A business plan is required to secure funding for a business. However, most entrepreneurs see the process of writing a business plan as a monumental task, especially if they have never had to write one before. The best way to tackle something that seems impossible is to break it down into simpler steps.
How to Write a Business Plan that will increase your chances of getting a loan
- Start with a problem and solution. The first part of your business plan will be outlining what your business is about. You need to give the lenders a sense of the problem you’re solving, how the product or service fits into the market, and why you are different from your competition. This step will make up the bulk of your business plan, and the more research and detail you can go into, the better.
- Show how you will put the solution into action. The second portion of your business plan will be how you plan to execute your solution. This part is crucial, so lenders can see how you plan to achieve success in the market. This portion should include a marketing plan and a sales plan along with milestones and metrics of ways you will gauge the success of your business
- Detail the financial plan. Finally, it’s time to get down to the financial plan. Talking strategy and theory is one thing, but it can be even more intimidating when you get down to the numbers. The most important parts of this section are the forecast and the financing. It’s important to list all the ways your business will generate income, the cost it takes to do it, and any expenses you’ll encounter along the way. The financing parts of this section will explain how you will utilize any investments or loans you achieve.
Writing a business plan can feel daunting if you’ve never written one before, but it is a lot easier when you break down the process into smaller steps. A business plan can be broken into three sections, and as long as you explain your plan clearly, you will have a competitive business plan lenders will appreciate.