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  • - Common Failure Factors
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  • - Marketing Strategy
  • - Break Even Analysis
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Home > Getting Started > Business Plans > General Tips

The Business Plan General Tips

Make it brief, to the point and easy to read. The summary items (Source & Application of Funds, Statement of Purpose, Executive Summary) and financial projections are the first parts of the plan your banker or potential investor will read. If they make financial sense, then the rest of the plan will have additional value. Use layman's terms, or include a glossary, if your plan uses technical terms.

As a rule of thumb, unless you are requesting a very large amount of money, the plan should not exceed 25 pages. Voluminous research data, surveys, letters of intent, catalog pages, samples, diagrams and other information should be included in a separate binder or as appendixes to the basic plan.

Use a Market Driven Approach. Marketing is the engine that drives the projected sales revenues. Demonstrate and substantiate how the customer will benefit and be motivated to purchase your products, goods or services.

Exploit Your Company's Unique Selling Point (USP). Explain what will give your company a competitive edge in the marketplace (patents, trade secrets, copyrights, barriers to entry, etc.).

Emphasize Management Strength. Convince the reader that you, or your team, possess the necessary skills and expertise required to actively manage the business. If you need a key employee (i.e. a chef in an upscale restaurant) indicate the incentives that will keep them with you.

Present Attractive, Yet Realistic, Financial Projections. Paint a realistic picture--substantiated by facts or assumptions--of where your company will be going with the funding it receives. Be detailed and keep it credible.

Be definite about how investors will get their money back and when. For lenders, show that their funds are adequately secured and that your cash flow more than covers their interest and principal payments. Weave the theme "This is how you get your money back" into the entire plan.

Avoid computer software business plans where you plug in numbers. Individualize your financial projections because no two businesses are alike, and a start-up company may not fit the standard industry norms.

Spend plenty of time working on your plan. As you gather information, the plan will need to be continuously revised and edited. It's not unusual to spend up to a year developing a detailed plan.

Borrow enough money up front. Don't assume that the bank will lend you more money if or when you may need it in the future.

Do your Homework. It is likely that the loan officer will have to present your plan to a loan committee. If your plan is not complete enough to sell itself, your chances of approval are slim.

Prepare and rehearse your oral pitch.

Proofread the plan.
Have someone else read your plan for style, spelling, grammar, accuracy, consistency, and completeness. If it is an easy plan to read and understand, it will be easier for possible financing sources to say "YES!"

Learn from your mistakes. If you are rejected by the first bank you contact, find out why, fix the problem and reapply at another institution.