Free Web Development Business Plan
When obtaining a business loan for a website development business, it is imperative that you have a properly structured business plan that will assist you in showcasing how you intend to operate your Web Development business, how the business will operate, how you intend to market the business, the anticipated financial results of your company, and how you intend to repay your debt obligations. This sample loan business plan will provide you with the framework that you need in order to acquire a business loan for starting or expanding this type of business.
When obtaining a business loan for a web development business, it is imperative that your business plan has a clear and concise executive summary that provides an outline of what are seeking to accomplish, how much capital you are seeking to raise, the management biography of the business owner, and an overview of the anticipated profit and loss statements of the business. Here is an example of how the title paragraph should be written:
Web Development, Inc. (“the Company”) is seeking a business loan of 0,000 in order to launch the operations of a web development business that will be based in San Francisco, California. The Company was founded in (Insert Year). The business was founded by Mr. John Doe.
In the next segment of the business loan and business planning document, you should showcase the products and services that you will be providing to the general public. For instance:
Web Development, Inc. will provide customers with a broad range of web development services including website development, web application development, e-commerce site development, and web hosting. The business will earn substantial revenues from the website development services coupled with recurring streams of revenue from the web hosting revenues that will be generated on a monthly basis.
Now it is time to discuss the anticipated terms of the business plan that you are seeking. An example paragraph of how this is stated:
At this time, Mr. Doe is seeking a conventional business loan in the amount of 0,000. The interest rate, loan terms, and loan covenants are to be determined during negotiation. However, this business plan assumes that the business will receive a seven year business loan with a seven percent interest rate due on the outstanding principal balance.
Now that the summary of the business has been provided, it is time to provide a brief overview of the owner of the business. An example paragraph summing up the owner is as follows:
Mr. Doe is a highly experienced business person that has years of experience regarding the direct ownership and management of business. He will be able to effectively bring the operations of the Web Development business to profitability while ensuring that the business loan’s payments and its covenants are met at all times.
The most important thing to your lender when applying for a business loan is how you intend to repay the bank. In this section of the business plan, you should provide an overview of the finance’s of the business discussing the anticipated revenues, expenses, and profits/losses. You can also discuss the applicable collateral within the business plan that will be used to secure your business financing.
One of the most important aspects of your business plan is how you intend to expand the business over a three to five year period. Banks and finance companies always want to see that the business will experience a moderate to strong level of growth. This is especially true in business lending because as your business grows the cash flow that secures your business loan will decrease proportionality against your monthly credit obligations. An example of how this is stated is as follows:
The Web Development business will continue to expand through organic means including increasing the Company’s advertising budget via the reinvestment into the after tax cash flows of the business.
In this section of the business plan you should focus on how the proceeds of the business loan will be used. An example of this would be as follows:
Web Development Office Establishment – ,000
Servers and Technology Equipment – ,000
Working capital – ,000
In this section of the business plan you should discuss the percentage ownership of the business among the owners of the business. For example:
Mr. Doe will own 100% of the Web Development, Inc.
When applying for business financing, the bank will also want to know who serves as the board of directors. For small businesses, usually the owner serves as the director of the business. An example of how this is worded:
Mr. Doe will be the sole director of Web Development, Inc.
Any bank or financing company is also going to want to know what you intend to do with the business over a set period of time. Many business owners will develop and expand a business with the intent to sell the company to a third party at a later time. When drafting this part of the business plan you should focus on what you intentions are in regards to potentially selling the business. This is often worded as:
Mr. Doe would most likely sell the Web Development businesses to a third party for a significant earnings multiple. Website Development businesses usually sell for approximately one to three times earnings given the financial strength of the business. In this event, the business would be sold by a business broker and the business loan sought in this plan would be repaid according to the covenants of the business loan agreement.
When developing a business plan that is appropriate for obtaining a business loan or other business credit facility you need to clearly showcase the services or products that you will be offering to the general public. An example of how this section is worded goes as follows:
As stated in the executive summary, Web Development, Inc. will specialize in the ongoing development of website development, web applications, and hosting services to the general public on a nationwide basis. The business intends to hire a number of independent contractors that will work on the Company’s behalf when developing websites for the Company’s clients. The business will also generate highly recurring streams of revenues from the ongoing sale of hosting services for people that do not own their own website hosting servers.
It is important to let your financial institution know that you are well apprised of the financial situation of the general economy when you are applying for a business loan. This is especially true in today’s environment where lending has become more difficult and will remain more difficult in the foreseeable future. Specifically, you should gear this section of the business plan analysis towards the industry that you are operating within. For example:
The current economy has remained difficult over the past few years. However, Web Development businesses tend to operate with a strong degree of economic stability as these businesses are able to generate highly recurring streams of revenue from the fees associated with hosting services. As such, the business will be able to remain profitable and cash flow positive in any economic climate despite the current deleterious conditions in the general economy.
In addition to providing your business loan officer with an understanding of the general economy, it is important that you showcase that you have an equal understanding of the industry in which you are operating within. As such, you will need to provide you business loan institution of a brief overview of your industry and any potential changes that may affect the way that your company does business. An example of how an industry overview is as follows:
In the United States, there are approximately 100,000 companies and individual providers that are able to provide web development services to the general public. Aggregately, these businesses generate more than billion per year while providing gross payrolls exceeding billion. The industry outlook is strong for the web development industry as every business now wants to have a presence on the internet.
In this section of the business loan application and business plan analysis, you should focus on the demographics of your localized market (or national market if applicable). This section should discuss how many people live in your area, the anticipated number of people that would require the use of Web Development Services, the median household income of people living in the area, poverty line statistics, and any applicable laws that would apply to your operation of Web Development Companies.
Many people that are developing new businesses or expanding existing businesses often feel that their business does not have any competition or limited competition at best. However, this is almost never the case. Unless you have re-invented the wheel – you will have competition. When applying for a business loan, you should clearly showcase your competition in your business plan. This is especially important to your banker as they will be able to gauge your ability to be successful in your targeted market. Many business loan underwriters will aggressively confirm that competitive nature of your local market and your local industry.
When drafting this section of the plan you should heavily discuss the competitive advantages that you intend to have over your competition.
In addition to all of the above information that we have covered, your business loan officer is also going to want to know how you intend to market your business to the general public. Most people do not quite understand how to effectively market their business outside of prominent signage or flyer distribution. When applying for a business loan (again in this difficult lending climate), your banker is going to want to see that you have a clear methodology of how you intend to market your services or products to the general public. In this section of the business plan – we will overview how to showcase your services/products to the general public.
The Web Development will place prominent signage on the facility to draw a significant amount of foot traffic in its local location in San Francisco.
The business will maintain listings in the Yellow Books.
The Web Development business will also maintain an internet website that showcases the Company’s operations, hours of operation, and relevant contact information.
Additionally, you will be required to further drill down (in your business plan) how you intend to implement your strategies when you launch or expand your business’s operations. In this section of the business loan and business plan documents, you should amplify the bullet points from the section above. For instance:
The Web Development intends to use a number of strategies that will create instant traffic and customer flow to the Company’s location. These strategies include not only using prominent facility and road signage, but also distributing flyers to people that fall into he Company’s targeted demographics. The business will also regularly take out advertisements in localized newspapers that showcase the Company’s hours of operations, web development and web application development services, and specials that are occurring with the on a regular basis.
The business will also maintain a highly informative website that showcases the Web Development company’s services, its hours of operation, service information, and other relevant information in regards to the Company’s services. This website will be listed on major search engines such as Google as many people now use the internet to locate web development businesses.
Beyond any other part of your business loan application or business plan, the financials section of these documents are what matters most when applying for a business loan or any other type of credit facility. Ultimately, this section of the business plan showcases not only what your anticipated profitability will be, but also how you intend to repay the funds that you have borrowed through your business financing facility. An example of how this section is structure is as follows:
Web Development, Inc. will have an average annual growth rate of 10% per year.
Mr. Doe will acquire 0,000 through a business loan in order to launch the operations of the business.
Now it is time to showcase how you intend to repay your loan, generate a profit, and increase the book value of your business over a three to five year period. BusinessPlansForLoan.com has developed an easy to use financial model that you can use when drafting out the financial model for your business plan and business loan application. Through your business loan application, you will be required to have the following:
Profit and Loss Statement for your Web Development Business
Cash Flow Analysis for the Web Development Business
Balance Sheet for the Web Development
Business Loan Amortization Tables
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Small Business Management
Business management refers to one’s ability to manage a business effectively and efficiently while retaining profitability. But what does that mean? Anyone can ‘manage’ a business, right?
But do we really know how to manage a business? And if we do, what does that entail? Do you just run around your company telling people what to do or run to the bank and make deposits at the end of the each week? Is that business management?
If that is all it takes to run a business, why isn’t everyone a business owner? If managing a business is so easy, why are there consultants? Simple answer: business management is more daunting a task than we may think.
I have always said that no matter how large or small a company is, it is an overwhelming task to manage the everyday issues. We could all use a little bit of help.
Traditional business management, which is what I have studied and is the methodology I use when discussing business issues with clients, takes into account all aspects of running a business, large or small.
Whether it is a million-dollar company or a billion-dollar company, all companies run the same.
Traditional business management is pretty much self-explanatory; it is managing business through traditional methods that have been used for many years.
Those traditional methods incorporate three aspects: sales and marketing strategies, efficient operation and productions methods, and finance and accounting (SG&A). I believe all business owners should have some understanding of these areas of business and try to manage them as best they can. Most large companies focus on these areas in that they have the resources to pay employees who specialize in these particular areas.
For example, consider some of the largest companies in the United States like Home Depot, Starbucks and Dell. These companies require precise and expert management of their business operations at all times while maintaining a positive financial position for investors. These businesses pay full-time employees to function in the company in particular capacities.
When we look at small businesses in the United States, we have to ask, “Do small businesses have the financial resources to pay for similar resources such as a chief financial officer, or a qualified VP of Sales”? Quick answer: no! Actually, no is the only answer.
When we look at larger companies and how they manage their sales and marketing efforts, we find that larger companies have the financial resources to hire employees on a full-time basis who are experts in sales and marketing.
We can say the same for the third aspect of traditional business management, operations and productions. Once again, large businesses have the revenue available to have full-time positions for a general manager, a production manager, and sometimes, a Vice-President of Operations.
Again, small businesses rarely have the opportunity to pay experts full-time salaries, which could cost a business thousands of dollars annually.
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So, now we know that traditional business requires the expertise of individuals in particular areas, such as finance, marketing, sales, production, operations, and management.
As a small business owner, can you pay the full-time wages of each of these employees? Do you have to hire all these employees in order for you to spend less time in the office worrying about business issues?
I have seen many million-dollar companies and I have seen a few billion-dollar companies; the only difference is that one pays for expert full-time employees and the other doesn’t. Obviously, the larger companies have the money to pay for expert employees, and small businesses don’t.
So how does the small business owner learn the basics of business management without paying for an MBA or spending thousands of dollars in annual salaries for experts?
Recently traditional business management had to make room for a new aspect of business: technology.
Through the years traditional business management has had to marry its strategies with the proliferation of technology where every business owner from Starbuck’s to Jim’s Auto has had to incorporate technology into its everyday operations.
The problem is that business believed that technology was going to be the solution for every problem, but it wasn’t until recently that business management thinkers realized that technology will fail if it is not implemented properly. That is, traditional business management must seamlessly marry itself with technology.
So, now you have this traditional business model to think of, and you also have to think that the model has incorporated technology. You see, managing a business is not as easy as it sounds. When you look at this business model I know for sure that you have never looked at your business in this way before. Believe it or not, graduate schools teach this stuff and larger companies obviously have the money to pay someone to think of this stuff, but what about the small business owner?
Small business owners do not have the financial resources to pay for this thinking and consulting companies for some reason; do not necessarily speak to the small business owner. Why not? Most consulting companies are always looking to fry the “big fish”, the 1% of businesses in the United States that can afford the phenomenal fees they charge.
Larger consulting companies do not have the time or the desire to speak to small businesses, nor will they change their fees which range over 0.00 per hour.
One of the comments I hear often in small businesses is, “Great idea, I wish I could get my people to do that, but I can’t expect them to change their ways.” I say, “You’d better get them to change their ways or you could be out of a job”!
Oddly enough, small business owners are reluctant if not skeptical in getting help for their business. To this day, I have yet to figure that one out. Why don’t small business owners look for help?
I firmly believe that business is business regardless of the size of the company, the annual revenues, or the number of employees. Keep in mind that the largest businesses in the world were once small businesses and today they are worth a great deal of money. All businesses “managed” their way to the top, regardless of the industry.
I have seen numerous multi-million dollar businesses in every industry, to include contractors, restaurants, service companies, and manufacturing companies. And I have also worked for companies that are worth billions and billions of dollars. They all have one thing in common: They all run the same some just have more revenue than the other.
I have always said that no matter what you produce to sell, HOW you produce it is what is of paramount importance to the growth of your business.
Your business is not too small or too large for a review of its current business processes. I have not met a business owner, a president or CEO of a company who can tell me that their business is running so smoothly that they don’t need to change. That is simply not true.
The natural stirring of the U.S. economy is what causes the need for change in all businesses of all sizes and I guarantee that if you are not constantly rethinking your business strategies, your competition is.
Can you say that your business is flexible enough to manage your competition and stay ahead of the curve, or that your business can handle the daily economic fluctuations in the U.S.?
Ask yourself some of the following questions.
1.Have your total revenues gone up or down from last year?
2.Has your profitability gone up or down from last year?
3.Where is the next dollar coming from?
4.Are you tired of going to work?
5.Do you have adequate inventory levels?
6.How many employees report to you on a daily basis?
7.Do your employees actually do what you ask and expect of them?
8.Do you have a management team in place?
9.Is there business expenses you wish you didn’t have?
10.Does every employee in your company have a specific job function that justifies their labor burden?
11.Do you remember when owning your business was fun for you and your family?
12.Do you believe your company operates as smoothly and efficiently as it could?
13.Do you have a long-range plan?
14.Do your employees share your vision of the business?
15.Who do your employees go to when there is a problem?
16.If you actually met me, would you be able to tell me that your business doesn’t need to change, or that it is truly profitable?
If you are ready to move your business forward, get some help. Believe it not, the success of your business is important to this great Nation.