By Dan Boudreau

There are many reasons to prepare a business plan, but the most popular is to get money to advance your business goals. At some point, most businesses will need to borrow money in order to grow. When that time comes, you’ll want to arm yourself with a bulletproof business plan.

Here are nine things you won’t want to miss as you ready your business plan to romance your lender.

1. Describe Your Business. State your business vision and mission, and clarify how the business is structured, what you sell, and how it works. Weave these things together to create a snapshot of your current situation and be sure to tell why you need money and how much you need.
2. Write Your Business Goals. Set goals for the term of the loan, including: sales targets, net profits, the number of units to be sold, new products or services, how you’ll diversify your business, and how many new clients you’ll add.
3. List Your Customers. Describe your customers and the problem your business solves for them. Clarify who they are, what they want, and their main buying motives. A lender will want to know that you understand who you’re selling to.
4. Describe Your Competitors. List your competitors and compare them according to the products or services they sell, how their facilities are arranged, how many workers they employ, and how long they have been in business. Explain how your business differs from the competition, and clarify why customers buy from you.
5. Beef Up Your Biography. Provide a summary of your credentials and experience, including relevant academic, work, and business achievements. Feel free to toot your own horn by listing your strengths and successes—highlight your history of following through on your business plans and commitments.
6. Plan Your Cash Flow. Cash flow is most easily created using a spreadsheet program. Determine the flow of cash into and out of your business—monthly for the term of the loan you hope to borrow, at a minimum for the first year. Key to your business plan, a cash flow forecast will clarify how much money you need to operate each month, as well as showing how you will pay back the borrowed funds.
7. Project Your Income. While a cash flow projection shows how much money will be in the bank at the end of each month, pro forma income statements show whether or not your business is expected to be profitable in the future.
8. Explain What You Need The Money For. In your business plan, show how you will use the borrowed funds. If you’re buying equipment, list the items and support your request with quotes. If you need an operating loan, your cash flow should show how much you need and when.
9. Offer Security. Most small business owners will only be able to borrow against what they already own or can offer as security for the loan. Most often this means providing a personal guarantee and offering equity as security in the event you fail to make loan payments.

Finally, be prepared to invest a minimum of 20 to 50% of your own funds or equity into any venture or project for which you wish to borrow money. Lenders will want you to have enough skin in the game to ensure that you’re motivated to make payments and follow through on the promises made in your business plan.

Ready to get started on your business plan? We have free business planning and tools and resources for you. Visit our Tools page