If you’re looking for a start up business loan, it goes without saying that you will need to write a convincing business plan. Even for an existing business much of your business plan relies on the assumptions you make, but what is the key thing you need to put in a business plan if you are looking for a start up business loan?
The answer is simple – ‘How?’
The word ‘how?’ forces you to think about all the strategic, operational, tactical, human and financial aspects of your business. It will require research and investigate who your customers are, what markets you operate in, and who is your competition. It will require you to be creative in thinking through what it is you are offering and why someone should choose your products or services over those offered by others.
Some of the ‘How? questions you need to answer are:
- How will your business work?
- How will your financial targets be met?
- How will you reach your customers, with what type of message and which channel or media will you use?
- How your products will be made and shipped or how and where will your service will be provided?
- How you will ensure the quality of your product or service?
- How will you ensure you are meeting your customer’s needs?
- How and when you might make a profit? ‘How?’ will require you to forecast sales and expenses.
- How will you have enough cash to continue to operate and grow your business?
- How do you plan to exit the business at the end?
Until you are clear about the ‘How?’ in your business, you not be able to convince others that your business will work, and that it will meet the financial targets you have set. More importantly, you will not really be clear about how much you need, and exactly how you are planning on raising this investment. Bear in mind that potential investors will need to know how much you are investing yourself.
How detailed does your business plan need to be if you are looking for start up business loans? It needs to be robust enough to stand up to scrutiny from the investors you approach, but this does not necessarily mean it needs to be long. For example, if you are good at presentations, this approach is an innovative and effective way to produce a business plan for a start up business loan.
Hopefully this has given you some food for thought, and the good news is that if your business has already started, and you need a Start Up Business loan for some exciting expansion, lots of your ‘How?’ questions will already be answered by your business’s track record. Good luck with your business plan!