A while ago I wrote an article titled “Business Plan Structure: 6 Must-Have Sections”. In the article I discussed the sections that every business plan must have in order to answer all the questions an investor or bank needs to see.
Recently, I was asked to record a video explaining how this fits into my full signature method to help established small businesses and startups get funding. So, here’s a quick 5-minute video on how everything fits together…
Hi, this is Pete Kremer. I've been challenged to record a video, and this is the first time I've done it, so I thank you for watching. The fact that you are even watching means that you're investing in the growth of your business, which is a huge step towards your success. In today's video, I'm just going to go through the 6 sections that every business plan must have in order to answer all the questions that an investor or bank needs to have answered, in order to make an informed decision on lending you money.
I use these six sections in every single business plan that I write. And I've helped my clients get approved for $200,000 to 2.5 million dollars in bank loans, and up to 3.5 million dollars in private investment. So these business plan sections really do tell the whole story, if written correctly.
First, before I go into it, I just want to say 30% of small businesses close within the first two years of operations because they don't have enough working capital, they don't have enough money on hand to take on large projects, to hire staff. So when you are seeking funding, you are in luck if you're going for an SBA loan. The SBA approved over 71 thousand loans last year, and provided over 30.2 billion dollars in lending to small businesses, just last year alone. So you are in luck.
However, there is one little thing here. You have to have a business plan. Straight from the SBA website right here, it says "Get ready, before you start talking to lenders, you look through this abbreviated checklist." First thing on here? Business plan, right there. So let's hop into it. I'll go through the six sections that every business plan must have.
First off, section one, executive summary. This is pretty straight forward. But I do have to warn you, most people try and write this section first, but you can't. It's in the name. It's a summary. It summarizes your entire business plan. So really, write this section last. It's just a quick summary of what your business is, your growth plan and everything in a one to two page format.
Section two is your company overview. This gives a bank or lender a snapshot of what you're currently doing, what your corporate status is, what your vision for the future is, what your management team looks like.
And then we're on to section three, products and services. This is pretty straightforward. You basically describe the products and services that you currently offer, and then any planned products and services if you're launching a new product line with the funding you're seeking, anything like that.
Section four is your industry overview. This will give a bank or lender just a view of the industry that you're in. A view of your competition, what they're doing well right now, but also what holes might be in the market that you can capitalize on. And then what advantages you have over your competition, and how you intend to gain more market share.
Section five is your plan of operations. This is a very important section, this is where, when you're asking for a loan, this is how you're going to use the loan. Your plan of operations. This is, "I'm asking for 200 thousand dollars, and this is what I'm going to do with that money."
And then section six is the financial section. This is where you're putting numbers to your plan of operations. So you're going to go over your current financials, provide profit and loss statements, but then also go over your profit and loss projections for the next three to five years.
So if you're asking for 200 thousand dollars, how is that money going to make you grow, and what is your profit and loss statements going to look like after that investment? So those are the six sections that every business plan must have. There is an optional section here, the appendix. If you have supplier contracts or very in-depth standard operating procedures, those can go into an appendix. Because they don't have to be part of the main business plan.
But anyway, those are the six sections. I wanted to go over ... This is where, in my signature system, the six sections lie. In writing a compelling draft and having a rock solid plan. But in order to get to that stage, you really have to pre-qualify and see if you can even qualify for a bank loan. And then you have to, before going and writing these six sections, you go through what you're going to use the funds for, what your growth plan is, what the industry looks like.
Formulate those financial projections, and then you're done with the six sections that every business plan must have.
So anyway, that's my quick spiel on how to write a business plan. If you would like to get clear on next steps for getting a SBA bank loan, feel free to go to my website, petekremer.com, and just book a free strategy session. You can just go to the homepage there and, right there, is book free strategy session
And we can talk for 20 to 30 minutes about exactly what you need to do, right now, in order to gain access to working capital through a SBA loan. Cheers, thanks for watching.