Posts in category: Business Advice

A solid business plan does many things for a business owner. It provides a clear road map which outlines the future of the business. It sets goals and holds a business owner accountable to them. It explains what the company is, who it serves, and how it works. It is the overall what, why, and how of a company. And perhaps most importantly, a business plan can make the difference between getting gaining crucial funding for equipment leasing or not.

What is the information that goes into a business plan and makes equipment financing lenders become interested in your business? What exactly do they look for, and what convinces them to approve your application?

Here are the seven components of a business plan, and what your potential funders will be looking for when they go through it.

Executive Summary:

This is a brief summary of your business, and should also compact all the important information of your entire business plan into a relatively short overview. It summarizes the highlights of the other sections of your plan, so a good rule of thumb is to write it after you’ve written all the other parts of the plan so that you can add the important ideas from other sections. This is most likely the first thing that your potential lenders will see, so it needs to be exciting, engaging, and informative—but not too lengthy.

Business Description:

This section explains what your business is, and what it does. It should state when the company was founded, where you are located, your mission statement, your business model, the legal structure, and your projected growth. These answers will tell your story and will help equipment financing lenders connect to you, as it will show them how you’re viewing your venture.

Market Analysis:

Your market analysis section is where you take a look at your market as a whole, where you fit within it, and why you stand out against your competitors. Be sure to include information on your target market, your customer personas, and testimonials (if you have them). The market analysis section is also the perfect place to answer the questions that your value proposition asks:

• What are you solving for your customers?
• How are you solving it?
• Who has the problem?
• Why do your customers care if you solve it?

This section is important to equipment financing lenders as it will teach them about your market and how you will impact it.

Organization Management:

This section is a great opportunity to impress equipment financing lenders. Be sure to spotlight the expertise and qualifications of each member of your team. Equipment financing lenders will be more likely to approve your application if a company has a competent, qualified staff. It’s the ideal place in your business plan to brag.

Sales Strategies:

The sales strategy section is very important for equipment financing lenders. It’s where you explain in detail how you will utilize marketing efforts such as social media, press releases, search engine optimization, web design and development, and more to raise money with your business and make profits a reality. You will describe your price strategy and will also detail the promotional strategies you’re currently using, along with strategies you plan to implement later on. This section shows that you have carefully considered how to using sales to grow revenue and in turn be able to pay your equipment lease payments.

Funding Requirements:

Here’s where you will ask for the amount of money you need from potential equipment financing lenders. In this section, it’s important to be as realistic as possible, and to also include information for a best-case scenario as well as a worst-case scenario.

Financial Projections:

Another very important section for potential investors, the financial projections are where you summarize any successes up to this point and make forward-looking projections. The projections should be based on information about your revenue growth and market trends, and should be created using information about what’s currently happening, combined with your sales strategies. These projections will let potential equipment financing lenders know when they can expect to see timely repayments.

Each section of a business plan is very important to your potential equipment financing lenders. They will be looking through all of them to discover your story, purpose and mission; who your customers are; why you believe you stand out from your competitors and where you see yourself within your industry; what sort of team you have; what your “disaster planning” is; how much funding you need, and give them confidence in your ability to repay.

For most business owners, the thought of drafting a business plan sounds like paperwork—something you should do, but just can’t get excited about because you have a business to get off the ground or run.

However, a business plan should be exciting. Why? Because it can be a roadmap that leads you more quickly to the path of success. It allows you to run your company with a complete and cohesive vision, and it is how you will drive the future growth of your business.

How exactly does a document play such a key role in guiding your business? Let’s start with the basics.

Why Have a Business Plan?

Having a business plan sparks action. For one, it forces you to consider all aspects of your company, which means nothing will get overlooked and ignored. When you begin digging into all the information included in a business plan, you’ll uncover factors that demand to be addressed, including your mission statement, value proposition, customer personas, marketing assumptions, operations plan, financial plan, employment plan, and more. A business plan also helps ensure you’ll be prepared for anything because it will point out layout a plan of action to tackle problems before, during and after they occur to avoid serious disruptions and pitfalls.

Are you a goal-driven person? Business owners usually are, and a solid business plan will create and set goals for your business. You can use it to monitor progress, hold you and other stakeholders accountable, and ultimately help control the fate of your business.

When the time comes to secure equipment financing, a well-written business plan is an absolute must. Equipment financing lenders need to see clearly the pathway to your success because they’ll want to evaluate their risk. When the time for financing equipment to further business growth comes, you’ll be glad you have one ready to go versus having to fit developing one into your already busy schedule.

A written record of your company goals—paired with a track record of delivering against those goals—will let equipment financing lenders know that you fully understand your business and industry and will be able to deliver the results that you’re promising. Equipment financing lenders want to know that you’re serious and have thought out and planned your business strategy.

What are the Major Sections of a Business Plan?

Now that you understand why a business plan is crucial, you need to know what to include in the plan. Generally, there are seven components of a strong business plan. These include:

1. Executive Summary – An overview of your business, which includes the most important ideas from the other sections.
2. Business Description – An explanation of what your business is and what it does. Location, year founded, and other details should be included.
3. Market Analysis – A description of your market as a whole, where your business fits within it, and why you feel your company is superior to competitors.
4. Organization Management – The bios and experience of your impressive leadership and/or management team.
5. Sales Strategies – An explanation of your current and future marketing plans, and how you plan to generate revenue.
6. Funding Requirements – A presentation of the amount of money required to fund the business (and essential equipment).
7. Financial Projections – A summary of your successes up to this point, including forward-looking projections.

Each of these sections are extremely important when writing your business plan. They’ll help you as your business progresses and grows day by day, and they will also come together to form the clear concept and vision that will help secure potential equipment financing lenders, like Global Financing & Leasing Services.

Having a business plan is absolutely necessary for any business. If you haven’t started yours yet, the time to do so is well before your business requires financing for equipment.