Womans Corner
Articles and Information for Working Women and Family

What IS A Business Plan? Market Analysis?
by Debbie, aka AlbertaRose

A business plan is generally the first thing your banks manager|loan officer will ask for. What is a business plan? It's your business idea and forecasted sales. Oh, they usually ask for a Market Analysis as well!

Before any bank will just hand over money, they need to know exactly what you plan to do with it - on paper. They also like to know how you plan to pay back the loan, how much will it cost to operate your business and what you need to purchase to get your business started. What are your sales predictions for the first year and how did you arrive at those figures? Have you talked with anyone or done a market analysis?

They need to know if the product or service you'll be selling is marketable and what research you have done to verify your conclusions.

Banks also like to know what you're willing to put up front to show that you're genuinely serious about your new business.

Are others running a similar business? What is their success rate? Is there a large enough market for you and them? And the list goes on...

You'll feel like giving up before you even get started! But, don't panic yet! Most loans officers are more than willing to help you through as much as they can. IF you have a good business idea.

So, What IS a Business Plan?

A business plan is an outline of your business idea and there are several ways to go about making one. But the best business plans involve professionals. Someone who knows exactly what information your bank will be looking for.

Not everyone can afford to hire a professional. So here are a few pointers to help you do it yourself:

• Why do you think your business idea is good enough for them to loan you money? Write a brief explanation of your "strategy for success".
  
  
• Do some marketing research and find out if your business is a marketable commodity in the community. If so, what is the percentage?
  
  
• The bank will need to know WHAT your product or service will be.
  
  
• Who will be involved with your business and what are their qualifications for selling your product or service? If your experiences lie in the field of landscaping, selling pharmaceuticals probably wouldn't be within your field of knowledge.
  
  
• List your operating costs: utilities, fees, office rental, etc. The bank will need a forecast of your expenditures and incomes. Be realistic. Don't be like the spammers and anticipate hundreds of thousands of dollars to be rolling in by Monday! They'll say good-bye, escort you to the door and lock it behind you!
  
  
• Your Estimate. They will need an estimate of how much money you think you'll need and how you plan to spend it. Include all operating costs and start-up costs for the first year.

If you're considering starting a business, you must be willing to give it time. Most businesses take a minimum of two years to become solvent. So often people quit just as their business is beginning to take hold. So, be patient, be frugal, focus on your goals, and give it 100% effort.

Never give up!