What is the one thing small businesses need to get to the next level? Yes, the #1 answer is access to available credit. Credit for investment, to increase crash flow, to purchase inventory, to fund a marketing campaign, or to hire additional staff. No matter the amount you need from $2,000, $20,000, or $200,000, the tips in this newsletter will help you understand the key things a lender looks for in your business plan.
Tip #1: Get and Experts Help and Review
Before you go the lender, you need a clear, well written business plan. To maximize your chances for the lender saying ‘YES’ to your funding request, get expert help to create and/or review your plan like Boss Chicks Incubator.
#2: Be Clear About What You Are Selling
Create a specific marketing plan to show the lender that you’re clear about what you’re selling, who’s going to buy it and why and how you are going to reach the buyers.
Tip #3: Define the ‘Who’
Be specific about the ‘who’: Who your customers will be, how much they’ll spend, and why they’ll buy from you. Explain you your suppliers are, your main competitors, what makes your business different or better than your competition, and the industry.
Tip #4: Know How Much Money You Need
No, seriously. There is a difference between how much you need compared to how much you want. Understand the difference, be specific and show how your will be able to pay the lender back for their investment in your business.
Tip #5: Spell Out Your Assumptions
Be clear and specific on any assumptions in your plan from startup costs, investment, marketing costs, inventory on hand, etc.… The assumptions help the lender who receives numerous requests to better understand the context of your business.
Tip #6: Show the Cash Flow
Insufficient cash flow in a business plan is the main reason why loan applications are declined. Lenders want to see and understand several different cash flow scenarios (i.e. optimistic, realistic, and pessimistic) explaining how you will make enough to pay them back. So, an important rule of thumb is to show cash flow along with three different scenario projections and provide a clear explanation. Make is simple and clear, so the reviewer will easily understand your financials. Boss Chicks Incubator focuses on helping businesses in all business development life cycles achieve their business and financial goals. Boss Chick Incubator has extensive experience developing successful business plans for businesses of any type across all vertical industry segments.