Using Your Business Plan for Obtaining Financing
In our previous post we talked about having a business plan and the many purposes it can serve. When done properly it can prove to be a valuable tool for you to help you through the different stages of your business.
Another very important use for the Business Plan is to help you obtain financing for your business. You may need start up funds, or you may already be established and want to expand. In either case you are going to have to convince your financial institution as to why they should take the chance of loaning money to your business.
You need to present the best picture possible about your business in a neat and concise written form.
Describing your business:
You begin by describing what your business is and what it offers to your customers.
Your customer base:
You need to do a market analysis to determine what type of potential consumer is applicable to what your business offers. In this phase you need to identify if yours is a business to business operation, or business to consumer. You need to have a very clear understanding of who your customers will be, and a good idea of how many potential customers will you be able to market to.
Describing your product/service:
Here you will need to be specific about exactly what your product/service is and what it offers. You need to present a compelling presentation of why your potential customers need and/or want what you have to offer.
Who are you competing against?:
You may have the best product/service in the world, but chances are you are going to be up against other companies that are offering the same as you. You need to present who your top 3 or 4 competitors are do a short comparison of them compared to your company. You need to focus on what makes your Company better.
What is your plan?:
You need to develop a marketing strategy:
Now is where you have to explain what your plans are for reaching out to your target market and how you will convert them to sales.
Producing your product/service:
Your production methods have to be described and you should include some specific details here, so the reader of your business plan has a clear understanding of your operation.
Who are the key people in your business?:
It is important that you have the proper management and staff in place to operate all the different facets of your business. This includes yourself.
Financial situation and requirements:
You want to paint the picture here of the past, present, and future circumstances of your Company. What you include depends on whether your business is already in operation, or it is just starting up. You will need to include financial projections. Also, give a outline of the funds your are needing and what purpose they will be used for.
If you have any supporting material that you can present then you should add it to this business plan. For example, brochures, catalogues, marketing materials, and even a link to your website if you have established one.
In closing you want to summarize your business in a condensed form without underplaying its potential and value, yet not overstating it or making unrealistic proposals.
Your business accountant can be instrumental in helping you complete many of the different segments of your business plan that you are hoping to use for your financial needs.