Providing unreasonable sales estimates can hurt your chances of loan approval.
“They know what you can expect sales to be for that type of business in that market,” Allen says.
A business plan typically looks out over three to five years, detailing all of your goals and how you plan to achieve them. If you’re looking for outside funding, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets.
If you’re applying for a loan or looking for investors, a business plan shows you’re prepared and have fully vetted your business idea, says Craig Allen, a financial advisor who teaches business plan writing classes at Southern New Hampshire University. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
“The loan officer is definitely going to want to know that you’ve thought through all of the potential risks and that you’ve mitigated those risks in some way,” he says.
[Back to top] List any supporting information or other additional information that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit history.
If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
[Back to top] Now that you’ve written your business plan, here are some tips to help your hard work stand out: Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well.
Your goals may be aggressive, but they should also be realistic.
“It’s OK to be optimistic if you can justify it,” Allen says.