But you should also address the various risk factors of the business, Allen says.
“The loan officer is definitely going to want to know that you’ve thought through all of the potential risks and that you’ve mitigated those risks in some way,” he says.
If you’re applying for a loan or looking for investors, a business plan shows you’re prepared and have fully vetted your business idea, says Craig Allen, a financial advisor who teaches business plan writing classes at Southern New Hampshire University. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
“If you have no financial forecast, which is part of the business plan, it’s very difficult to show the bank how you are going to repay the loan,” Allen says. For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and increase its sales by 50% over the next three years.
Appendix Business plan tips and resources This is the first page of your business plan.
» MORE: Best loans for working capital [Back to top] Here, you’ll list your business’s legal structure — such as a sole proprietorship, partnership or corporation — as well as key employees, managers or other owners of the business.Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made.If writing and editing aren’t your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.This section can also highlight the strengths of your business and focus on what sets your business apart from your competition.[Back to top] If you’re a startup, you may not have much information on your business financials yet. [Back to top] This section provides a snapshot of your small business. It should include a mission statement, which explains the main focus of your business, as well as a brief description of the products or services offered, basic information such as ownership structure, and a summary of your plans.Focus on the key elements of your business plan and avoid getting too bogged down by the technical aspects of your business or using too much industry jargon.You can always put supporting information or other important details in the appendix. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Our partners cannot pay us to guarantee favorable reviews of their products or services. " At Nerd Wallet, we strive to help you make financial decisions with confidence. A business plan can make or break a small business. [Back to top] An objective statement should clearly define your company’s goals and contain a business strategy that details how you plan to achieve them. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. It contains important information including its registered name, address of any physical locations, names of key people in the business, history of the company, nature of the business and more details about products or services that it offers or will offer.