What lenders and partners need to see in your business plan

When an entrepreneur asks what is a business plan, the practical answer is that it is a working document for explaining how the business will operate, serve customers, use money, and respond to risk. At the Latino Chamber of Commerce of Dane County, we see plans become most useful when founders prepare them for real conversations. A lender, partner, landlord, mentor, or program advisor will usually want to understand the same core idea from a different angle: does this business make sense, and can the owner explain why?

Begin with the question behind the question

A business plan should help another person follow your reasoning. That means the document needs enough detail to explain the business model without burying the reader in pages that do not affect the decision.

The SBA says there is no single right or wrong format. Traditional and lean plans are both common, and the sections should fit the business and the purpose of the plan.

Before writing, ask:

• Who will read this version?
• What decision are they being asked to make?
• Which assumptions will they want explained?
• What evidence supports those assumptions?
• Which risks need a realistic response?

Those questions keep the plan focused on use rather than appearance.

Show the problem, customer, and local market

A lender or partner needs to understand who buys from the business and why. Describe the customer in practical terms: where they are, what need the business addresses, how they buy, and what alternatives they already have.

For a Dane County business, local context can matter. A restaurant, contractor, retail shop, childcare provider, and online service company will face different customer patterns and operating conditions.

Use market information you can defend. Avoid vague claims such as “everyone needs this” or “there is no competition.” A credible plan shows that the founder has looked at the market closely enough to answer uncomfortable questions.

Connect the plan to real numbers

Financial projections (proyecciones financieras) should grow from clear assumptions. If revenue depends on selling a certain number of units, explain the expected volume and price. If the business has seasonal expenses, show where they affect cash flow (flujo de efectivo).

Do the same with startup costs, payroll, rent, inventory, insurance, and other major expenses. You do not need invented precision. You do need a reader to see where the numbers came from.

A funding request becomes easier to evaluate when it answers:

• how much money the business needs;
• what the funds will pay for;
• when major expenses occur;
• what revenue assumptions support repayment;
• what happens if sales start more slowly than expected.

No business plan guarantees financing or a grant. It gives the reviewer organized information for making a decision.

Explain how the business will run day to day

Operations often expose gaps that a sales forecast cannot. Explain suppliers, staffing, location, delivery, licenses or permits, equipment, and the basic workflow from customer order to completed sale.

If the business depends on one supplier or one seasonal period, say so. Then explain how you plan to manage that dependence.

This section also helps potential partners understand what you expect from them. A plan de negocios becomes more useful when responsibilities are visible before people sign agreements.

Prepare for the conversation, not just the document

A strong plan should make you better prepared for questions. Banks may ask about repayment and owner investment. Landlords may focus on the business model and location. Grant programs may ask about outcomes. Partners may want decision-making roles clarified.

Practice explaining the numbers without reading from the page. If an assumption cannot survive a simple follow-up question, revise it before submission.

Use support before you submit anything

Small-business counseling, workshops, and technical-assistance organizations can help founders test a plan before it goes to a lender or partner. We encourage entrepreneurs to use those business resources early, especially when financial projections or market assumptions still feel uncertain.

The SBA also provides current planning guidance and templates for different business-plan formats. Bring your draft, questions, and source numbers to the conversation. The goal is a plan you can explain with confidence, not a document that only looks complete.