It’s a great feeling when you are in control of your own destiny and one of the best ways of doing that is to launch your own business.
In order to get the financial support, you need from a lender you are going to have to craft a rock-solid business plan and have a viable vision on where you expect the business venture in the near future and further ahead.
Here are some tips on how to put together a business plan that should be viewed favorably by lenders, including why it is not just a case of presenting a set of forecast figures, how to construct a convincing cash flow forecast and why you need to plan for the right level of resources.
Take your time
You are probably very excited at the prospect of launching your business and no doubt believe that you have the seed of a winning idea that you want to plant and see where it takes you.
You can find some more details and rates out about small business loans when you click here, for instance, but before you make any sort of application it is important that you take the time to gather all the necessary components together that combine to make an attractive and viable business plan.
Read also: Loan types and How does it work?
Try to define your marketplace and your customers. Lenders will want to know how you intend to make an impact and what the typical profile of your customer is likely to be. If you can’t provide an assured response to that question it will knock a lender’s confidence in the credibility of your sales forecasts.
To help you support your sales forecast figures gather together some market research data so that you can demonstrate what the sector you will be trading in is worth and how potential there is for growth.
Cash flow is key
If you don’t generate enough income or fail to anticipate how much cash you actually need for the business, both of these scenarios could have disastrous consequences.
You will need to convince a lender that you have worked out exactly how much cash you need to trade and to pay all your liabilities, including the loan repayments.
One area where a lot of business plans look weak is when you don’t manage to determine your resource requirements correctly. If you are going to grow the business you will need enough staff and adequate premises to cope with these ambitions.
A lender will want to see your vision for the future which doesn’t just promise strong upward sales growth, they will also want to see that you have properly planned and cost out the resources needed to make that happen.
What have you got to offer?
If you are looking to borrow a reasonable amount of money to launch a business or want some extra money on top of your own resources to fund your plans, be prepared to be asked for collateral.
Most lenders take a cautious approach and this means they want to know how they can get their money if things don’t go as well as planned. Think about what collateral you can offer and decide if you are comfortable with that scenario before making your application.