If the prospect of conceiving a small business plan is daunting, you need to overcome that fear because it could be the single most important thing you do to launch your new enterprise. Not only will your business plan serve as a guide, but lenders you approach for funding may not give you the time of day if you haven’t got one in hand when you ask for underwriting. To make the job easy, ask yourself the following 10 questions and your business plan will write itself!
1. What’s your mission or vision statement? This succinct statement may be the shortest statement of intention you ever write, but if you can’t come up with the compelling reason you’re starting your business, not only will you walk blindly into the future, but the lender you choose may not look favorably upon your funding application.
2. What’s your company, product or service description? Your firm name is as much your identity as is your personal Social Security number, so make your corporate name count. Next, briefly explain what product or service you plan to offer. If you can’t articulate each of these, go back to the drawing board until you can explain both.
3. Why is your product or service unique? It’s a simple question. Can you answer it? This is the third most important component of your business plan, so don’t ignore it. Does your fried chicken taste better than the Colonel’s yet boast fewer calories? Will your lawn service beat the competition ‘cause they use harsh chemicals and you use organics? In sum, what’s your USP (unique selling proposition)?
4. Who’s your competition? A market analysis thoroughly dissects competitors and gives you the opportunity to project where your new business will fit in the mix. A smart market analysis may even help you project what percentage of the market you believe you can grab. Not sure how to go about this? Time to seek counsel from a small business organization or a fellow entrepreneur.
5. Who’s on your team roster? Are you going solo or have you already got experts on board to help you launch and steer the ship once it’s left the dock? Having some high-power players lined up can only increase your chances of getting funding, for example, since past experience and performance goes a long way in the eyes of companies like AFN, where the right mix of experts can elevate your business plan to greater heights.
6. What’s your marketing plan? How do you plan to get that great idea made, distributed, sold and promoted? Better figure that out now so there’s a complete sales circle to guide you and reassure a business loan resource that you mean business about forging ahead without hesitating. If you want to survive, your marketing plans should have a heavy social media component within its framework.
7. Have you created a SWAT analysis? If you can’t easily name your company’s Strengths, Weaknesses, Opportunities and Threats, nobody is going to take you seriously. Plan to spend time with a whiteboard and advisors who pull no punches with you as you create lists under that SWAT acronym to bolster your business plan.
8. Can you show us the money? Let’s say the seven aforementioned plan components are so impressive, you could be the poster child for business plan design, but a cash flow statement (your current and future financial needs) is nonexistent. This flaw in your business plan can be fatal. At AFN, an intelligent cash flow statement gets our attention. We’ve underwritten 360+ clients in the amount of $252 million, often within two hours based on such data.
9. What are your future projections? Put some ice cream on the cash flow statement cake: draw up your revenue projections so potential lenders can see that you’ve not just planned for the future but done so with panache. Revenues are often inflated, so build some margin into your funding request and you won’t have to go back to the well again as quickly–a sign that you’re a good risk.
10. What’s your summary? Not every lender, investor, angel or venture capitalist wants to slog through the aforementioned nine items. If they’re successful, they won’t have the time. That’s why you need a summary statement that’s so dynamic, anyone you approach for funding will want to read the rest. Is this the single most important component in your business plan? Some say yes, but savvy thinkers will tell you that all 10 of these are critical if you mean business!