– The size of the market
– Market trends
– Promotional plan
– Pricing information
Market research information you have gathered from your potential market should aid you with most of this.
– A projected financial statement – this will include your income statement and balance sheet
– The financial statements of all the investors, including yourself
– Collateral – What assets are you willing to put up in order to get the loan
– Potential obstacles or problems
– Estimated cost of risk
– Alternatives to dealing with potential competitor retaliation
- You should show that the business can at least meet its everyday expenses or current liabilities
- You should show that your team has the necessary experience, qualification and training to make the business successful
- You and other principals should be credit worthy