More than ideas, running a successful business takes money. Money is the oil of a business machinery, and whether it is to start or expand, you’d always need money. However, as a business owner, you may not always have the necessary funds to push your business. So, you’d need external funding. To get external funding from investors or business loans, you need a winning business plan.
For many business owners—particularly those just starting out—the concept of writing a business plan is scary, and why not? The future of your business literally rests on how convincing your business plan looks to your potential funder. Despite how dreadful, a business plan is one document that could land you the much-needed funds.
So, Why Write A Business Plan?
Considering the cost or mental resources it takes to write a business plan, many people wonder why they have to do it. Obviously, the business is yours, and you have its goals and objectives etched in your heart. You even know what direction you want the business to take in the next five years, so why do you need to formalize it with writing? Here’s why:
- Share Your Business Goals and Objectives
Writing a business plan gives insight into your business goals and objectives. This is important for you as it helps you develop your dreams for your business into clearly written and executable goals. Your business goals can make potential funders decide to invest if it aligns with their interests.
- Share Financial Situation and Future Projections
A business plan shows how much your business has been able to raise and make since its existence. It also shows how much your business can potentially make, and how you intend to pull it off. Investors particularly look at these numbers as it informs them of your business potentials and if it is worth risking their money on.
- Convince Investors and Lenders To Fund Your Business
Your business plan speaks a lot about your business. In your business plan, your thoughts are properly articulated, and this can be convincing to investors or lenders. It can also indicate your capability to actually run the business successfully.
What’s Should Be in Your Business Plan?
A business plan is written with different sections, and each of those sections provides different information about your business. A winning business plan should cover the following areas:
- An Executive Summary
Since investors or lenders are usually very busy people, this section should contain essential details of your business plan. It should be short and captivating enough to hold an investor’s interest and make them flip the next page. The best executive summaries focus on a company’s objectives, target audience, financial data, and opportunities.
- Business Opportunities
This section describes your company’s essence, the products and services. It describes your target audience and your business processes. It is particularly designed to make investors interested in your company and trust it enough to invest in it.
- Current Financial Situation and Future Projection
Investors and lenders love numbers and actively look out for them. How many sales and patronage has your business received? How much have you raised, and how have you spent it? How much patronage and adoption do you hope to have in the future? These entries must be backed with verifiable data.
- Loan Requirement, Intention, and Repayment Plan
If you’re seeking a business loan, your need this section. Where you are seeking a grant, you only need to state how much you need and how you’d be spending the money. For a loan, you have to go a step further to explain how you intend to pay it back. If your repayment plan is fair enough for a lender, they most likely would consider your application.
- The Company Team
Who are the members of your team, what are their roles, and their achievements? Investors are more trusting of companies with full team members whose track records are verifiable and impressive.
3 Tips to Write a Compelling Business Plan
Not everyone that has ever written a business plan gets the funding they so desire. What do people who get funding for their businesses do right when writing their business plans? Below are the top three tips that help:
- Keep it Simple
Do not get carried away with your expertise that you use technical jargon in your business plan writing. Write in clear, simple terms that even investors that are not in your field can understand. Also, use simple data visualization tools to simplify complex data.
- Make it Short
Brevity is the soul of wit. Make your business plan as informative as possible yet, concise. People have short attention spans and can’t stand voluminous documents. So, short and straight to the point
- Be Persuasive
As much as possible, sound very convincing when writing your business plan. Use confident language and sentences to drive your point while pulling in your audience to believe in your business too.
A business plan is a necessity to get funding for your business. So, when writing your business plan, ensure you use the information in this post to make yours stand out. If you still need help writing a business plan, get in touch with us at Draidel.com