How to write a business plan in Uganda.
Do you need funding to start, expand, or acquire a business? you will need to raise money and one of the ways to raise money is by getting a loan.
Yes, lenders in Uganda will look at the standard factors required of all loan applicants, such as your credit history, credit score, and assets —
But business loan lenders will also need a business plan.
Why do you need to know how to write a business plan for a bank loan?
Because banks want to know if your business idea will be viable and sustainable.
To assess its viability, they look at all aspects, including financial statements, sales strategies, and your overall financial plan.
Banks also want to know what the business is, what products you offer, what the competitive landscape looks like, and who your key personnel are.
This information (and more) is used to gauge your business’s chances of success, which will ultimately allow you to succeed and make loan payments to the lender.
While a business plan for a loan should be clear and comprehensible to loan officers, writing a business plan for a loan also benefits you as the owner.
A well-executed business plan serves as a guide to your business.
You can use the past financials and the forecasts as blueprints to determine whether you are on track for success, for example.
Now let us look at how to write a business plan for a loan in Uganda. The business plan will have the following elements.
- Cover Page and Table of Contents
- Executive Summary
- Company Description
- Market Plan and Analysis
- Organization and Management
- Service or Product
- Marketing and Sales
- Financing Analysis
- Funding Request
- Appendix
1. Cover Page and Table of Contents
Your business plan for a loan application is a professional document, so be sure it looks professional.
The cover page should contain the name of your business and your contact information. If you have a logo, it should go on the cover.
Both lenders and you will appreciate a table of contents and page numbers in the business plan for a loan application, so they can quickly find specific sections.
If you are delivering your plan digitally and not physically, be sure your table of content is clickable and links readers to the correct sections.
2. Executive Summary
It’s common for business documents to carry executive summaries at the beginning so that busy people have the key takeaways from a larger document immediately at hand.
Your reader shouldn’t feel they have to wade through a large document for crucial information.
Briefly summarize the entire business plan on a page. Describe the company, your product, and why you started the business/company.
Include your chief competitors and why your product will succeed against them. If relevant, discuss the economic climate vis-à-vis your customers and products.
3. Company Description
The company description should include a mission statement, the company principles, strategic partners, and your corporate structure. It will be relatively short.
4. Market Analysis
After you’ve told the lender what your company does and who does it, you’ll want to provide a competitive analysis of your market.
Let’s be clear: the market analysis is not a complete marketing plan.
The market analysis focuses on the qualities of the market, not a detailed plan of how you’ll capture it.
Identify the existing gaps that your business will fill.
A business plan’s market analysis should include:
- An industry overview and outlook
- Any differentiation in sector and niche
- Information on your target market
- The company’s marketing strategy and how it will make your company stand out
The market analysis should also specify the effect of outside sources on your company.
For example, if the industry is subject to regulation, include information indicating your knowledge of the law and your past compliance with it (if your business is already up and running).
Will you require raw materials? If so, how do you guarantee you’ll have them at costs that support your financials? Are there any risks to price points changing?
What about your competitors? How do they differentiate themselves? What is their pricing strategy?
While your market analysis will majorly include information about your competitors, the real focus should be on your target customers.
Where do they currently shop? Why? How old are they? What are their beliefs?
What’s their current average income? Perhaps there is more than one type of customer, in which case you should include details about both customer segments.
Showing investors you have mastery over your ideal customer adds confidence in your ability to succeed.
If your company is engaged in ongoing market research or research and development for competitive new products and services, indicate it in this section.
Does your research include customer interviews? How are you ensuring that your research is credible?
The market analysis should be based on reputable sources. For example, when describing your competitors and their products, it should be clear to readers where the information comes from.
Tip: Many business owners engage third-party companies to perform an analysis. If you have, be sure to cite them.
If your information comes from published research or a survey, be sure to mention them as well.
5. Organization and Management
The organization and management section should itemize your company’s management structure.
Many business plans provide an organizational chart, a structure description, and salary forecasts.
The description should include each management position, the person in the position, their responsibilities, and their qualifications.
If you have a Board of Directors, list them on a separate page, along with any experience relevant to your business’s success.
The principals of the firm, such as the owner and co-owners, are included in the business description section.
If your company is small and currently contains only the principals, it isn’t necessary to include a separate organization and management section.
6. Service or Product
Now it’s time to describe your company’s product or service in detail. What do you sell, and who do you sell to? Define your business model.
What need are you fulfilling for the customer base? Business plans often itemize their entire product line with the planned or current pricing structure.
The service or product section should also include your product/service’s estimated lifecycle, and any research and development completed, in progress, or planned.
Naturally, this section will vary greatly depending on your type of business.
If applicable, it should also include a description of any trademarks, patents, or other intellectual property rights.
7. Marketing and Sales
The marketing and sales section includes three vital pieces of information:
- How will customers find out about your products?
- What will your sales channels and methods be?
- What is your growth strategy?
If you plan for customers to discover your products or services through informational methods like industry meetings, specify what your plan for that method is.
If you plan to advertise or develop a public relations campaign, specify what your efforts will be.
Will you be on social media channels? Which ones, and why? Are these efforts designed to appeal to specific demographics or types of customers? Which ones, and why?
Will sales be accomplished via a targeted sales team? Shall management call upon relevant prospective clients or stores? Will you have an online presence?
If you have a growth strategy, outline it. If you plan expansions to other geographic areas or other types of potential customers, write it down in this section.
8. Financial Analysis
The financial analysis section is key for lenders. The financial analysis must include financial projections for three to five years out.
The further out into the future forecasts run, of course, the more difficult it is to predict with certainty.
One solution is to prepare a business plan with three-year forecasts, but have a five-year forecast ready if the investors want them.
If you are already in business, you should also include historical results for the past three to five years (or for as long as the business has been operating, if it’s less).
The financial projections must include:
- Income statements
- Cash flow statements
- Capital expenditure budgets
- Balance sheets
They may also include profit and loss statements, sales forecasts, and financial metrics relevant to your industry.
Lenders may ask you for more granular data, such as the cost of sales or cost per product (or service).
You need to provide the projections by month, quarter, and year. Potential investors want to see the financials in both the short and long term. Why?
Because businesses that aren’t meeting their monthly and quarterly projections can be risky. If they are falling behind in sales or profit, for example, they can fail rapidly.
On the other hand, if sales are much higher than projected, it can be challenging to keep up with production and other efforts.
To counterbalance the risk, lenders always want a clear picture of what’s likely to happen.
9. Funding Request
Now it’s time for your funding request!
You need to itemize why you need business financing, what amount you’re requesting (both current and prospective for the next five years), and what you will use the amounts for.
Describe how funding will contribute to the overall success of your company (and its strategic plan). Will it allow strategic R&D? Provide funds to acquire a smaller competitor? Create an opportunity for media buys and other marketing.
Here’s one way you can structure your funding request:
- Your current funding needs.
- Any future funding requirements over the next five years.
- How you intend to use the funds you receive.
- Any strategic future financial plans.
10. Appendix
Appropriate appendix materials include:
- Principals’ resumes
- Tax returns
- Relevant real estate documents
- Documents detailing the legal structure of your business
- Processing flowchart
- Letters of intent to purchase from buyers
- Advertisement and marketing materials
- Relevant training certificates
- Sales forecast
- Other financial forecasts
- Personnel plan
- Profit and loss statement
- Balance sheet
Your Turn…
That is all that is required to write a business plan for a loan in Uganda. If you want more about how you can write a business plan for a loan in Uganda see here.
If you want to raise funding for your business we have a full article on how to raise capital for your business.
Very good .I appreciate the steps shown.
Thxs.
Martine in Uganda.