This is a 4 part blog series that’s designed to educate entrepreneurs and small business owners on how to develop a business plan according to the average lender’s standards. Developing a business plan that meets lender standards will contribute to getting your loan request approved. This is part one of the blog series.
Developing a great business plan is an important part of the business building process, especially if you just starting out. If you find yourself in need of a small business loan to start or grow your business, you’ll want to start working on your business plan. Many lenders require the submission of a business plan when submitting a loan application. If you’re not sure how to write a business plan, you could do one of two things:
- Hire an expert – Hiring an expert can work well if you plan on working closely with them doing the business plan development process. You should never let an expert work on your business plan alone, after all it is your business plan. The best experts will be able to show you samples of business plans they have written in the past and provide recommendations. If you’re trying to raise capital with the help of the business plan, you’ll want to make sure any expert you hire can provide you with proof that they’ve helped someone in your industry get approved for a small business financing using a business plan that they helped develop.
- Learn how to do it yourself – It may seem like learning how to write a business plan yourself will take a lot of time but it won’t. Writing a business plan can be very simple; you just need to follow a format. In fact, the Small Business Administration has created a standardized format for small business owners to follow when writing a business plan. I have taken their format and combined it will my own simple business plan development formula. A formula I have developed over the past 5 years writing over 100 business plans for small business owners who were applying for small business loan up to $50,000 or more.
This blog is meant to help you learn how to do it yourself. As I mentioned before, I have developed my own simple formula for writing a winning business plan that will get your loan approved. This formula is as follows:
- Asking the Right Questions (and Getting the Right Answers) – As a business plan writer, I would ask small business owners specific questions about their business and weave their answers into the business plan where they fit. Knowing what questions need to be answered to write your business plan is critical. I came up with the questions for the development of the business plan based on the recommended Small Business Administration format.
- Using the Right Research Sources – The internet is full of inaccurate and unreliable sources of information. Therefore it is important to know what sources to use to develop your business plan. You’ll need to do research on your industry and target market (lenders will want to know everything about the growth and state of your industry as well as the size of your target market). So knowing which sources are solid and reliable is critical. You wouldn’t want to put inaccurate information into a business plan; it could get your small business loan request denied. The lender may notice the inaccuracy and point it out.
- Structure and Setup – All business plans have multiple sections of information and each section tells the lender a story and gives them a complete picture of how your business operates. The structure of that information is important. Your business plan has to be setup in a way that makes the information flow from one section to another. This makes the information easier for the reader to digest.
Now that I have given you the basic formula for writing a winning business plan, I am going to help you apply it. In the 2nd part of this series I will discuss part one the formula which is “Asking the Right Questions and Getting the Right Answers”. You’ll need to know what questions to answer to write a winning business plan that will get your small business loan request approved. Stay Tuned!