How To Write a Business Plan

Writing a Business Plan

If you have ever walked into a bank and asked for a business loan, I am sure the first thing they want to see is your business plan. The first time this happened to me I said, "What is a business plan? Do you mean do I have my idea down on paper? I kind of know what I need for money to get started." AFTER he quit laughing he explained to me that I needed a business plan. Something to show them my idea and what I forecasted my sales to be. My market analysis was also needed. Again I said, "My what? Market analysis?" 

He was very nice as he sat down and explained to me that before the bank could just hand money over to me, they needed to know what I intended to do with the money. How was I going to pay the money back? What exactly would I need to buy, what would my operating costs be for the first year, how much did I predict my sales to be in the first year and how did I arrive at those figures? Had I talked to any people? Done a market analysis of whether or not my business would even be wanted or needed in that area? What was I willing to put up front to show that I was serious about my business? Had any people had that type of business before me and how were they doing? Was the market big enough for the both of us? And so and so and so on.... 

I really wanted to get up right then and leave, but he convinced me that I wasn't a hopeless case and he would help me see it through because I really did have a good business idea. 
 

SO....What is a business plan? 

A business plan is an outline of your business idea. There are several ways to go about this but your best bet is to hire a professional. Someone who KNOWS what the bank is looking for in the way of information. If you can't afford a professional then here are some tips to help you started. 

Your Business Plan should include: 

• A synopsis of your "strategy for success". In other words, WHY do you think this is a good enough business idea for them to loan you money.
• A brief summary of your market analysis. We discussed this earlier. You need to do a little market research to find out if your business would even be needed in the community and if so by how many, percentage wise?
• A description of your product or service. The bank wants to know WHAT you will be selling.
• A description of your qualifications and the qualifications of anyone on your "team" that will prove to be an asset to your business. Let's say you want to open up a flower shop but you don't know a daisy from a carnation, BUT the person that is going to manage your shop is a horticulturist with 20 years experience in the business. THIS would be an asset that you would want to bring to the banks attention.
• Your forecasted financial information. Be realistic here. Don't go putting down that you are going to be a millionaire by the end of the first year! And be sure to list what you expect your operating costs to be. You will have utilities, lisence fees, rent space, advertising and so on.
• An estimate of how much money you think you will need and an outline of HOW you are going to spend that money. Be sure to include all start up costs and operating costs in your business plan for the first year, as it usually takes a year to get off the ground.

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