How to create a good business loan plan

Whether you’re thinking of setting up a business, or you’re in the early stages of doing so, having a good business plan is crucial when looking for commercial finance. Not only will this help you to map out the future of your business, it can also make you more attractive to potential commercial finance lenders and investors. Below, we take a quick look at the key components of a business plan and what it should include.

What is a business loan plan?

A business plan is a written document outlining a company’s goals, strategies, and plans to achieve them. You might wish to use your business plan as a ‘tool’ to attract outside investment, obtain funding from lenders and as an internal framework for you to refer to and pull inspiration from. It can help you retain focus on both long and short term projects and help ensure that you remain on the trajectory to success.

If you’re a business start-up, you’ll likely use your business plan to attract lenders and investors. On the other hand, a more established business will use their business plan to map out growth and stay on track.

What should I include in my business plan?

Following a structure for your business plan will ensure you include everything you need to impress a commerical finance proivde. There’s no specified format for a business plan, but certain key elements are essential for most companies. A good business plan will cover the following:

• Executive summary
• Product / Service
• Market analysis
• Business goals & strategy
• Financial forecasts

Executive summary

The executive summary is an overview of your business. It introduces the company and includes its mission statement along with information about the company’s leadership, employees, operations, and locations. The executive summary also highlights the most salient points of the entire report and so can be written last, once you have completed everything else.

Products and services

Here you can describe the products and services the company offered by your company, or those that will be offered. This section will usually include details on pricing, product lifespan, and the USP (unique selling proposition) of your product. You may also wish to go into more detail on the production, manufacturing and any patents relevant to your product/service.

Market analysis

You should demonstrate a thorough understanding of your industry, target market and any competition you have. This is another opportunity to show how you can meet customer needs and how your business stands out in the competitive landscape.

Business goals & strategy

In short, business goals and strategy is setting out what you want to achieve, and how you plan to do it. Outline your business objectives and stipulate how you intend to achieve them – this can include things like marketing strategy.

Financial plans and projections

Be sure to include a detailed overview of your business finances, with cash flow statements and balance sheets. New businesses should provide financial targets and estimates for the first few years. If you’re looking to secure funding – this is where you can stipulate that.

FAQS: Business Plans in the UK

Why is a good business plan important?

A business plan can help you achieve your goals, secure funding from commercial finance institutions or potential investors and allow you to spot opportunities – or obstacles – before they arise.

How to write a good business plan – is there a template I can use? 

There are lots of great resources for business plan templates available to download online. One example is this extensive business plan pack from The Prince’s Trust.

Where can I find an example business plan?

There are a few example business plan documents available to view here, they include an Airport Cafe Example Business Plan and one for Stone Importers Ltd. While they shouldn’t be followed to the letter, they do help give an idea of where to start and what your finished product should look like.

Do I ever need to update my business plan?

Yes – it is good practice to review and update your business plan periodically, especially where you have achieved your goals. If you plan to move in an entirely new direction, it might be worth drawing up a new plan to suit.

Commercial Finance for SMEs in the UK

Having a watertight business plan will allow you to navigate the peaks and troughs of business ownership. It may also help you access business finance in the UK. There are different types of business finance, each designed to help SMEs like yours thrive, grow and adapt to changes. Funding may also be used to help you actualise the strategy mapped out in your business plan, taking your operations to the next level and boosting your bottom line.

Want to bring your business plan to life? Chat with an expert today.

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