Building a business plan

Once you have a vision for your small business, it is important to start building your business plan. A business plan is helpful for allowing your business to gain the necessary funding to get started. Here are some tips that can help you build your business plan:

Tip # 1 - Executive Summary

The executive summary is one of the most important aspects of your business plan. It must clearly define what type of business you are going to run, the people that are interested in your products, and how you plan to stay in business for a long time. The executive summary must be engaging, but it should not be too long. Some lenders will only look at the executive summary to make their decision while others will simply skim over it and look at the rest of your business plan.

Tip # 2 - Format

In order to build your business plan, you need to develop the format of what will go into your business plan. First, start with the entity of your business. Are you going to operate as an LLC, S-Corporation, or partnership? Clearly define what type of business you plan on running and then move onto the rest of your business plan.

Next, describe your marketing plan. The marketing plan must show the lenders how you plan to inform your customers about your products and how you can actually make money. You must also define your target audience and explain if your consumers will continue needing your products for a set number of years. Part of the marketing strategy must include information about your target market and your sales forecast. The bank will want to see when you expect your sales to be at their peak and when they will be at their lowest and what you plan to do to get through the low times. Always have solid research behind your numbers to let your lender see exactly how you foretasted your sales. Use information you find from your competitors to help back some of the numbers you project.

Lenders also need to understand how you plan to run your business on a day-to-day basis. Who is going to manage the company? How large will your company be? How many employees will you need to hire? Do you have any employees that are coming in with certain skills and qualifications that can help your business? Along with the day-to-day information, you must include information about your accounts payables and receivables. Provide information about your inventory and how you plan to properly manage it so it doesn't become a waste to the company.

Tip # 3 - Funding

Once you have the basic format of the business plan written, you need to ask the lender for funding. During the section on funding your small business, you must discuss some important elements like how you plan to use the money to initially start-up your business and what you will do if you need additional money for operating expenses. Talk about a few of the different funding options you will try like a small business loan, credit cards, or lines of credit.

Tip # 4 - Final paragraph

It's important to pick out some of the highlights from your business plan and tie them together. This is your chance to make your final impression on the lender and convince them to give you the money you need to get your small business up and running. Always make sure you proofread your business plan several times to make sure it flows together properly. It's also important to check your facts to make sure everything is accurate before you submit your business plan to the lender.