19 May From Plan to Financing: How to Get a Business Going
You’ve got a great idea for a business – an idea that’s more than likely based on experience and a lifelong desire to make a living doing something you love. So, how do you get the financing you’ll need to take your idea from dream to reality?
Put financing on the back burner. No, not for long, but first you’ll need to write a business plan. Business plans are like road maps. They help you clearly explain how you intend on starting up and how you will get to all the points along the way.
Three Steps to a Solid Plan
Paint an overall picture
Explain your business from a high level. Write a 50,000-foot overview, not a term paper. So, be succinct. With as much clarity as you can, explain what the company is all about – include your background and where your passion comes from. Next talk about the types of products and services you’ll provide – clarify whether you’re going to be selling something that already exists or you’re introducing a first to market product. Finally, it’s important to explain how your products and services will fulfill a need – talk about how your business will improve people’s lives.
Tell the lender your plan on advertising and promoting your business. Include a timeline for rolling out your marketing plan. Go into as much detail as you can about how you plan to develop and grow your brand, design and utilize a website, use social media, attend industry tradeshows, host industry meetups, advertise and more. A bank, credit union, or other types of lender will be interested in how you intend on getting customers and keeping them coming back.
Here’s where you let the financing company see that you’ve considered your operating costs. – the expense of day to day operations. At this point, your numbers will be estimates, but do a little homework so your projections are realistic.
Be as thorough as possible. Your list should include the costs for wages and salaries, rent, utilities, office supplies, bookkeeping services and more, depending on your specific type of business. This list is important, as it is the main “evidence” your business plan provides to justify the amount of financing you are seeking.
Where to go When Financing is Part of Your Plan
Traditional banks, the Small Business Association (SBA) and alternative loan sources like online marketplaces are all great sources for an initial conversation. So, initially, you should look into all of them.
Explore all of the options they have available for you, from traditional small business loans to lines of credit, business credit cards, bridge loans, alternative financing and more.
You’re more likely to get the financing you need if you invest the time it takes to do a well-written business plan. If you have friends who work in the marketing, operations or financial worlds, use them as a sounding board. Once your plan is done, and you’ve begun to identify potential investors, you’ll be able to move forward with confidence.