Good question in email today, from the ask-the-experts at bplans.com:
I’m doing my business plan, and I just need a idea of what I should put for this particular question… How will the money I’m borrowing make my business more profitable? If you can give me an example of what they want to see I can go from there! Thanks
This is a pretty good example of how your plan is not supposed to be great writing, or an SAT test, or a job interview. Just tell your story, in your own words. And, in this case, the whole truth, and nothing else but the truth.
Imagine I’m a trusted loved one, and when you talk about borrowing money for your business, I ask you “Why do you want to do that? What will you use it for? Is it worth it to you? Do you want to get into more debt? How is it going to make your business better?
Answer those questions, in plain English, and you’re most of the way there.
Then make a list. What are you going to spend the money on. For example, if I were a startup software company wanting to borrow $50,000, my list might look like this:
|Use of Funds||Amount|
By the way, this is a fairly standard table in a business plan. It is often called use of funds. Investors always expect it, and good professional lenders want to see it because they want to do their job well, making sure that the transaction is good for your business so you’ll be more readily able to pay it back.