A lot of people
come to me and say, "I want to be an entrepreneur." And I
go, "Oh that's great, what's your idea?: And they say, "I
don't have one yet." And I say, "I think you should go get a job
as a busboy or something until you find something you're really
passionate about because it's a lot of work."
Steve Jobs,
CEO of Apple Computer
Business
Plans for Small Business
Business plans for small business come in a lot of forms and
sizes.
Unlike business plans for large companies, the smaller company
has lots of options.
Sometimes the business plan is quite brief,
with a discussion included.
Sometimes the business plan is a fully
automated online presentation.
Basically, your lender needs two things in considering
a business plan for small business:
a valid reason for granting the loan,
and
the reasonable expectation that it
will be paid back.
All else is just commentary.
The
Justification for the Loan
There are many reasons for needing a
business loan, such as expansion capital, seasonal purchasing, need to pay
off and consolidate more expensive loans, equipment purchase or lease.
The reason for asking for the loan is always
a "good" reason. "Paying off overdue bills" is
not a good reason. "Consolidating loans to save interest
charges" is a good reason.
Few banks grant loans for "working
capital". That "capital" has to be
"working" to accomplish something. What is it truly going
to accomplish? Increased advertising to generate new sales
stream? Hire efficiency expert to cut down on manufacturing
costs? Perhaps it will accomplish several things -- great!
List them all.
Two great business plan templates
from 7-Step Business Plans. Check out these, and many more,
by clicking on the book covers.
Paying
Back the Loan
How will this loan make the company better
so that the loan can be paid back easily?
Will increased production bring more
profits?
Will buying raw product in larger lots
produce sufficient savings to pay off the loan?
Whatever it is, make it crystal clear in
your presentation just how that will happen. Leave no room for
doubt.
Information
in a Business Plan for Small Business
With those two goals in mind, the actual
presentation of business plans for small business can embrace any number of formats.
Depending on how
well you know the lender you may want to include:
Biographical information on key
people;
Press releases or other promotional
material;
Financial summaries;
Marketing plan outline;
Brief narrative of background of the
company; or
Anything else that might impress the
lender.
The
Format of a Business Plan for Small Business
The format, too, is far more flexible
than most business plan writers would have you believe. Having an
"executive summary" with precisely 25 pages of backup
information is highly overrated. Look at other options that might
fit your business more, such as:
Looseleaf binder with basic
information;
CD with links to your website, or a
copy of it (in pdf format); or
CD with a brief video of you and your
key people in action;
How do you know what to present to your
lender? Simple: ask.
Sometimes banks are structured so that
all lending decisions are made by a central committee, in which case you
need to present more comprehensive information.
Sometimes authority rests more with the
local branch manager. If you have done business with this branch
manager before, he may not need much to update your file.
Lenders always appreciate brevity.
And honesty. Other than that, business plans for small
business can take just about any form you want.
