Are you a small business looking to get a business loan but are daunted at having to write a business plan for the loan application? Here are 5 simple steps to writing a better plan.
- Do your research
Research and analyze your product or service, your market and your objective. Ask yourself, will my business be viable? Is there a need for it in your market area? Who is your target audience, what are your competitors doing? How can you differentiate your company or product? All these questions will help you when creating your vision for your company.
- Keep it simple and straight forward
A business plan consists of required parts that are presented in a set arrangement, however it does not have to be written in that order. Make your key points under each heading but start with writing the section that is easiest for you and save the sections you find harder to write for last. It’s all about the planning, not the plan. Have clarity and keep it simple and concise. You do not need to create a 20 – page business plan.
- Set a realistic financial forecast
Part of a business plan is to include a financial forecast. What are your start-up costs? Will there be inventory to buy, employees and bills to pay? Keep in mind your hours of operation and any seasonality to your business that could affect your sales projection. What is the gross profit you will be making? Is it realistic that you will turn a profit within the first year? The most common mistake entrepreneurs make is over-estimating their sales.
- Don’t be afraid to ask for help
Ask for unbiased opinions on your business plan and financial forecast. Go to a local business development office for a free business consultation or ask a friend or family member to review your plan. Look at the feedback as an opportunity for growth and uncover any strategies or ideas that might bring value or clarity to your plan.
- It is not set in stone
A business plan is a living document. Once it is finalized that does not mean that it can never change. In fact, your business plan should evolve and change as your company does. In this fast- paced world your company vision and goals will change along with the current market trends. Embrace it and look forward to the changes.