All the Ws of a Business Plan

A business plan is a written description of the future of your business and more importantly, how you are going to get there. It is a document that explains what you are going to do to make your company profitable and how you are going to achieve this. It defines both your business model and your strategies to make this business model work and more importantly profitable.

Normally when a business idea arises, you know what resources and capabilities you have at the start of your business and where you want to go in a certain period, usually in 3 or 5 years. But what is the way to reach that goal? Where to start? How to arouse investor interest? Even, how to get your business off the ground? Everything seems so easy when you have the great money winning idea and concept. It is how you are going to achieve these dreams and get enough money to keep the business going for many years to come.

Writing a business plan is to build a map that will guide you to where you start making money with your initial business idea. At is very basic structure, your business plan is a mixture of strategies and plans. It involves financials, marketing, staffing and products. Think of it as the foundation to your new business.

WHAT are the reasons that I might need one?
• To look for investors.
• To apply for a loan.
• To establish the viability of your business idea.
• To make improvements to your current business.
• To expand your current business.

All of these types have different emphasises and a different structure.

WHAT is a business plan?
It is a tool or document that describes a business opportunity or idea, the work team, the operational and marketing execution strategies, the business risks and the economic viability of your business. A well written document guides you to turn an idea into a viable business.

It can also be defined in another context in that the business plan becomes a fundamental tool within the analysis of a new business opportunity, a diversification plan, an internationalisation project, the acquisition of a company or an external business unit, or even the launch of a new product or service within the current business.

To summarise, both for the development or launch of a startup and for the analysis of new business investments, the business plan becomes an indispensable tool. So even though you have an established business, you will still need a business plan as you expand and improve that business.

A business plan is never finished and should be reviewed from time to time at least annually but certainly when large changes to an existing company are anticipated. This implies that every plan must adapt effectively and efficiently to the changes, helping the project to continue.

WHAT is the point of a business plan?
Many entrepreneurs think they only need a business plan when they are seeking investment or when the bank asks for one. However the act of business planning, when completed correctly, enables the entrepreneur to carry out an extensive market study that will provide the information required to design the best possible business model that will be both profitable and efficient.

Additionally, the business plan will develop the strategic measures for all functional areas that will enable them achieve the objectives for the new business.
Once written, the business plan will serve as an internal tool to assess the management of the company and its deviations from the planned scenario. Proposing, if necessary, adaptations to the agreed business model in order to obtain updated information for the daily management of the company. This will include preparation of the required changes and processes to bring the business back on track.

So lets dive into the concepts behind business planning a bit more.

The WHY of The Business Plan
• Why do you want your business plan?
• Why are you writing the plan now?

The WHAT of the Business Plan
• What is the purpose of developing a specific plan?
• In what period do you consider it possible to carry out your projects?
• What is your business model?
• What is your Value Proposition?
• What are your products or services to be offered?
• What positioning do you plan to develop to compete?
• What are your measurements of success?
• What markets do you plan to penetrate?
• What market percentage do you estimate to obtain?
• What margins do you consider possible?
• What income do you consider you will receive?
• What are the costs of expansion?
• What are the costs of obtaining new customers?
• What do you want to do with your business?
• What strategies do you want to undertake – financial, marketing and planning

The WHERE of the Business Activity
• Where will your products be sold from? Shop, office, website, social media, road side, party planning,
• Where are you based? Locally, centrally, virtually etc.
• Where are your products produced?
• Where are your distribution channels?
• Where are they going to be sold?
• Where is your market?
• Where will your staff need to be based?

The WHEN of your business planning activities
• When will you need to start your new activities?
• When will they end?
• When will your investor need to invest?
• When will your investor get their money back?
• When will you have enough staff to carry out your new changes?
• When will your products and services be available?
• When will your products need to be updated and/or improved?
• When is the best time to attract new customers?

WHO do you present your plan to?
• Bank for loan purposes and they will take a charge over a property usually.
• Investor to join your company as a shareholder.
• Angle Investor to join as a shareholder but also be involved in the running of your company.
• Management team so they know what is expected of them.
• Suppliers who will be offering credit.
• Director level hires so that they are encouraged to join your company.
• Believe it or not the entrepreneur should also refer back on a regular basis.

As you can see there are a lot of Ws involved with a business plan – the biggest W is why should you write a business plan and the answer is – because it is such a great business tool.

Get Business Cash Advance Loans Immediately

Getting a business cash advance is simple and easy for most small businesses, and even those who have poor credit scores. While this does not apply to bank loans, these are the requirements of private lenders, and private lenders are amongst the leading funders at this time.

Most business owners who are looking for funding and are unaware of the current requirements and developments of the financial sector, visit their local bank. This is the way people believe a loan is to be obtained, via the bank. However, banks are not very enthusiastic about funding small business, and as a result a whole new industry has cropped up to meet the demand.

Private lenders often fill the gap between businesses and banks. There is the very large segment of small businesses that are stuck in the middle, who don’t qualify for bank loans and yet require financing. Private lenders fill this gap providing many of them with the much required business cash advance in the USA.

The services provided by private lenders

The funding that private lenders provide is typically known as MCA or merchant cash advance loans. These kinds of loans are short term loans that are for a maximum duration of 12 months. The repayment options are easy and flexible, and small business owners can work with the funder to set the method that most suits their requirements.

The application process to apply for a business cash advance is simple and quick, with the private funder generally requiring basic information, and a lot less than those of banks. The basic information required by private lenders to provide an MCA are as mentioned here.

1. How old the business is

2. The gross monthly sale of the business

3. How much they require

4. Purpose of the funds i.e. working capital, business expansion, purchasing inventory, purchasing equipment etc.

5. If the business owner has other loans and if he or she is in bankruptcy.

These are some of the basic types of questions that a small business owner who is applying for an MCA would need to answer. The outstanding difference between an application for an MCA and bank loans is the fact that banks require detailed information related to financial statements. Private lenders basically need a broad picture of the ground realities of the business applying for the loan. Unlike banks all decisions are not based on the statements of the small business.

While banks and private lenders may have a different way of looking at things, private lenders do take care to ensure the ground realities of the small business are as they should be. Banks rely heavily on financial statements when reaching a conclusion related to funding a business.

Features of the MCA loan application process

While it is possible that you will be asked about your credit score even when you are going to apply for private funding. The credit score is not a determining factor for an MCA. These loans are unsecured loans and as a result collateral and security are not required as well.

When credit scores, collateral and securities are not holding back small businesses, the possibility of getting funded is a lot higher. These are the basic weak areas of most small businesses, which hamper their ability to get funded by in large. When these weak areas are removed from between a small business owner and the funding they seek, the process becomes a lot smoother for them.

Collateral is something that most small business owners find difficult to show. Typically, only with a private lender can a small business owner expect to receive a business cash advance with bad credit.

Another great feature is the fact that small business owners can receive the funding they require very quickly as well. The quickest a business owner can receive the money in their business account is 48 to 72 hours, from the time they submit a complete application. At the latest this time frame would be a week or two. Banks on the other hand are in no particular hurry to provide business funding, and a realistic time frame would be a couple of months to receive the money.

The Nuts and Bolts of a Business Plan

Do you need investors? Looking for a loan? Do you want to apply for a grant? Or has the time just come to do a self-analysis of your business? Are you expanding your business? Looking for new markets? Seeking the next level in your business? These are all times that you need a business plan? What are the nuts and bolds of a business plan?

All business plans have more or less the same sections some even have the same content.
However, when they arrive at the investor’s or lender’s table some remain where they are and others pass to the “I’ll read them later” pile or worse still the trash can! So how do you make your business plan readable and memorable for all the best reasons.

Let’s look at what really is at the heart of a business plan. A business plan is a methodology that defines and integrates the activities that are necessary for a business idea to become a company and provides expectations that prove it will be profitable. In other words, it is the hook to get an investor and tell them that your idea is innovative and will be very profitable. Note those two important words: innovative and profitable. No investor will be interested in a company that is not going to be profitable enough to give them their investment back plus a very healthy profit. Now the what could be an interesting word – innovative. For a company to be successful it must have something that is different to all the other companies working in the same market. After all if your company is going to be the same as all the others, they are hardly going to move over and let you take their customers. No, your company needs to have something different that will attract these customers away from what they buy all the time. So innovative in some way, be it products, business model or service.

Lets add another word that your need to prove within your business plan – viable. Your investor or lender wants to see that you company is going to be viable. If you do a Google search about the “Internet Bubble” of circa 1995 you will see that thousands of investors invested and lent to new fangled internet companies that promised to make them millions of dollars in easy profits. Memories are long and now investors look to see that new companies are going to be viable for the for seeable future so that they continue to receive an income stream and have a good chance of getting their loan or investment back.

Your business plan should be a communication tool selling an original idea that serves to attract and convince people that you have the ability to implement the plan by establishing and managing the company.

At the beginning we highlighted other reasons for business planning. In addition to raising funds, your business plan is also the best tool for you to assess the viability of your business.

So that is the NUTS of a business plan, lets look at the BOLTS that hold it together:

Professional: Internally it should be well structured with an index, page numbers, headings and bulleted paragraphs that explain complex matter. Plenty of graphics break up the boredom of too many words. Externally it should be expertly bound and have a colorful and attractive cover page. It stands to reason that full company details and contact information should also be on the front cover.

Tempting. Written in a way that encourages the reader to assess the possibilities of entering the business. Take care of the writing style, be concise but not brief and certainly not so wordy that tiredness beckons. Keep to the point, zwoding extraneous information that does not support your business planning or business model. Avoid jargon and if you must use initials ensure that the first example is spelt out completely with the initials in brackets afterwards.

Dynamic. You have to be creative, but with some restraint. It is best if you tell a story but not one that is found in the fiction section of a library. If the business you propose does not invite big flourishes, save them. It can be counterproductive to distract the reader. Creativity is important as long as you highlight something about the business and is there to keep the attention of the reader. Creativity must only be used to paint a picture of how the business will operate in the future.

Accurate. Clarity is fundamental, but so is accuracy and truthfulness about the current state of your company and its future aims. A little bit of license is offered by the reader but they do expect you to be truthful about your figures, customer numbers and state of the production of your goods.

Ordered. Guide your reader through your business plan and put supporting documentation within the appendix of the report. Although the key information should be in the main sections of the report, in the appendices you can include secondary data, market study results, resumes of professionals and any letters from recommendation or favorable report.

The last big BOLT that will hold your business plan together is CARE. Your business plan is not just something you have to rush through in order to get your funding. It is the description of what your business looks like now and what you want it to look like in the future. Most business plans start at about 20 pages long for a small business setting out in the world to a maximum of 50 pages for a business seeking major funding. Whatever the size of your business plan, and please practice writing complex ideas succinctly, it should be written with care – after all a good business plan is a roadmap to company success!