Does it include detailed research, plans, drawings, and blueprints? Is it worded to withstand legal scrutiny as part of an investment proposal? Does it have everything bank would look for in your business loan application; Form follows function.
Venture contests often limit a plan to 30 pages, sometimes 40, rarely 50 — and that includes detailed financials in the appendices. Unfortunately the page limitation leads some contestants to very bad choices, as they cram content into dense typefaces and thick texts, making their plans worse, not better. Several hundred plans entered that competition. Finalists never had less than 20 pages or more than 50 pages.
Most run pages. These are all pages of text, not counting useful graphic additions to show locations, designs, menus, etc. You also want to include the main annual numbers of those tables in the body of the plan. Page count matters far less than readability.
Use business charts to illustrate numbers so your projections are easier to absorb. Use photographs and drawings to show locations, products, sample menus, product pictures, and other illustrations as much as possible.
Make sure that the content titles are very broad; in other words, avoid detailed descriptions in your table of contents. Some people feel that a multi-page plan is too complex to describe in 25 to 50 pages, especially when the business model is very simple such as a one-person landscaping business.
While this is sometimes true, the business plan is meant to tell the whole story. Remember this: business plans, like all correspondence are written to the targeted audience. Many new entrepreneurs think the bank president or BDO will actually read the plan. While the body of the business plan may be up to 50 or more pages and even more for complex structures or needs , the use of an Appendix is invaluable for supplemental information. Need more info?
The market analysis section should illustrate your knowledge about your particular industry. It should also present general highlights and conclusions of any marketing research data you have collected; however, the specific details of your marketing research studies should be moved to the appendix section of your business plan.
Without going into detail, this section should include a high-level look at how all of the different elements of your business fit together. The company description section should include information about the nature of your business as well as list the primary factors that you believe will make your business a success. This section should include your company's organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.
Marketing is the process of creating customers, and customers are the lifeblood of your business. In this section, the first thing you want to do is define your marketing strategy. There is no single way to approach a marketing strategy; your strategy should be part of an ongoing self-evaluation process and unique to your company. However, there are steps you can follow which will help you think through the strategy you would like to use. What are you selling?
What is your service? In this section, describe your service or product, emphasizing the benefits to potential and current customers. Focus on the areas where you have a distinct advantage. Identify the problem in your target market for which your service or product provides a solution.
Give the reader hard evidence that people are, or will be, willing to pay for your solution. In this section, you will identify how much you plan or have already invested in the business. Identify exact no estimates! If necessary, you can include different funding scenarios, such as a best and worst case scenarios, but remember that later, in the financial section, you must be able to back up these requests and scenarios with corresponding financial statements and projections Make sure that you include any strategic information related to your business that may have an impact on your financial situation in the future, such as: going public with your company, having a leveraged buyout, being acquired by another company, the method with which you will service your debt, or whether or not you plan to sell your business in the future.
Each of these are extremely important to a SBA lender, since they will directly impact your ability to repay your loan s. The financials should be developed after you've analyzed the market and set clear objectives. That's when you can allocate resources efficiently.
The following is a list of the critical financial information to include in your business plan packet. Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
This section can also highlight the strengths of your business and focus on what sets your business apart from your competition. You may also include ratios that highlight the financial health of your business, such as:. Net profit margin: the percentage of revenue you keep as net income. Current ratio: the measurement of your liquidity and ability to repay debts. Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors. Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic. You want to show that your business can generate strong enough cash flow to cover the regular debt payments on a loan.
But you should also address the various risk factors of the business, Allen says. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
Providing unreasonable sales estimates can hurt your chances of loan approval. Keep it concise: All you need is 15 to 25 pages for a good business plan, as long as the plan is clear, concise and contains all of the relevant information, Allen says. Focus on the key elements of your business plan and avoid getting too bogged down by the technical aspects of your business or using too much industry jargon. You can always put supporting information or other important details in the appendix.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U. Steps 1.
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