There have always been people who liked the idea of starting and running their own business. They like the idea of the freedom and independence this offers – though in fairness there are downsides too – working alone, doing all the accounts and paperwork etc. It isn’t as easy as you might think.

In the current economic climate many people are losing their jobs or are worried about doing so and many are considering setting up their own business. But beware, whatever kind of business you plan on starting, remember that the most important thing you need is money.

If you don’t have enough money to start your own business, perhaps from a redundancy package, you will really want help from financial institutions, such as a bank to assist you in getting your business started. Venture capitalists are also people you want to turn to if you want that capital you need to start your own business, but they are really only interested in large amounts. So for most people, apart from getting onto Dragons’ Den, they are stuck with looking to get help from a bank.

Now we all know that the banks are not lending much at the moment, but that doesn’t mean they will not consider helping business start-ups but you can’t just expect them to simply hand you some money and let you go on and start your own business without a lot of information on you, your background, the business you are starting and why you feel you will succeed so that they will get their money back.

You have to convince them to lend you that money.

To do this, you need a business plan. A business plan is an essential document when starting your own business; you need a business plan even if you don’t need to borrow money from venture capitalists or the bank.

However, if you need to borrow money for capital to start your own business, then a business plan is the most important thing that you will rely on. A business plan will basically tell the investors how you plan on operating your business and is also an assurance that they will get their money back.

But, many people keep on asking the same questions over and over again. They always ask “How do I write a Business Plan?”

Well, writing a business plan can be very simple if you stick to the basics. Here is what you need in an effective business plan that will help you get the capital you need to start your new business:

  • Executive Summary Section – This section will explain a brief explanation about your business. Remember that this is a summary, so keep it brief, to the point and most important of all, clear.
  • The Business Section – This is where you will put your planned business name, the address, and a detailed description of what your business is all about. Make it easy to read and don’t include a lot of technical terms. In other words, you should never assume that the reader has the same technical know-how about your business.
  • The Market Analysis Section – This section will basically show your marketing plan. This will include all about your target customers, the trends in the industry, your pricing and packaging plan, and also your company’s policy.
  • The Financing Section – In this part of the business plan, you will mention all the different aspects about your business’s estimated financial status. You will include an accurate amount of money you need to start the business, how much of your own money you are willing to invest and also how you will be able to repay the debt to your loan.
  • The Management Section – This will show the outline of your company’s organization. You have to include the legal structure of your business, whether it is a limited company, a partnership or a limited liability partnership.

As you can see, it will answer most of the questions that people will ask you when you ask for their money. You should make a business plan as thorough as possible and also as brief as possible.

There are a number of resources to help you complete your business plan and some banks will even give you software to help in the process. 

Good luck! 

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Category: Starting a Business

3 Responses to “Starting a Business – You Need a Business Plan”

  1. James Green says:

    Thanks Kay, do keep an eye on our articles.

  2. Kay Renfrow says:

    Hi there,

    I thought this was a helpful article, especially for us newbies, that don’t know where to start. Look forward to reading more. Kay Renfrow

  3. Jayne Malone says:

    Good info on this and related posts. Tweeted.

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