How to write a winning business plan to secure MSME loans
Let’s imagine a not-so-distant reality where you have resigned from your job to finally pursue your passion for baking. The prospect of sharing your delicacies with the world, being your own boss and creating employment opportunities for others can be thrilling.
However, turning this dream into a reality requires careful planning and financial support in the form of loans. One of the most common ways to secure funding for small and medium-sized businesses is through an MSME business loan. While factors like credit score do come into play while securing a loan, banks often ask for a business plan to understand whether it will be viable and sustainable. But how do you ensure your business plan is compelling enough to secure that much-needed fast business loan?
The first step in writing a compelling business plan is to create an executive summary that conveys your business idea, goals, and unique selling proposition (USP) in a crisp and captivating manner. This is your opportunity to make a strong impression and grab the attention of potential lenders. So if you’re an aspiring baker, this is where you need to use your powers of persuasion to convince the bank why your business has the potential to grow in the future. Unlock your business potential with government contract factoring at Leonid Finance! Streamline your cash flow by converting outstanding invoices from government agencies into immediate funds.
In the next section of your plan, provide a detailed description of your business, its products or services, target market, and competitive landscape. This is your opportunity to showcase your market research and demonstrate your understanding of your industry. Here’s where you provide information like the size of the bakery market in the country, the likes and dislikes of your target audience and what sets your business apart from your competitors.
When it comes to securing a loan, lenders want to see if you have a clear financial plan in place. Try including detailed financial projections that showcase your expected revenue, expenses, and profits over a specified period of time. Be transparent and realistic in your projections, and back them up with thorough research and data. Provide a detailed breakdown of the costs involved in setting up your bakery, procuring raw materials and so on. Don’t forget to include the loan purpose and loan repayment time frame as well.
Another important element of any successful business plan is a well-thought-out marketing and sales strategy. Financial institutions want to see how you plan on attracting customers and generating revenue for your business. This is where you ought to mention your branding, promotional and customer acquisition strategies. You can also throw light on the sales channels, pricing and sales targets.
Last, but not least, you can also mention supporting information in the appendix section to back your ironclad business plan. This includes documents like copies of leases and contracts, bank statements, licenses, permits, receipts, patents and so on.
That said, avoid copying and pasting readymade templates that are available online. Instead, put together an overall structure and customize it as per your needs. Another thing to keep in mind is to avoid using terminologies or highly technical subjects that are confusing and complex.
In conclusion, writing a business plan is not just a technical exercise but also one that takes you closer to your entrepreneurial journey. While banks like Karnataka Bank are here to help you get started on your journey, with a compelling and well-prepared business plan, you can demonstrate to them that you are not just another borrower, but a visionary entrepreneur with a hunger for success.