How to Obtain Financing For Your Startup Small Business

How to Write a Business Plan for Obtaining Startup Financing

The process of starting a business is bound to have various road blocks and speed bumps. One of the more challenging hurdles in the process is finding the money necessary to get your idea off the ground. Unless you are already an established and well-connected businessperson, convincing an outside investor or financer to help you get off the ground will be a daunting task.
 
Why? Because you are a risk. There are certainly several (if not hundreds) of small businesses out there that already provide the services that you are looking to offer. What will make you different? And what will allow you to succeed?

You have various options and tools at your disposal, but regardless of what avenue you chose to pursue to get your funding you will certainly need a well articulated business plan. It doesn’t have to be elaborate but it must convey careful thought and consideration, vision and realistic expectations.

Your business plan should cover your target market, how and where you will start your business (including cost projections) and estimates of overhead and product/services pricing.
As I said earlier, you have several avenues for soliciting financing; most importantly the Small Business Administration whose mission is to encourage and aid the success of small businesses. The SBA offers a variety of loan plans to help small businesses.

Obviously banks offer business loans and there are also venture capital firms whose business is investing in startup businesses. 

Following are 5 simple steps to writing a business plan for the purpose of acquiring financing.

5 Easy Steps to Writing a Simple Business Plan

1.   Mission Statement: Your opening statement should discuss your goals and vision for your business. You should incorporate what need your business will be filling within the market. You should include an explanation of what market it is that you are entering, the market size and an understanding of how the market operates. Perhaps the most important aspect of this section is an estimate of costs for getting your business off the ground and a selling point. Explain what makes your business unique and different from others like it.

2.   Startup Costs Breakdown: In the opening you will present simply a figure of how much it will cost to get your startup going. In this section you will break down that number into its components. If you don’t already have a location contact landlords, other small business around your area, and look for real estate availabilities to get a feel for housing costs. You can contact utilities providers to get an estimate on pricing. Research what equipment you will need to buy and how much it will costs. How many employees will you need to hire? How much will they be earning? Calculate all these costs and outline them in your business plan.


3.   Market Research: Include an evaluation of businesses that will be your competition. What do they do well? What can you do better? Estimate their gross income and include a brief history. Understanding your competition, after all, is your key to success.

4.   Products/Services: Outline the products or services you intend to offer and how much you will charge for them. Be sure to include how much it will cost you to obtain and offer these products or services.

5.   Risks and Struggles: Business doesn’t always go as planned and just because you plan something out carefully doesn’t mean it will always be magically successful. Pitfalls and hang-ups will happen. Attempt to predict what could possibly go wrong with your business. Be objective. If you are aware of possible problems you will be better equipped to solve them.

Just like writing a resume, you should cater your business plan and presentation to the audience. PowerPoint slide shows are very visually stimulating and easy to create. The key to really enticing investors or convincing a bank to offer you a loan is showing realistic goals and expectations, and an understanding of your market.

The industry market you will be entering is obviously greatly influenced by your geographic location. Communities in Florida have very different needs than those in Colorado, or Massachusetts. How you understand and cater to these needs and these differences will influence the success of your business and the interest of investors or banks.