Like most of the 5 million small businesses started in the US in 2022, yours may need an infusion of startup cash. While it’s not easy to think about having to ask friends, family, lenders or investors for cash, if you believe your business idea is important enough to start, it surely must be important enough to fund. So, let’s get started.
Starting a business can be challenging if your plan isn’t in place. We suggest that you start strong and continue that way by using this traditional business plan template. The plan isn’t complicated or intensive; on the contrary, it contains steps to confirm and validate every major portion of your new business, including an analysis of competitors, assessment of your target audience, a financial plan and forecast, a complete marketing strategy program, an operational plan and other details as needed.
Most importantly, it holds the mission statement and objectives you’ve created that explain exactly what your business was created and the ways in which you will implement your vision through various objectives. The completed document will be a historical journal, as you will add to it before, during and after major evolutions in your business.
In addition to the above, securing funding is, of course, on the minds of most startup owners and needs explanation to fully grasp the process of becoming funded. Exactly what is the process? Holding a completed business plan, the lenders or investors will often rip out the executive summary, with an overview of the entire business plan, along with the financials, and read those two documents. Then, when the reading is complete, the lender or investor will approach the business owner and offer a variety of choices if interested in funding. Options may include:
A lender may offer to fund the requested amount to fully fund the loan request. This may contain a demand for a down payment prior to funding, along with a repayment schedule of the loan payment amount plus interest, as set by the lender or banking institution. When fully paid, the two business entities have no further obligations.
An investor may offer to fully fund the requested amount according to certain parameters. For example, the funding may not need to be repaid by design, however, the investor will expect to receive ownership shares of the business of up to 20% in exchange, along with the voting privileges of other members of the staff. While both funding offers have positives, carefully consider before accepting either offer.
Other areas of interest to investors or lenders in the business plan will be those that conduct revenue-producing results. Crafting marketing strategies to capture first-time visitors or those who are returning customers is equally important and indicative of the kind of success that lies ahead for the business. As a result, lenders and investors will also be interested in this section of the business plan. An excellent marketing strategy begins with a series of questions designed to present the concept of a “competitive advantage” to market to customers. For example:
- Will you provide options for customers to receive services in a long-term program?
- Will you offer products that your competitors can’t or won’t?
- Will you provide additional services that your competitors can’t or won’t?
- Will you offer better pricing or packaged services?
Each of these is designed to encourage the strategy being formed behind any marketing attempt. Based on the answers, your business stakeholders may design and execute a website construction and improvement plan to fully optimize and build the website deep and wide. Another action might be to market the additional services offered that the competitor can’t by calling it out on social media or emphasizing it in advertisements in periodicals. After the promotion or campaign is concluded, the results, or metricsshould be tabulated and entered into the marketing section of the business plan for future reference.
The process of securing funding with your startup business plan isn’t an extremely complicated one. It is the art of presenting your business to lenders or investors who want to know with some security that any funding provided will go to a business with a solid foundation and a strong sense of purpose for the future. The marketing strategies that are included garner new businesses, which are equally important for lenders and the strategies also demonstrate the visionary side of the business leaders in creative design and plans.
Lenders and investors will make funding offers with provisions that include certain perks for the companies they represent: either repayment with interest on a schedule, or ownership of a percentage of the company under review. Consider either type of offer carefully, as you’ll want to ensure it’s the right and best decision for your business. In any case, your business plan will set the foundation for your new business in place. Congratulations!