Introduction

The “Business” Plan is supposed to help you (and your lender) to find hidden business flaws and to make you think carefully about each phase of your business. That is why it is so important that YOU write your business plan yourself – even more so if you do not have any former business and management experience – since you will gain in-depth knowledge about the business you are planning to start (expand), which in return will make it easier for you to answer lenders’ questions.

Divide your business plan into sections that match the “contents” outline that you will find on page 26 of this guide. Always have in mind that there is no given length for your answers – they will range from a paragraph to a few pages long. Also, pay attention to misspelling, grammar and calculation errors – lenders become very guarded and cautious about future projects if the business plan connected to it is already flawed.

Lenders use the eight 'C’s' rule when they determine your eligibility for a loan:
  1. Credit? (Must be good, mainly derived from your credit report.)
  2. Capacity? (Your ability to repay the loan.)
  3. Capital? (How much money is going into the business?)
  4. Collateral? (The assets that secure your loan.)
  5. Character? (You.)
  6. Conditions? (General economy, finances and anything else that affects your business.)
  7. Commitment? (Your ability and willingness to succeed.)
  8. Cash Flow? (Can it support the business’ debt and expenses?)

Your business plan and the way it is presented will be used to answer some of these questions, which makes it even more important for you to pay attention to detail.

Your business plan is a communication instrument since it is your main way to communicate your project idea to potential lenders and/or investors. The plan shows a structure that needs to be filled by you, including discussing details, making decisions and presenting it in a logical way.

A good business plan gives an overview, makes chances and risks transparent and can make people interested. Lenders will only follow up on you if your business plan has been able to make them interested in your idea. Otherwise, you will just get one more rejection letter for your collection. The plan creates confidence in your project and in you as founder/owner. So to say, the business plan is your very first business card and maybe even the ticket to your (first) business.

Of course, not all criteria and sections mentioned in the guide will apply to your specific business. So select the ones that do apply and concentrate on them while not wasting precious time and resources on the ones that do not apply to your business.

Always have in mind that you are writing the business plan not only for yourself, but also for third parties who don’t know your project and business as well as you do. Therefore, it is better to explain something a little bit more detailed than risking that the reader is losing interest in your project just because s/he does not understand it.

But don’t assume that your business plan will be the only and last piece of information that you are providing to potential lenders or investors. It is much more likely that you will be asked to provide more information, fill out more forms and explain even more details once you managed it to make a lender interested in you.

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