When you’re getting ready to apply for a small business loan, one of the items that most lenders are going to ask of you is a business plan. Your business plan is a roadmap, one that tells the world who you are, what your business is, and why they should believe in it.
At Honeycomb, we ask for a business plan when you apply with us, but we don’t believe you need to haul over some 20-page, super-detailed business plan to work with us. Instead, a 1-2 page executive summary is all you really need, as long as it answers the following questions:
Who are you, and why are you qualified to run your business?
This is where we want to know a bit more about your background, and why you’re the one who can make your business successful. What did you do before starting your business? How is it relevant to your growth? Do you have a business partner? What do they do?
Example:
“My name is Baker McCake, and I have been a pastry chef for 10 years. My business partner, Mark Eter has 15 years in the marketing industry and has experience in food retail.”
How are you planning to grow your business?
Now, what’s your plan to grow your business - why are you applying for a loan? There are a number of good reasons to take out a business loan - opening a new storefront, purchasing new equipment, investing in marketing and distribution efforts are all typical kinds of projects that entrepreneurs take out loans for.
You also want to back up your idea for growth - show you’ve already made steps toward making it a reality. It could be having a letter of intent to occupy for a retail space you want to lease, or knowing exactly what kind of brewery equipment you need, and where you’re planning to get it.
Example:
“I’m planning to open a storefront, and have a letter of intent at this location to occupy it. This will allow me to have a place where customers can come everyday to purchase my baked goods and build community.”
What exactly do you need to make this growth a reality?
Here’s where you need to show us the numbers. You need to have an idea of the minimum amount of money you need to make your goal a reality, and if you have any other needs for your business’s growth plan, the maximum amount. This is one of the cool things about crowdfunding - you have the potential to reach your maximum potential based off of what your community invests in you, not what a bank thinks you deserve.
Example:
“I’m seeking $100,000 minimum to put a down payment on the retail location and finance the buildout for my new bakery. My maximum goal is $200,000, which will allow me to hire employees immediately and refinance some high-interest credit card debt.”
How can you prove that you can make this happen?
The last thing we want to know is, do you have what it takes to make your growth project happen? While we might know on some level based on your background, we also want to hear some projections from you. How do you know there’s demand for your business? How much are you expecting to increase your revenue after completing the project?
Example:
“I expect to increase revenue by 50% every year with the new retail location of my bakery. From then on, I will focus on expanding my production to reach more wholesale accounts with local restaurants in the area.”
For some added support, try a template!
If you're ready to try out these tips for your own business plan, download our template! Then, when you apply for your Honeycomb loan, you'll already be one step ahead of the game.
Stick with the plan, and we’ll help you succeed
Running a crowdfunding campaign with Honeycomb Credit is in many ways so much easier than going to a bank for a loan. We can help you get processed way faster, raise more money, and strengthen your relationships with your customers through the journey! Fill out the form below to learn more about Honeycomb small business crowdfunding.
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