You have a great idea for a business and you’re ready to get it off the ground with a loan.
But where do you start?
A business plan is a great way to formalize your plans, sketch out the logistics of running a business, and establish the key aspects of your new venture. It’s also an essential step if you want to secure finance. Here are the four things you need to include in your business plan:
(1) A summary of your business details.
First and foremost you want to introduce your business. Think of it like inviting your partner to meet your parents. You should cover your business name, the key areas of operation, registrations and regulations, ownership, insurance, location, and key dates. This sets the scene for who you are. In addition, you should also describe your product or services. What are you selling? How does it differ from competing products? Will you stand out in the market? Finally, you will want to outline any employment plans and your current management structure.
(2) Your target market.
Knowing your target market is the holy grail when it comes to business planning. This will lay out whom you are selling to, how much these markets are worth, how you plan to reach your market, and details of your marketing mix. It should also give an overview of your competitive landscape, which sets a performance benchmark. Having these answers in mind allows you to synthesize your key risks and analyze them better. A SWOT analysis is the most common way to process this information, highlighting the pitfalls and opportunities ahead.
(3) Envision the future.
A business plan is a forward-facing document that lays the groundwork for years of successful operation. As such, it should include statements on your mission and values, your goals, your objectives, and an action plan which prioritizes the different parts of your business. Knowing where you want to go and having the frameworks to get you there is part and parcel of good planning. Businesses that lack a why or don’t have any goals are less likely to succeed.
(4) Know your finances.
We’ve all heard the saying ‘cash is king.’ Well, that makes credit the queen. When it comes to writing your business plan, you want the finances to add up. Simply, revenue should eventually cover outgoings. To better model this you should develop a month-by-month cash flow budget, outline planned spending, know any projected set-up and ongoing costs, finalize payments and selling information, and look into any loans you will need to cover capital shortfalls.
Your business plan can be as simple or as complicated as your business is. But the better you understand the moving parts, the more likely you are to succeed. If you’re thinking of starting a business, contact Sparrow Loans today and see how your business can hit the ground running.
All loans from Sparrow Loans are backed by property.