How to Build Business Plans That Increase Your Chances of Success
If you are a small business owner in need of financing, your business plan could be the difference between success and failure when applying for small business loans.
Many lenders have strict business plan requirements, but it’s not always clear what information you need to provide and what items effectively move your funding case forward.
If your potential funding partners require a business plan as part of the small business loan application process, this basic guide will help you create a traditional business plan that will increase your chances of success.
Essential Elements of a Traditional Business Plan
Despite what your business plan template research has revealed, the truth is that there is no single template for a successful business plan in all industries. Every small business is unique, so there’s no need to try to fit it into a generic mold.
What’s important is that you communicate effectively with your target audience and show that your funding request, if approved, will help grow the business in the months and years to come.
Ultimately, you need to persuade lenders that there is a value proposition to be made by providing financing for your business. If you can be specific about how much money you need to achieve clearly defined business and financial goals, it will greatly increase your chances of success.
While the details and specific structure will vary from company to company and industry to industry, business plans should include the following:
This includes your mission statement, key information about your products (or services), and your leadership group. When written specifically for a small business loan application, business plans should include financial information, including projections and growth plans.
The business description section is where you enter the details of your business, its offerings, and its customers. In particular, this section should highlight why your business will impact its particular market. It’s essential to identify the business problems you can solve for your customers and why your solution provides competitive advantages.
You must demonstrate that your company’s management structure has the resources to oversee all aspects of small business administration. Therefore, this section should include an organizational chart, job descriptions, and identify areas for improvement.
To be successful in any market, you need to have a clear idea of what you’re up against, and that’s what this section is for. You will need to demonstrate a good understanding of your industry and its competitive landscape, including their respective approaches (if applicable) to the business problem you intend to solve.
If you can show what makes your competition successful – and how your business can do it better through your market analysis – then your chances of loan approval will skyrocket.
Marketing strategy and sales plan
Your marketing and sales section needs to answer several important questions, including (but not limited to):
What is your target market? What sales strategies do you have to reach these customers? Why should they choose your business over a competitor?
How will new customers discover your products? How do you plan to cultivate new relationships with your customers?
What will your publicity and awareness efforts be?
How does your business plan to use its funding to achieve its business goals?
If you have a long-term strategy for entering other markets or expanding your offerings with a new line of products or services, explain it here.
Financial analysis and projections
The ultimate goal of a business plan for a small business loan application is to convince potential lenders that your existing business is on solid footing and has all the elements necessary for long-term financial success. which includes meeting your loan repayment obligations.
The financial projections and analysis section should include the following documentation, covering the last three to five years:
Cash flow statements
Capital Expenditure Budgets
Business credit history
Following the historical analysis of your company’s finances, your next focus should be on what lies ahead for your business. Include a financial forecast for the next three to five years, including a projected balance sheet, cash flow projections and income statements.
Turn your business idea into reality with help from Accord Financial
If you’re too busy keeping up with day-to-day operations to take on more paperwork, there are ways to get small business financing without reviewing your existing business plan or writing a new one.
If your business is stable or growing and can demonstrate the ability to handle short-term small business loan repayments, an Accord Financial small business loan can be good for you. Unlike other lenders and banks, Accord Financial will not impose strict collateral requirements or ask for mountains of paperwork.
To qualify for a small business loan with Accord Financial, all you need to do is demonstrate some basic business principles. Specifically, if your business is located in Canada, is stable and/or growing after more than two years in business with annual sales of $100,000 or more (as evidenced by regular deposits into your business bank account , and has an average (or better) credit profile, your business may qualify!