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Having a well-thought-out business plan demonstrates the commitment and professionalism of the owners, and is essential to the company's success .Creditors and investors want to know detailed information about what your business does and how you plan to compete in the marketplace. It is important to be as specific as possible and provide an in-depth look into the data behind your business goals and projects, as well as what you plan to use the money for and your timeline for repayment.

Elements of a Business Plan

1. Executive Summary

The executive summary should briefly summarize the essential information about your business. A strong executive summary hits upon the problem your company solves, your target market, competitors in the space, and your projected success. Make sure that it provides the valuable financial information and value proposition behind investing in your company. Ideally it is only one to two pages. Sometimes it’s easier to write the executive summary last, as it summarizes the topics you’ve covered in detail elsewhere.

2. Company Description

This section answers these questions: What are you actually selling and how are you solving a problem for consumers? Who is your target market that you plan to serve? Describe in detail what your business does, who your customers are and the competitive advantages that will make your business a success. This is where you tell your “story” and show others the passion that you have for your business.

3. Market Analysis

You'll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? What is your potential market share?

4. Marketing and Sales

Your goal in this section is to describe how you'll attract and retain customers. You'll also describe how a sale will actually happen. What marketing strategies will you employ to reach customers and how do you measure the effectiveness of those strategies?  This includes social media efforts, web development strategies and search engine optimization. You need to show that you have thought this through and are ready to implement a plan to ramp up sales.

5. Funding Request

Here is where you ask for the amount of money you need. Your goal is to explain how much funding you’ll need, what you'll use it for and the timeline for paying it back. Specify if the requested funds will be used to buy equipment or materials, pay salaries or cover expenses until revenue increases. Include a description of your future strategic financial plans, like paying off debt or selling your business. Creditors need a clear picture of how much money you need, what you will use it for and how you plan to repay the loan.

6. Financial Projections

Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets. Your forward-looking projections should be based on revenue growth and market trends. You want to be able to use information about what’s happening, combined with your sales strategies, to create realistic projections that let others know when they can expect to see returns.

7. Existing Financials

Provide financial statements dating back two to three years. If you have an existing business, provide income statements and balance sheets. If you are a start-up, provide personal financial statements and outline existing income sources.

While financial institutions take many factors into account when determining whether to provide funding for a business, having a comprehensive business plan will show them you mean business.