About Lesson
What lenders look for in a Business Plan
Keep these points in mind when writing your business plan.
Demand for your Product or Services?
You’ll need to provide evidence that there is a customer base for the product or service you want to offer. If the product exists today, provide market potential data, market share breakdown, sales history and sales projections for the product/service. If this is a new concept, you’ll want to conduct some market research and present results of surveys, focus groups, or test markets.
Competitive Advantages?
Your product or the process for manufacturing your product may be unique enough to apply for and be awarded a patent that provides you with protection from copy cats for a maximum of seventeen years. Maybe your location is protected from allowing additional competition. Or perhaps you provide your service in such a way that makes you the cost leader.
Realistic?
Although investors and lenders love to back businesses with high growth potential, they are also skeptical when the projections seem too good to be true. This is a flag to them that you may be overly optimistic, naive, or worse, deceitful. Make sure you can back up your projections with reliable data.
What makes up a business plan?
1.Executive Summary
2.Market Analysis
3.Product and Services
4.Market Size
5.Sales Forecast and Projections
6.Management Summary
7.Financial Charts
8.Financial Plan Summary
This is the basic information that you will be required to provide to lenders and investors and is the minimum you’ll need to operate your business effectively. Read each step and complete the tasks outline in each.