Need a small business loan?
I would like to talk about what to do if you need some extra funds. How specific can I be? I guess only a little. It’s a hard thing to generalize because every single person is in a different place when they apply for a loan and every business will need something a little different. One thing every business will need is a business plan. If you want to apply for a loan, you must have one, but it’s probably a good idea to build one even if you don’t require funding. This week I’d like to introduce you to what a business plan is, and hopefully help you get started.
A business plan is exactly what it sounds like… It is a comprehensive guide to what your business is and how you will run it. A great business plan is what can lead to a business’ success. Additionally, if you don’t know what your business does and how your business will do it, then how can you expect your clients to know? Having a plan is essential when applying for loans because it is the primary way a lender can know your business is viable and you’ll be able to pay the loan back.
So what goes into a business plan? At CBDC Blue Water we have documents that guide you through the process of getting everything you need together. Typically, if you come looking for a loan with us, one of our Business Development Officers will first explore your options with you and determine if a loan is the best solution to your needs. If the answer is yes, they will send you off to get started on a business plan with a handful of supporting documents. However, you are never on your own with us, first collect the information that you can and if you get stuck a Development Officer will help you fill in the missing pieces before you send your application.
Step one of your plan is an executive summary. Treat this a little like an elevator pitch. The five Ws of your business with a couple extra questions thrown in:
- What is your business? The Industry? The nature of your services?
- When did you, or will you, get started?
- What products or services do you offer?
- Who is involved? Are you on your own? Working with a partner? Have a team waiting in the ranks?
- Where is it? Working from your home, an office, to be determined because you need to buy property?
- What do you want to achieve by writing the business plan?
If you can answer all of these questions your off to a pretty great start and the rest of the business plan is just going into the specific details of these answers.
Next, you break down the “what” of your business as specifically as possible. Tell your lenders whether the business is new or existing and whether or not you are purchasing it from someone and who that someone is. This is a good place to talk about the reason you want to own or start the business in the first place.
Something important to note is that, while your financials, credit and quality of business plan all play a factor in the approval process, who you are is also important. Establishing trust and a good rapport shows lenders you are committed to the repayment process and, more importantly, to the longevity of your business.
You will need to outline your services and products. What are you selling? How are you going to make money? Are you operating seasonally? What will make your products and services unique to your competition? Does your business solve a problem or fill a hole? What is the structure of your business? Do you have a team? Your lender is looking for all the reasons that people will keep coming back. Once you have all this information lay it out on a timeline of when you hope to accomplish everything.
The more specific you can be with your answers the clearer the vision of your business becomes. If you treat each section of your business plan like a brick in the foundation of your business your bound to come out stronger than if you start building every time an unanswered question presents itself. My hope is that this gives you enough information to get started. In the next blog, I’ll talk a little bit more about the next steps. We will take the business plan process section by section and start looking at an Industry Analysis and Market Analysis. Until next time! Happy Planning.