business plan – BizFundingResource.com

Writing a Business Plan Guide with Pictures and Free Template

A complete step-by-step guide (with pictures and free downloadable business plan template) that guides you through the entire business planning process.

For many entrepreneurs, writing a business plan can be an extremely daunting task. Many people are intimidated by the amount of content that needs to go into the business plan, and they are often unsure of how to properly write one. In this guide, we will down each of the steps that are necessary in order to complete a comprehensive business plan.

First, our sales pitch. If you are having difficulties developing a business plan on your own, our website provides a number of templates that you can use to assist you in this process. Each plan that is showcased on this website is specific to its title. The package includes a word document with a completed business plan that you can alter or modify to your needs. Additionally, each package includes a number of other support materials including Excel files that will assist you in developing the financial portion of your business plan.

MS Word Business Plan Template Download

MS Excel Financial Model Download

Please download both files. Also, please note that the purchased version is far more comprehensive. We have 550 different business plan templates available.

On the quick side note, if you are truly struggling with developing a business plan then there are many professionals that can assist you without the process. Over the past 14 years, I have written more than 4,000 business plans on a domestic and international basis. At this point, writing a business plan is basically bodily function. Many people do feel that it is sort of cheating to hire someone to develop a business plan on your behalf. However, and although I may be biased here, this is simply not the case. Many entrepreneurs have a perfect vision of how they want to develop their business and simply struggle with putting down their concept onto paper in a presentable format. My firm specializes in developing comprehensive documents that are specific for capital raising among investors as well as financial institutions. We take our clients vision and simply transform into a beautiful presentation that any person can read and understand. As such, if you find yourself continuing to struggle with developing a document then it may be in your best interest to hire a third party to help you.

Now onto the guide. First, let’s talk about how a good business plan is written. When we develop business plans, we first produce the market research for the document. As this serves as the foundation for a good business plan, it is important to do this that first. Many people try to start the work by writing out their executive summary. However, I have found that it is best to wait until the very end to write the executive summary as a well written executive summary acts as a guide for the rest of the business plan.

Completing the Market Research

There are a number of online resources that you can use when developing your market research. First, let’s look at the important sections that need to be included in this part of the business plan. The first section is generally an overview of the economy as a whole and how a negative change in the economy can impact your business operations. Specific points that should be discussed in a one to two paragraph section including the current unemployment rate, current interest rate environment, prices of assets among all classes, as well as of where the economy is heading. At the time of this writing, October 2019, unemployment rates have remained very low while interest rates have remained low as well despite substantial increases in asset prices. The trade war between China and the United States may impact the economic climate moving forward. Tariffs have caused the prices of many common goods to increase substantially as a majority of consumable products within the United States are manufactured in China and other overseas markets. Additionally, other issues pertaining to currency valuations can impact the economy moving forward. This is a strong example of specific things that should be discussed in the economic section of your market research.

The next section of most business plans deal with the industry analysis. This includes taking a look at the industry or industries in which you are going to be operating, the number of people that are employed by the industry, annual revenues generated from all businesses included within the industry, as well as any market trends. For most industries, they are highly established. For instance, an industry like the food and beverage service is not going to have very many changes in the way that they conduct business moving forward. Restaurants and other eateries have been around for hundreds of years, and they typically have growth rates that are in lockstep with the economy as a whole. However, if you are in a business such as financial technology – then you may need to conduct a much more in-depth analysis regarding trends within this industry. This would include discussing major competitors, any pieces of legislation or regulation that may impact your business, and other facets of operation that are going to need to be addressed on an ongoing basis.

Third, in this section it is also important to outline the average customer profile or user profile of your services or buyer of your products. This includes examining annual median household income, age, gender, as well as any specific types of character traits that are specific to the type of product or service that you are offering. In this section, many people also outline the estimated number of people within the target market that would be potential buyers. This is extremely important especially for local or regional businesses as you want to ensure that you’re going to have enough people within your market to support an economically feasible business. For instance, returning to our discussion regarding a restaurant, you’re going to want to look at population size and population density as compared to the number of other restaurants within your target market. This will ensure that in any given night there are a number of people that are willing to come to your restaurant so that it operates near 100% capacity. For other businesses, such as online businesses, you may want to take a look at the number of people within a specific country or on a worldwide basis that are potential users of your services.

Fourth, in this section we typically discuss the competitive issues that a business will face as it progresses through its launch as well as ongoing expansion. For local and regional businesses, conducting a competitive analysis is relatively easy given that you’re familiar with the area and can simply find what competitors are offering products or services that are similar to yours. An examination of competitors should include their estimated annual revenues, number of employees, and how long they have been in business. A more subjective overview of a competitor includes the strength of their brand name, how long they’ve been in business, and their market reach. For larger scale businesses, such as online businesses, it is slightly more difficult to carry out a competitive analysis given that you’re going to have to find companies that operate throughout your entire country or on a worldwide basis. Conducting this type of market research is little more of an involved process but can be easily achieved through use of search engines. When carrying out these types of operations you should use specific keywords and phrases that are specific to the products and services that you’ll be selling. This will allow you to see the more prominent competitors within your field.

One of the ways that you can make your market research stand out is by developing a number of charts and graphs that are specific to your industries. Below are some links to companies that you can use to acquire graphics specific for the industries that you operate within:

https://www.IBISWorld.com

https://www.Statista.com

The Financial Plan

After the market analysis is done, it is time to develop the financial plan. Most business plans have a three-year to five-year pro forma financial model included. Generally speaking, it is very difficult to estimate anything beyond a three-year period. A financial plan consists primarily of three parts: a profit and loss statement, cash analysis, and balance sheet. It is also important to include other metrics such as the breakeven analysis as well as important business ratios that are applicable to your operations.

As it relates the profit and loss statement, this table showcases your revenues, cost of goods sold, your operating expenses, as well as your pre-tax profit. The profit and loss statement showcases your estimated taxes as well as any interest expense that you may incur. Below is an image of a standard profit and loss statement:

Relating to the profit and loss statement is the cash flow analysis. Here, in overview of the cash coming in and cash going out is showcased. Although this may seem very similar to the profit and loss statement, it is actually very different. The top line of the cash analysis showcases the net profit of the business. The net profit is the income that is generated after all expenses including taxes and interest are paid. The cash flow analysis showcases any equity investment that has and made into the business, any increase in borrowings, accounts payable, accounts receivable, as well as any asset purchases that are made and any dividends that are distributed. Below is an image of a standard cash flow analysis:

Cash Flow Analysis Image — Cash Flow Analysis Bar Graph

When developing a financial plan, this is where most people start to have some issues. Most people commonly understand the concept of a profit and loss statement as it is simply a measure of income generated minus all expenses. With a cash flow analysis, certain metrics and deductions are made that do not impact the profit and loss statement. One of the key things to note as well is that if you are taking on a business loan to develop your business then the interest is deducted from the profit and loss statement while the repayment of principal is deducted from the cash flow analysis.

Once the cash flow is completed then it is time to finalize the balance sheet. This is a measure of all assets owned by the business minus all liabilities. Common assets that are acquired by businesses include furniture, fixtures, and equipment, the cash that is held in a bank account, as well as any inventories that are carried. A balance sheet looks like this:

As it relates to liabilities, this includes any payables that are owed to third parties, tax liabilities, as well as any outstanding business loans or lines of credit that have been taken out in order to launch or expand the business. The value of the company is calculated by subtracting the total value of assets minus the total value of liabilities. It should be noted that there are certain instances where you may have negative equity. However, this is done more of a managerial standpoint basis. If you are having certain issues developing your balance sheet or if you are an existing business then may want to consult with a certified public accountant that can assist you with developing this part of your business plan.

On a quick side note, your certified public accountant will be an invaluable resource not only for managing your tax issues and accounting issues, but also for business advisory perspective. They can assist you greatly with developing your business plan while providing you with insightful advice about the best way to expand your business or organization. Most CPAs are very affordable for most small business owners.

Once the profit and loss statement, cash analysis, and balance are completed then it is time to carry out some other calculations. First, you’re going to want to take a look at your breakeven analysis. This segment of your financial plan will showcase how much revenue you need to generate on a monthly or yearly basis in order to reach breakeven. This is a very important metric that most business owners use in order to ensure that they can reach profitability quickly. This calculation is completed by taking a look at your total fixed operating expenses and dividing by the amount of gross profit that needs to be produced on a monthly or yearly basis. A sample breakeven analysis is shown below:

A common metrics table is usually included within the financial planning part of the business plan document. Key metrics that are examined in this table usually include sales growth, assets to liabilities, assets to equity, as well as certain metrics regarding liabilities to amount of cash on hand. Some of these metrics are a little bit more theoretical in nature given that certain circumstances do not occur in the actual business world. However, many of these metrics showcase the overall financial health of the business. Many lenders as well as many investors frequently want to see these metrics charted within a business plan.

Products, Services, and Operations

In this section analysis, it is time to showcase the products and services that will be offering to your customers or clients. This is the section of the business plan that can be a little bit more sales focused as a relates to connecting with your investor or funding source. Generally speaking, a more scientific and clinical approach is taken to writing the rest of the business plan to showcase the feasibility and economic viability of your planned business. In this section, however, you can thoroughly discuss why you are offering an outstanding product or service that will be in demand among a number of consumers or clients. In most business plans, this section of the business plan ranges anywhere from one to four pages. If you are offering a number of products or have developed a proprietary product then you can also include images in this section of the document.

One of the other things that is frequently discussed in this section of the document as well is the overall operations of the business. This includes discussing matters such as customer service, hours of operation, layout of any retail facility, and other pertinent information as it relates to properly providing the service or selling your product to the general public.

Another point that is discussed in the products and services section is the pricing that is associated with your product line. It should be noted that if you offer a number of products, such as hundreds of products, it is in your best interest to reference a product catalog that can be seen separately from the business plan. One of the common mistakes that I see when I’m reviewing business plans that people have written on their own is that they list every single product that they offer in this section of the business plan. In order to keep the business plan as short as possible, a product catalog can be included as a separate document so that a funding source can review it should they choose to do so.

The Financing

In this section of the business plan, in overview of the capital you are seeking to raise is discussed. Most importantly, a table should be created that allows you to show the funding source to see exactly how these funds are to be used. If you are purchasing substantial pieces of tangible assets then you may want to list them all within the section, but keep in mind that brevity is important. Below is a sample table that showcases what a use of funds chart generally looks like:

Other important aspects of this section of the business plan include discussing the equity that we provided to a potential investor should they place money with your company. Additionally, the current ownership structure the business is discussed in the section as well. Finally, this section generally ends with an overview of the exit strategies that will be associated with your business.

In nearly all circumstances, as it relates to exit strategies, a business is sold, in whole, to a third-party. While many people discuss the usage of an initial public offering, the fact of the matter is that very few companies actually go public. In fact, there are only tens of thousands of business is in the United States are publicly traded. The remaining 100 million businesses are privately owned and operated, and are eventually sold to third parties for substantial earnings premium. One of the key things that should be discussed with in your exit strategy is the anticipated price to earnings multiple that similar businesses in your industry self or on an ongoing basis. This will assist the funding source, especially an investor, with an understanding of how much the business could potentially be worth by the 3rd to 5th year of operation. In many other instances, you can also include a pro forma valuation table that showcases the potential valuation based on profitability.

The Overview of the Organization

In this section the business plan, general information regarding launch dates, mission statements, mission statements, and organizational values are showcased. This section of the business plan is usually placed in the middle of the document. In business plans that I write professionally for people, I put this as the fourth section of the business plan.

One of the key components of this section of the business plan is the development of a proper mission statement. For many smaller businesses, this can be less of a priority as are simply trying to convey that you are trying to provide a great product or service to the general public, while developing a profitable enterprise. For larger companies, especially those with proprietary technology or a proprietary operating methodology, this is a little bit trickier as you want to clearly state exactly what you’re organization is looking to achieve on a very large scale level. This is something it takes a little bit of time to develop, and you can actually keep this part of the business plan open ended as you complete the rest of the work. Many people often take one month or two to develop the proper mission statement. It should be noted that this is a relatively small aspect of the overall business plan, and most financial institutions – especially for smaller businesses – do not place much weight on a properly developed mission statement.

The Marketing Plan

Of all the sections of developing a business plan that I enjoy writing, the marketing plan is my favorite. This is primarily due to the fact that you can outline exactly how you want to position your product or service and business to the general public. In this section, is important to start with a bullet outline of specific objectives that you’re going to look to achieve on a yearly basis. This includes discussing how to maintain a major presence on social media, carrying out comprehensive print campaigns, as well as developing a loyal customer base that will refer customers or clients to your business on an ongoing basis.

One of the things that I often include in the section of the business plan is a breakdown of all revenues generated by the business by product category. Below is an image of what this table looks like:

As you can see, in this example I show that three different products and two different services are being provided to the general public. This is an important table as well as an important part of the marketing plan as it shows exactly where your revenue centers and profits are coming from on a yearly basis. This is something that can be thoroughly discussed within the marketing plan as it relates to pushing specific services to your potential customer base.

An overview of the yearly sales, in word format, is often discussed as well in this section. Primarily, in overview of first-year sales and second-year sales are thoroughly discussed while third year to fifth year sales are mentioned briefly to showcase the operations of the business once it is fully established.

The marketing strategies that you’re going to use to promote your business need to be thoroughly discussed within the section of the business plan. Generally, this section should run one to two pages. This includes, again, discussing all the ways in which you will promote your business. One of the interesting things about writing a marketing plan these days is that a heavy focus must be placed on online marketing activities. This includes the use of a proprietary website as well as maintaining a presence on popular social media platforms such as FaceBook, Twitter, and Instagram. Many marketing plans also include a discussion regarding usage of platforms like YouTube to develop video commercials and presentations that will showcase products and services to the general public. One of the interesting things about online marketing is that many of these platforms are completely integrated with one another. If you develop a video presentation for your business you can seamlessly share it on other social media platforms once it has been uploaded to YouTube. These are all topics that should be very thoroughly discussed within your business plan.

For local and regional businesses, special importance remade in regards to showcasing a traditional print marketing campaign, distribution of mailed flyers and brochures, as well as establishing relationships with other organizations in your target market. Many small business owners find that they are able to generate a substantial amount of business by becoming members of their local chambers of commerce as well as joining a number of other small business organizations. For instance, when we develop a business plan specific for a real estate brokerage we focus heavily on that individual and business becoming enrolled in his many organizations as possible in order to develop a referral and business network.

The Personnel Summary

In this section of the business plan, we outline of the organizational structure is provided. Below is an image of a simple organizational structure specific for a delivery business:

Additionally, this section of the analysis also includes a chart showcasing the different types of employees will be hired, their pay, and headcount of the business. A sample chart showcasing this looks as follows:

One of the other common things that is put into this section business plan is the biography of the founder. This includes discussing all relevant biographical information, work experience, and educational credentials. This can be kept somewhat short and it should not exceed more than three to four paragraphs. Generally, we write a biography for the owner and then reference the fact that a resume or curriculum vitae is available upon request or is it included as part of the overall business plan package.

SWOT Analysis

This is usually one of the appendices that we include in each of our business plans. A well-developed SWOT analysis focuses on the strengths, weaknesses, opportunities, and threats that are going to be faced by the business on ongoing basis. Generally, we do this in a bullet point fashion and it should not be more than one page.

Critical Risks and Issues Section

As any entrepreneur knows, nothing ever goes according to plan. As such, it is important that a page that is specific to the issues that a business may face is included as well. This is of tremendous value to any potential reader – including private investors and financial institutions – as it will show that you have properly prepared for major issues that may occur as you progress are your business operations. Generally, we break this down into five sections.

The development risk paragraph focuses on issues that could occur during the course of start up. The primary development risk for most startup companies is their ability to acquire the capital that is being sought in the business plan, while concurrently launching revenue-generating operations.

The financing risk paragraph focuses heavily on the usage of funds, and what would happen in the event that the business does not work out as planned. For instance, an example of discussing the financing risk for restaurant would be to focus on the fact that a substantial amount of furniture, fixtures, and equipment as well as other tangible assets are going to be purchased with any debt capital or equity capital from a funding source. The high margins that are generated from food and beverage sales generally offset ongoing risks relating to this type of financing. In the event that a business is liquidated, the tangible assets can be used to pay back any funding source.

The marketing risk paragraph is followed after the financing risk paragraph. This discusses the marketing strategies that will be used in order to promote interest in the business and its products and services. It should be noted that many marketing strategies are relatively expenses, and they can often not produce the revenue results that are anticipated in a business planning document.

Valuation risk is followed by the marketing risk section. This discusses the potential returns on investment for an investor should the business not produce as much profit as anticipated in the financial plan. This can be done on a bulleted point basis.

Finally, exit risk is discussed. For many businesses, it takes anywhere from 1 to 2 years to properly prepare and sell a business to a third-party. As such, issues pertaining to liquidity as well as how long it would take to properly sell the business for an appropriate price to earnings multiple should be discussed in this paragraph.

Although this is a lot of content, this can all be included on one page.

Reference Sources

In this section of the analysis you should include a list of all reference sources ever used in regards the business plan.

Executive Summary

This now takes us to the executive summary. Of all the sections of the business plan, this one is the most important sections is it is designed to capture a reader’s attention immediately. There are a number of different ways that you can go about writing your executive summary, but we have developed a streamlined approach that allows the executive summary to state exactly what you’re looking to achieve all acting as a guide for the rest of the business plan. A well-written executive summary should be about two pages in length.

First, your opening paragraph to discuss the type of industry they are operating within, the name of the business and where you’re located, and how much capital you’re looking to receive in order to launch or expand operations. The names of the founder and owners should also be included within this paragraph. One of the other things that we include is the anticipated start date or quarter of starting or expanding revenue-generating operations.

Second, a two paragraph overview of the products and services that you are selling should be included next. This includes any specific information regarding any proprietary technology or proprietary service that you will be offering to the general public.

Third, an overview of the management should be included as well. This is important if your business requires specialized expertise is required by the owner or any key member of the management team. You do not need to put a substantial amount of biographical information in this section edits it is covered in the personnel summary. References to varying aspects of the business plan should be included as well. For instance, if you reference your background in having a substantial amount of retail experience then you should direct readers to the section of the business plan that discusses your background by chapter name.

Fourth, a quick overview of the anticipated profit and loss statements over a three-year period should be included as well. A sample image of house this looks is shown below:

Finally, an overview of how you intend to expand the operations of the business should be included as well. This includes discussing substantial reinvestment into marketing infrastructures, developing new product lines, creating new service lines, expanding inventories, as well as the potential development of additional locations if this is applicable to your business.

Expanded Profit and Loss Statements and Cash Flow Analysis

In this section business plan, it is common to include a profit and loss statement and casual analysis that is showcase monthly for the first year of operation as well as quarterly for years two and three. These charts looks as follows:

Preparing Your Business Plan For Distribution

The vast majority of business plans that are developed are transmitted electronically as either a word or PDF document. We strongly recommend that if you are distributing the business plan that you send as a PDF document as this is locked and cannot be edited by any third party. Additionally, if there is a substantial amount of sensitive material in your business plan then you can create a watermark that acts as a numbering system to parties that have received the document. This will ensure that any proprietary information or intellectual property cannot be shown to a third party. One of the common things that is also included in a business plan is a standard nondisclosure agreement. This can be included in the business plan right under the table of contents or it can be attach as a second document that must be signed by a third party before the business plan is distributed.

If you are planning to submit your document in paper format, then we strongly recommend that you take it to a printer that can put the business plan into a binder or nicely laminated folder. These companies typically charge a minimal fee for printing out a 30 to 50 page business plan and including them in a bound manner.

The Table of Contents

Most business plans follow a 7 to 9 chapter format. How you structure the business plan is completely up to you, but this is the common two types of formats that we use when developing a business plan. The seven chapter business plan our formatting is as follows:

Chapter 1 – Executive Summary

Chapter 2 – The Financing

Chapter 3 – Products, Services, and Operations Overview

Chapter 4 – Strategic and Market Analysis

Chapter 5 – Marketing Plan

Chapter 6 – Personnel Summary

Chapter 7 – Financial Plan

SWOT analysis

Critical Risks and Problems

Reference Sources

Expanded Profit and Loss and Cash Flow Analysis

In a full-scale nine chapter business plan, which include certain elements additional to a standard format a plan we use the following table of contents

Chapter 1 – Executive summary

Chapter 2 – The Financing

Chapter 3 – Products, Services, and Operational Overview

Chapter 4 – Overview of the Organization

Chapter 5 – Strategic and Market Analysis

Chapter 6 -Key Strategic Issues

Chapter 7 -Marketing Plan

Chapter 8 – Personnel Overview

Chapter 9 – Financial Plan

SWOT analysis

Critical risks and issues

Append reference sources

Expanded Profit and Loss and Cash Flow Analysis

Conclusion

Overall you can you can see that developing a business plan is a pretty in-depth and involved process. Generally speaking, it takes about two weeks to four weeks to develop a proper business plan. Professional writing services, like the ones that we offer on a customized basis typically take about a week to complete. One of the ways that you can greatly expedite this process is by acquiring a template that already has the necessary market research and financial model ready to be modified.

On this website, again, we have 550 different business plans that are all specific to their title. Each of these plans includes all the necessary industry research, economic analysis, and Excel model that would be needed to complete a business plan on your own. In areas that you need to determine on your own, we provide a comprehensive guide on how to most effectively complete the sections of the document.

In closing, thank you very much for taking the time to read this article and we always encourage everyone who has any questions to leave feedback in the comments below or you can email us directly at info@bizfundingresource.com. You can also reach us during normal business hours via the live chat.

Talking with Investors

For many specialized startups, the only way to obtain funding is to work with a private investor or related group. Most banks and financial institutions will not extend credit to a startup unless the founder has substantial collateral for the loan or line of credit. To this end, many of these entrepreneurs seek to acquire equity funding in exchange for a negotiable percentage of a business. Most importantly, when you are talking with investors it is important to note that you should have a CPA and an attorney work with you in order to ensure that a proper negotiation is taken place. Your CPA can help you greatly as it relates to issues pertaining to valuation. This is especially important if you have developed proprietary technology (including patented technology).

The vast majority of private investors want to see both a pitch deck and a business plan. Usually, they will review the pitch deck first in order to get an overview of what you are looking to achieve. Most pitch decks range in length from 10 to 15 slides. It should not be any longer than this as it is designed to pique an investor’s interest. The business plan is where most of the information regarding how your company will operate can be found. The business plan should feature three to five year financials (profit and loss statement, cash flow analysis, balance sheet, burn rate, and breakeven analysis). It should also include full industry research specifically geared towards what you are looking to achieve. The business plan should also have sections that discuss what will occur if things do not go according to plan. This is important as it will indicate to the investors that you understand that there are going to be numerous hurdles that must be mounted before your company becomes profitable. Exit scenarios for both the investor and the company as a whole should also be clearly defined in this document. We have a number of documents on this website that showcase potential exit strategies for a variety of different types of businesses.

Once you begin your negotiations with an investor, this is the time where your attorney should be actively involved with the process. They will ensure that all of the necessary investment terms are clearly spelled out within the contract as well as all matters pertaining to contingencies. A properly produced investment contract will mitigate any potential legal matters that may occur down the road. Your attorney may also draft out your operating agreement.

One of the other factors that you will need to consider with your attorney will be corporate structure. This is something that only a qualified attorney can assist you in determining as each entity has its benefits and drawbacks. The limited liability company (LLC) is the most commonly used structure, but this may not fit in with what you are looking to achieve. A simple discussion with a qualified business attorney will ensure that the business is properly formed to receive capital from a private investor.

On a side note, the vast majority of private investors are going to want to acquire an equity interest in the business. Often, many entrepreneurs feel that they can acquire a private loan from these entities but it is rarely the case. They are going to want to obtain the capital appreciation and potential dividends that come from a successful business over a long period of time. As such, you should plan ahead for this very likely scenario when you are developing your business plan. As such, it may be in your best interest to have a formal valuation completed so that you can properly negotiate with a private funding source in regards to what equity percentage will be provided to a private investor. However, this can be expensive. Many proforma valuations can have a cost of $2,000 to $10,000 depending on the scope and scale of the study. Another document that is usually accompanied by a proforma valuation is a feasibility study. This overview focuses on whether or not the business can achieve profitability based on a number of different factors (including market size, number of competitors, etc.). Much like a proforma valuation, a feasibility study can range from $5,000 to $10,000 depending on the scope and scale of the project. It is important that you find someone that has extensive experience in your field as a consultant in order to have these issues addressed appropriately.

Another consideration when working with an investor will be to determine what would occur in the event of a business liquidation. Most importantly, some investors want to ensure that nearly all of their capital will be returned in the event of a business failure. The terms of your investment contract may include providing the investor with all tangible assets in the event that things to do not go as planned. These are further issues that your CPA and attorney can guide you with as you progress through this process.

After the contract is signed, the funds are usually deposited into the corporate account (all at once or in steps) within a few business days. From there, your business has officially launched. Good luck with your new venture!

SBA Loan Overview

A small business administration loan can aggressively assist a new entrepreneur or an established business owner with expanding or developing their operations. The SBA was founded to provide loans to smaller businesses given that many banks have in the past reluctantly shied away from providing large amounts of credit to small business owners. This is primarily due to the fact that small businesses do carry a significant amount of startup risk and operating risk. As such, the government created the small business administration in 1953 with the intent to provide guarantees to individual borrowers so that a bank would feel far more comfortable providing capital to them. Most financial institutions love SBA loans given that approximately 80% to 90% of the total amount of principal is guaranteed by the federal government. As such, banks are able to generate a extremely high return on their investment as it relates to the capital was at that is at risk. Generally, most SBA loans carry a premium of two to five points over the prime rate. If there is a tremendous amount of collateral involved in the loan rate is typically two points over prime. One of the most important things as it relates to obtaining an SBA loan is that a properly developed business plan is going to be required. In almost all instances, lending banks require that a three-year financial statement is provided. This financial statement needs to include a cop and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page.

Small business administration also requires that a complete demographic and competitive analysis is submitted as part of the overall loan application. One of the important things as it relates to developing a SBA loan package is that the owner is going to need to not only develop a comprehensive business plan but is also going to provide comprehensive financial statements as it relates to total assets, total liabilities, income in each of the last two years, and the anticipated revenues and profits generated by the business during the three-year period. This is one of the things that many entrepreneurs struggled to develop given that it is very hard to determine what the anticipated revenues and profits of the business are going to be when it is done on a pro forma basis. One of the ways that this issue can be remedied is that a business plan writing firm can be hired to assist the owner with the developing the documentation that is going to be required by the bank.

SBA loans are going to continue to increase in popularity over the next 10 years given that more people have turned to entrepreneurship rather than working for another individual. The Congress and federal government have worked to ensure that these loans can be provided quickly and with. One of the things that is interesting that has been developed over the past 10 years is the SBA express program which allows for much more streamlined lending protocol for companies that are seeking $100,000 or less. If these types of financial instruments are completely appropriate for individuals such as freelancers, attorneys, people starting small retail locations, and service-based businesses that do not need a substantial number of assets to commence revenue-generating operations. A CPA can be consulted in order to have a good understanding of what loans may be appropriate for any specific financial situation.

Prior to submitting a package to the SBA lending bank, a CPA should review all documentation including prior tax returns to make sure that they are accurate. The SBA typically takes about 60 days to 90 days to render their decision as it relates to issuing a guarantee for the business. Once this guarantee is acquired and then the individual can take it to any number of SBA enrolled lending banks in order to obtain a business loan. These financial institutions may require additional documentation beyond what was requested by the small business administration. As such, it is important to have all of your financial matters in order so that if there are additional requests for information they can be fulfilled very quickly. Generally, from start to finish it takes about three months to four months to acquire a SBA loan for a new business or for expansion purposes. These financial instruments are also available for individuals who are purchasing existing businesses.

Banks and the small business administration love to lend to individuals that are looking to acquire an existing business given that the risks related to a startup are eliminated. In the event that an entrepreneur requires a company they’re going to required to submit tax returns as well as a business plan. Beyond these two documents, full tax returns for each of the last three years for the company that is being acquired needs to be provided as well. The owner of the business that is being sold should furnish either the entrepreneur or the business broker with all necessary documentation so that an SBA guarantee can be acquired quickly once all other documentation has been produced.

The small business administration has developed very good programs that actively assist entrepreneurs with launching new business operations. They will remain as one of the mainstay government departments that assists with entrepreneurship and the development of small business and employment within the United States. Although control of Congress and the presidency changes hands quite frequently – almost all politicians are committed to the continued advancement of small businesses given that they create jobs in local communities.

Industry Research for Business Plans

One of the more challenging sections to write for a business plan is the industry research, economic research, competitive analysis, and demographic section. Generally, this section of the business plans referred to as the market and strategic analysis. One of the primary issues that most people have in regard to this matter is sourcing the industry research specific for their business. Also, many people often have difficulty determining what industry there and given that they may offer a number of different products or services through one corporate entity. The best place to start is the US Economic Census as it provides a complete overview of every single industry within the United States. This census overviews all of the revenues, aggregate payrolls, and aggregate expenses that these businesses have within the country. You can look up what industry you’re involved in simply by entering keywords into the website or by looking up the NAICS or SIC number. Typically, this information is compiled every five years. Most banks and financial institutions do compare the anticipated revenues of the business to industry-standard figures that are available on this platform. There are also a number of different private information sources that can be used and can be easily found on the Internet. However, privately sourcing market research information can be extremely expensive. Specific industry research reports can often range anywhere from $50 all the way to $2,000 depending on the depth of the market research.

As it relates to the economic analysis, many people mistake this for an overview of how their business will do in any economic climate. While this is a component of the economic analysis, a specific focus should be paid as to how the economy is doing as a whole. This includes over viewing unemployment rates, interest rates, how the stock market is doing, the housing market, and other major indexes that view the health of the economy. There are a number of publicly available information sources where this information can be found. Additionally, many good entrepreneurs always keep tabs on how the economy is doing as a whole given that it will assist them in planning for any positive or negative changes that may occur. This is especially true among businesses that rely heavily on debt capital as part of their day-to-day operations as rises in interest rates can significantly impact a businesses profit and loss statement. If you are uncertain as to develop this type of information for your business plan you may want to speak to a business plan writing firm or a certified public accountant who can assist you in making these forward-looking financial statements.

The demographic analysis portion of this document is somewhat easy to develop given that you know who your target customer is going to be. In this section the business plan you should outline the anticipated annual household income, median family income, median net worth, age, gender, and any other defining characteristics of the customers that you will be targeting. Almost always, this section of the business plan is developed in conjunction with the marketing plan given that specific demographics use specific channels to get their information. If you are having difficulty with the section of the business plan that you may want to speak with a marketing firm that can assist you in developing this type of documentation. Many marketing firms maintain huge databases of demographic profiles that they can tap in order to provide you with who they feel is going to be your most likely customer.

The final section of this analysis typically deals with competitors at the business will face on a day-to-day basis. For local businesses, this information is usually easy to obtain given that the owner is aware of other companies that provide similar services. For Internet-based businesses and companies that operate on a regional or national level – this information can be a little more difficult to gather given that there may be tens of thousands of competitors within the market. Usually, only the largest competitors are discussed by name within this section of the business plan. One of the other things is often discussed are going to be the competitive advantages that the business will have over other service providers. Competitive advantages often include being able to provide a product or service at a lower cost, being able to operate more time effectively than competitors, and related information to why the business is better than other businesses. Of course, an entrepreneur should spend a significant amount time analyzing the competitors and how they can either emulate similar services or provide better services at a lower rate.

In closing, the section analysis usually takes the most time and if any part of the business plan with the exception of the financials. Usually, most business plan writing firms actually complete the market and industry research first before they write the rest of the business plan. This allows the entrepreneur to get over the most difficult section of the document while thinking about the ways that the business can be highly competitive as compared to other market agents.

Feasibility Studies vs. Business Plans

Often we asked about the differences between a business plan and a feasibility study. As it relates to the business plan, this document is specific for raising capital and showcasing what the business intends to do over a three year to five year timeframe. Additionally, the business plan features information regarding the anticipated financial results within a comprehensive financial model. Almost all business plans feature a profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. The business plan also features a significant amount of industry and market research specific to the type of business that is being operated. One of the other things that is found within a business plan but not within a feasibility study is a comprehensive marketing plan in regards to how the business intends to acquire customers. The business plan itself should be considered one of the sales document for a potential funding source or a business partner. Additionally, a business plan does not contain any of the legal risks or legal disclosures that would be normally found within a feasibility study or a private placement memorandum.

A feasibility study on the other hand focuses much more on the detailed operations the business on a day-to-day basis. Issues that are covered within the feasibility study consist of legal risks, operational risks, economic risks, and related financial risks. As relates to legal risks, a feasibility study will outline the potential liabilities that the business may have as it progresses through its operations. For instance, a medical practice feasibility study may focus significantly on the risks relating to rendering services as it relates to malpractice claims. Additionally, using the same example of the economic risks associated with this type of business could include changes in regulation and impact Medicare or Medicaid reimbursement. These are all things are much more thoroughly discussed within a feasibility study and a business plan. Often, many entrepreneurs in conducting a substantial amount of due diligence will focus on developing both documents so that the business plan can be used for raising capital while a feasibility study can be used for addressing all the risks and issues at the business may have as it develops its business operations. Most business plan writing firms do not provide feasibility studies as this is something that is usually completed by an economic consulting firm. An economic consulting firm has a much greater understanding of the detailed day-to-day operations of the business rather than just focusing specifically on how the business will be using capital that may be raised and the anticipated financial results.

Much like a business plan, a feasibility study usually has around 4 to 5 chapters that goes in depth for each of the issues that needs to be discussed and examined by the entrepreneur. Foremost, one of the things that these two documents to have in common is at the industry and market research is usually included in both documents. Although some economic consulting firms will omit the industry research section – it is generally considered to very important so that a individual reader understands the direction that the industry is taken for any specific type of company. One of the other things that is much more thoroughly discussed within the feasibility study is the critical risks and problems with the company. This includes a very detailed overview of each potential risk that the business will have and how the entrepreneur will work to remedy that problem. Generally speaking, most feasibility studies run about 30 to 40 pages depending on the complexity of the business. Companies that have very complex operating procedures can even have feasibility studies that run upwards of 100 pages depending on the scope, scale, and size of the organization.

Most entrepreneurs who are starting a small business like a new retail location or a small service company do not really require a full feasibility study. These analysis are typically done for much larger scale organizations where potentially millions of dollars to be put at risk for the development of a new operating segment, development of new business, or expansion of existing operations. Typically, a feasibility study usually takes a month to complete foremost economic consulting firms that engage in this type of business. As relates to cost, a feasibility study can run anywhere from $1,000 following a $50,000 depending on the size of the organization and how in depth the feasibility study needs to be in order to clearly outline risks and strategies.

Credit Scores and Business Plans

The things that is often brought up to us is whether or not a discussion regarding individual’s credit score should be put within the business plan. Usually, when we develop a business plan on a customized basis for a client we do not include information regarding the individuals personal credit. This is primarily due to the fact that the individual bank or financial institution is going to pull all three major credit reports when they are examining the loan application. However, especially for service-based businesses there may be times when it is appropriate to discuss the underlying credit of the individual borrower directly within the business plan. This is especially true if the individual is applying for a small business administration loan given that the credit score is going to be a very important factor when making a lending determination. As a whole, most banks consider three primary factors when developing and reviewing a loan application. First, they thoroughly review the business plan to ensure that the business is going to be able to remain economically viable in most economic climates. This includes an overview of the anticipated revenues, expenses, and pretax profits. It is important within the business plan to show that the business can satisfy the debt obligation by more than 20% per month within the first years of operation. Most banks and lenders focus substantially on the ability of the individual entrepreneur to make timely monthly principal and interest payments regardless of how the business is doing.

Second, the loan officers or lending committee will look very thoroughly at the individual bar themselves in regards to their experience, educational background, and their ability to effectively operate the business on a day-to-day basis. Most people that seek small business administration loans or conventional business loans are new entrepreneurs. The small business administration programs were developed specifically so that newer and younger entrepreneurs could have access to affordable credit. This is going to be one of the key factors moving forward as it relates to the federal government support of these programs. One of the nice things about getting a small business administration loan is that the terms are flexible especially for an entrepreneur that does not have a substantial amount of experience operating businesses on a day-to-day basis. Most importantly, a full resume and biography should be included within the business plan so that the bank has an understanding of the individual’s ability to effectively bring a new enterprise to profitability with a positive cash flow within the first 24 months of operation. If this is specific for a professional practice, such as a dental practice, then a substantial amount of information regarding the practitioners history and their ability to render services to the public should be included as well.

Third, there is going to be an examination of the collateral that is going to be used for the loan. Most banks and lenders strive to have his much collateral as possible so that in the event of a default they are able to recoup their investment. Common types of collateral include real estate, furniture, fixtures, related equipment, retirement accounts, checking accounts, 401(k) accounts, and any other asset that has a salable value. For SBA loans, most banks want to see that at least 80% of the loan is collateralized. This is why a 20% capital injection is typically needed by the borrower in order to ensure that the bank is comfortable providing this investment to the entrepreneur. Of course, one of the other frequent questions we get is whether or not the individual entrepreneur is going to need to provide a personal guarantee for the loan. The short answer is yes. Almost all banks and lenders require that the individual entrepreneur personally undersize the loan in conjunction with their company. After the credit crisis of 2008 and spanning through a recession for three years – most banks have implemented much more stringent lending protocols so that in the event of a default the bank is able to recoup a significant portion of the loan. This is one of the things that an entrepreneur should discuss with their certified public accountant given that when a small business administration loan is undertaken – a substantial amount of the individuals personal assets can be put at risk. As such, it is up to the entrepreneur to make an appropriate determination as to what they consider to be a can reasonable risk for their personal assets. Many people have a significant amount of concern specific for their primary residence. This of course could mean that a house could be lost in the event that a business fails. As such, it is important that the entrepreneur determine whether or not they consider this to be acceptable risk.

In closing, lending is a very complicated process especially for small businesses given the high-risk nature of these operations. The small business administration seeks to alleviate some of the risks associated with banks providing small business loans by issuing guarantees. However, it is still very much incumbent upon the entrepreneur to have an airtight business plan that will ensure that even if revenue targets are not met the business is able to satisfy the underlying debt obligation. This is going to be something that we continue to discuss on this website also focusing on how to properly develop a business plan that is specific for a SBA lending bank.

Business Plans for Private Investors

Sourcing capital from private investors is one of the ways that many businesses launch their operations. This is especially true for service-based businesses or very young entrepreneurs had to not have the same access to credit as an established company or an older person. As such, many individuals will turn to professional private investors, friends, and family in order to source the capital they need in order to develop the business operations.

First, we are going to discuss working with friends and family. In many cases, a new entrepreneur will work with friends and family by sourcing a business loan from their relatives. There are a number of benefits as well as a number of drawbacks relating to this type of capital raising activity. Foremost, when you’re working with family it is imperative that you have a promissory note or investment contract in hand in order to bury clearly spell out the terms of the investment. As most people do seek a loan rather than an equity investment from their relatives – it is important that a promissory note is issued so that it is clear that the individual family member is not receiving an equity percentage in the business but rather a interest payment that will be made on a monthly or quarterly basis. There have been a number of instances where a family member has lent money to an entrepreneur thinking that they were receiving a percentage of the business. In turn, some of these businesses have become very successful where an equity stake would be worth several hundreds of thousands or millions of dollars. Many times these issues have been brought before courts given that they are our more of a handshake deal rather than a formal contract. As such, it is imperative that an attorney draft a promissory note related investment contract depending on the terms of the investment and whether or not the individual will receive an equity participation.

One of the other issues that can arise working with friends and family is that there can be bad blood if the business does not perform well. If a family member or friend lends a substantial amount of money to an individual entrepreneur and the business fails and the person is unable to repay the loan and this can cause a substantial amount of friction for the personal relationship. As such, it may be in the entrepreneurs best interest to source small loans for a number of different sources. In this case, even if things do not go well at all and the individual who lent the money will provide the initial investment is not out a tremendous sum of capital. In our experience having worked with several thousands of clients for the development of their business plans, most entrepreneurs to try to stay away from borrowing or receiving capital from friends and family given that they do not want to create any level of strife or friction within the personal relationships. Of course, this is not always the case in many other words have developed extremely successful businesses by sourcing money from their close friends and family. It is solely up to the individual to determine whether or not this is the best way to go about things as relates to starting a new business.

A private investor typically wants less capital invested a less intensive rate of return. Most importantly, most individual private investors – or angel investors – typically do seek an equity percentage is significantly below that of a venture capital firm or private equity group. This is primarily due to the fact that most angel investors make investments ranging anywhere from $25,000 to $200,000 on an individual deal by deal basis. Most venture capital firms, private equity groups, and other private investment vehicles seek to invest millions of dollars into each project that they source. A private investor is going to want to see a return of 15% to 25% on their money on a year on year basis. This is also significantly lower than what a venture capital firm seeking that they typically want to have any lice returns of 30% to 50%.

As with any type of investment, an attorney should be hired to develop the contractual agreement between the private investor and the entrepreneur. While it may add to a slight expense as relates to the capital raising process, a very well-written contract that clearly states what everyone is entitled to is imperative in order to avoid potential litigation in the future. There have been numerous instances where angel investors claim that they own a much larger share of the business based on their initial investment. A well-written contract ameliorates all these risks given adequately spells out each percentage owned by every individual or third-party entity. In many cases, an angel investor will also provide advice and counsel as relates to the ongoing growth and development of the business. This is one of the benefits to working with a private investor, especially one that is a seasoned entrepreneur, given that they can help guide the business to profitability during those early and difficult years. In many cases, this advice is provided on the incidental basis although some angel investors do take a seat on the board of directors or maintain a consulting contract the company as a means of generating secondary revenues. This is one of the keys that can be discussed during the negotiation process when working with one of these individuals.

When working with a private investor, an extremely well written business plan should be provided to them so that they understand your vision for growth and how they and how you intend to grow the business over a three-year to five year timeframe. This business plan should contain all of the standard elements that would be normally provided to a financial institution including a profit and loss statement, cash analysis, common size income statement, balance sheet, breakeven analysis, and business ratios page. The business plan should also contain in-depth industry research as it relates to trends within a specific market they will be operating within. Many entrepreneurs also develop an expansive marketing plan that accompanies the business plan so that the private investor can understand how the business will position itself within the market, obtain customers, identify the customers that they are seeking, and over viewing any competitors within the market at the business will face on a day-to-day basis. Although this difficult document to write, there are a number of consultants and writing firms that can assist individual with developing their business plan and marketing plan.

In closing, private investors are a great way to raise money for a new business. Generally, they do not consider the individual entrepreneurs underlying credit score when making an investment decision. Private investment funds typically focus significantly on the economic viability of the business rather than the businesses ability to make monthly interest and principal payments. Working with private investors also allows the business a much greater timeframe for becoming profitable given that most financial institutions want to see that profitability is reached within the first six months to twelve months of operation. Again, the key focus of when working with a private investment firm one individual angel investor is to make sure that there are significant legal safeguards in place so that the investment contract clearly states who owns what, the expectations of the business, and the patience of the individual entrepreneur.

Business Plans and Private Securities

A business plan is not a legal document. It does not have the necessary subscription agreement, securities disclosures, and other risk disclosures that are needed in order to act as an investment contract. One of the key differentiating factors between a business plan and an investment contract is that the investment contract must be produced by an attorney. Although there are some businesses out there that are able to develop what is called a private placement memorandum – this is a very specific type of legal contract that should only be drafted by an attorney that has substantial experience with securities laws. Almost every state as well as the federal government – through the securities and exchange commission – has extensive rules and regulations as to what constitutes a security and what disclosures must be made to a private investment source such as an investor. Additionally, there are instances where only certain types of investors – commonly called accredited investors – are able to make a man investment into a small business were related startup.

These protections are put in place so that only the most qualified and most sophisticated investors can understand the risks associated with this type of investing. Most importantly, it is imperative that the accredited investor declare themselves to be so in order to avoid any type of issue where an entrepreneur is raising capital through individuals who do not meet this qualification. A qualified securities attorney can walk an entrepreneur for all the ins and outs of developing documentation that is specific for raising capital from private investors.

At the time of this writing, and accredited investor is an individual that has a net worth of $1 million or more or predict makes an income greater than $200,000 per year and anticipates that they will do so in the coming future. Among married couples, this minimum income increases to $300,000 per year. Corporations, trusts, and other nonhuman entities are generally required to have $5 million in assets before they are able to invest in specific types of private securities funded businesses.

However, there are constantly changing regulations and laws that relate to how an entrepreneur can raise capital and from which type of investors. As such, it is imperative that the entrepreneur work with an attorney before engaging in any capital raising activities. Additionally, only a highly qualified attorney can make an appropriate determination as to whether or not a private placement memorandum is going to be required for any type of capital raising activity.

Not all start businesses that are looking to raise capital from private investors are required to have a private placement memorandum. As such, these types of deals are typically involved when the capital raising occurs from one investor, a venture capital firm, a private equity group, or through a bank. These entities and very wealthy individuals are exempt from the laws that pertain to. Again, it is definitely going to be in your best interest to still have legal counsel on hand especially given that there’s going to be a significant negotiation. Where there is a determination of what percentage of the equity of the business is going to management versus private investors. There are also going to be bylaws and other legal instruments are going to be implemented in order to develop this type of business. As such, business plans are not considered to be an offering for private securities because they do not have the appropriate disclosures were other accoutrements that are normally associated with a private placement memorandum. This is going to be one of the ongoing things that we discussed throughout this website given that many entrepreneurs are often looking to raise capital from private sources rather than approaching a bank for a loan.

After the Business Plan is Completed

One of the frequent questions that we often receive here is what to do with the business plan once it is complete. At this point you are probably invested tens of hours if not hundreds of hours into the development of your business plan in regards to showcasing what you’re looking to do, how much money you’re looking to raise, and with the anticipated financial results of the business will be over a three-year period. You have put your blood, sweat, and tears into this document and now you are about to begin the capital raising process. This is usually one of the more anxiety provoking parts of the of starting a business given that you are actively seeking funding in order to buy the assets to start your company’s operations.

First, once the business plan is complete it is imperative that is what is reviewed by a certified public accountant. This professional will review the business plan, make notations regarding the financials, and make sure that any financial statements within the document or in line with generally accepted accounting principles. This is important to note as many banks as well as investors are going to want to thoroughly review the financials before they render a lending or an investment decision for your business. One of the important things that the CPA will do as well will be to make sure that the financial model that you developed falls in line with industry standards. Many banks will often compare financial models produced by individual entrepreneurs to existing databases of similar companies. As such, it is important to showcase any potential revenues, expenses, and profits that are in line with other companies that operate within identical or substantially similar industries. If you are having trouble with this aspect of your business plan then you can hire a consultant that will allow you to see sample financial statements of similar businesses within the market. The United States Economic Census provide this information for free on their website. A CPA will properly advise you as to what potential changes may be needed once they have reviewed the document. This professional can also compare your company to other similar businesses in the market.

If you are raising capital from an investor and you are also going to need to retain an attorney in addition to your CPA. Your attorney can review any terms that you outlined in regards to the business plan as it relates to an equity share or profit share. Additionally, your attorney can also develop the investment contract that will be needed between you and any potential funding source. This is often where many people get themselves into trouble given that many new entrepreneurs will raise capital from friends and family via alone or as a small investment. Even if you are raising capital from people close to you – it is important that you have an attorney develop the contract so that any discrepancies or issues that arise can be remedied through appropriate legal means. If you’re looking to raise a substantial amount of money from a number of different investors and an attorney can also draft a private placement memorandum for you as this may be required by your state as well as the federal government. Only a qualified attorney who has extensive experience in the field of securities law can make a determination as to whether or not your business is going to need to have a private placement memorandum. These documents are usually used when individual shares are going to be sold directly to investors on a private basis. This is important to note as there are also companies known as private placement brokers that can assist in entrepreneur with raising the capital they need once the private placement is complete. On a side note, a private placement memorandum or PPM is expensive. Most entrepreneurs report that they have spent somewhere in the neighborhood of $4,000 to $10,000 on having a qualified securities attorney develop this documentation on their behalf. As such, it prior to developing a business plan specific for a number of investors and entrepreneurs to determine whether or not they are prepared to take on the expense of having a private placement memorandum drafted in order to raise capital from a number of different investors. If the entrepreneur is planning to raise capital from a venture capital group or a private equity group as a single investor and usually a private placement memorandum is not needed. However, and again – only did qualified attorney can make this determination for you.

Once you have submitted the business plan to a CPA as well as an attorney, you may want to hire a business consultant to review the business plan so that they can read as if they were the investor. This individual can provide you with substantial notes as to what they see is a strong aspect of the document as well as what some of the negatives are. It is important to get as much feedback as possible from qualified business consultants, other entrepreneurs, and executives that have familiarity with the industry and that they will able to provide you with advice that appropriately guides for business development. Of course, any advice should be taken with a grain of salt. This is especially true among colleagues that may be reviewing the business plan alongside you. One of the other things that you may need to know within when having the business plan reviewed is whether or not you’re coming off with a good sense of clarity as to what your business is looking to achieve with the capital you are looking to raise. This is one of the common issues that many people have when they are developing their own business plan. As such, it is important that a number of people read it so that you get as much feedback as possible. At times this can be discouraging for many entrepreneurs as they will often receive feedback that they don’t want to hear regards to business risks for the overall business climate. However, if taken appropriately then this criticism can be reviewed constructively and improvements to the business plan can be made on an ongoing basis.

There are also a number of not-for-profit organizations that can assist you in developing your business plan or keeping the business plan once it is done. SCORE is a popular organization of retired entrepreneurs and executives that helps newer entrepreneurs and younger entrepreneurs with the development of their entrepreneurial activities. While these executives and entrepreneurs are a very good source of feedback in regards to a business plan they can operate a little bit slowly as it is done for free, part-time basis only. A paid consultant typically will provide you with much more in-depth insight as to what made be needed to your completed business plan.

In short, capital raising is an extremely difficult process and you’re going to need to remain very diligent as there can be heartaches and setbacks throughout the process. It is important to note that only you can make the appropriate determination as to whether or not your business is economically viable and should seek funding. The above the professionals can only advise you as to whether or not the business plan is appropriate to reviewed by a potential funding source.