Starting And Expanding A Business

Business Plans....

As business owners, or those starting a business, make the decision to obtain financing they need to have an understanding of what it takes to get a business loan, or venture capital deal into process.

All business loan and venture capital deals will begin with the clear communication of the facts which influence a Funding Source to consider the transaction. This communication comes in the form of a business plan.

Great insight into the business owners (Client) company comes from the business plan. Therefore, a plan needs clear and concise data stating the Client's product, or service, who they are, their track record, the funding request, financial statements, and other informative information. Clients must use the plan to effectively communicate their strategies, and their commitment to the success of the project. It is advisable for the Client to have a good understanding of all the elements necessary to make a successful plan.

Many new business owners are so caught up in the excitement of the new venture, they assume everyone else including investors and lenders, will have that same enthusiasm, that they put off completing the best business plan they are really capable of. This is a major mistake. As the saying goes, "those who fail to plan, plan to fail." To expand on that, plan with depth, provide information overload, and provide details, details, details.

Unless the owner can communicate all the details, the Lender will have the ability to complete a through analysis of the data, and come to a sound business decision.

New owners typically spend too much time trying to market projects to funding sources, when the project has no chance of being funded due to the poor quality of the business plan.

There are a number of books and sources available to assist the Consultant, and the Client, develop a better understanding of writing and presenting a business plan.

When approaching a Funding Source, Clients should remember that if a person is job hunting, does a quality resume, or a sloppy one have the greatest possibility of assisting the job hunter? The answer, of course is "quality." When seeking capital for projects, the same is true concerning business plans.

Currently, there are a tremendous number of deals in the marketplace. Someone who really wants to obtain funding will put out the effort so they can show their Funder they have thought through all the details and have the ability to communicate those details to others.

However, many of these deals fall apart due to the fact the "Plan" is not adequate and will never be successfully accepted by a Funder. Clients need to understand that the expectations, of successfully funding a project, diminish greatly when they are unable to present a quality business plan. Submitting an inadequate plan, or completing a plan with partial effort, will not get successful results.

When a Client submits a plan, which is ineffective, there are choices for the Funding Source. One, trash it and move onto the next deal. Two, determine whether the project is at least viable then discuss with the Client the facts of submitting a quality package.

There are going to be times when a Client will ask a Consultant to assist in the development of the new plan. Consultants charge a Consulting Fee for this service. It is customary that the Client pay for all costs associated with the development and presentation of the plan.

When Clients meet express resistance concerning paying for the work, then the Client should take their plan to their attorney and accountant. These people will be happy to rework the plan for free. All kidding aside, are you serious about receiving funding? Then ask yourself several questions. Do you understand the process, and know there is a considerable difference between presenting a quality business plan and trying to receive money on a half-baked plan? Since you now know the difference, do you understand that the Consultants closing commissions do not cover the costs of property appraisals, business valuations, CPAs, Attorneys, demographic studies, travel, etc., just as those commissions do not cover the cost of building the plan? Will the funding lead to a more profitable business? Do you prefer to continue to spin your wheels and waste time, or are you ready to move forward with a quality business plan? Are you now ready to have a professional handle the project for you?

You cannot be successful at receiving financing if you are providing your capital resources sloppy, inadequate, and in complete data. Garbage in garbage out.

Basic Guidelines and Elements of Business Plans

Business Plan Check List

Survey Results for Business Plan Books