Starting a business can be one of the scariest things to do. There are many things to consider before starting a business. One of the main things that you will need is a business plan. The business plan is the road map for your business. It is the document that outlines your business, your services or product and what you expect your business to do financially. If done properly, your business plan is the lifeline of your business and the start of your road to success.
It is easy to go online and get a business plan template, but it is better to hire a professional to write your business plan. They know exactly what investors and financial institutions look for in a business plan. No one is going to give you money because they believe in you or your great idea. They give money based on if your business will be viable and profitable.
After years of writing plans for businesses seeking bank and investor funding, here is a list of what I have found that the banks actually look for in your business plan.
1. Show them a complete plan. There is nothing worse than wasting an investor or bankers time with an incomplete plan. It shows poor planning and lack of commitment on your part so why would they lend you any money? Make sure that your business plan has all the sections of at least a basic business plan. This is one of the reasons that it may be better to have a professional do the writing for you as they will make sure that everything that needs to be covered is present in your business plan.
2. Show them a realistic plan. You can't teach a CPA how to count. Meaning the people who are reviewing your business plan and/or loan application are very familiar with financials. They have experience in knowing what numbers are inflated or deflated. Make sure that when you do your financials, you are using realistic numbers and asking only for what you need. Don't try to get rich off of your business loan. Also make sure that the numbers in your financials are indicative of industry standards. Don't pad numbers or profit margins to unrealistic numbers that far exceed existing businesses in your same industry.
3. Show them your business background. Make sure to include information about your experience and business background in your business plan. Investors want to know that they are potentially lending money to someone who has business knowledge and experience in the industry for which they are starting a business. For example, no one is going to give a hairstylist money to start a daycare, but that stylist could get money to start a beauty school because of her experience in the related field. If you have business partners or a management team, make sure that they have experience in the business that you are starting and make sure to include their background information in the business plan.
4. Show them the money. When reviewing your business plans, investors want to see your financial statements. They want to see your income statement, balance sheet and cash flow. They want to see this financial information projected for at least three years but five is suggested. The reason that five years is suggested is because most successful businesses don't start to see significant profit until after the first five years.
If you need help with your business plan, don't hesitate to contact Kimestry Koaching! We offer a free initial strategy session to help you get started in getting your business organized and more profitable.
As always, if you have a specific question or topic that you would like addressed, please email kimestrykoaching@yahoo.com.
Power and success in 2014 and beyond!
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