One of the biggest challenges that young entrepreneurs face is finding sufficient funding for the business. Of course, there are multiple banks and loaning agencies that offer small business loans. But not all of them will be willing offer you their money. While it is important to have a good credit score and an influential recommendation letter, the more important requirement to secure a business loan is a smart business plan. In this case, here are some important factors that you must include in this plan.
Similar to an introduction, the executive summary sums up the overall plan. It tells the reader what you want in a very few words. Most often, bankers do not read the entire plan. In this case, it is important for you to make a convincing argument in the summary itself. The ideas in your summary must encourage the banker to read the entire business plan.
You need to discuss the features and benefits of the product in a clear way. Remember that the manufacturing process can cost a lot of money. Thus, you need to explain the cost factors in a precise manner. If you are ambiguous with the numbers, you will not be able to make a strong case. Be clear about what the product is and how you are going to make it.
The marketing plan explains the behavior of your target audience and how you plan to convince them to buy your product. This information is essential to predict the profitability of a business. For instance, if Muslims entrepreneurs are planning to sell their product only to Muslims, it will lead to a limited profit. This may leave some doubt in an investor or banker’s mind since there would be a limit on profit. Thus, you need to make your marketing strategies inclusive to a wider target market.
Apart from the content of the plan, the way you present it can affect your chances in securing the loan too. So, don’t forget to be confident and positive about your ideas.