Are you planning to approach your bank for a finance to kick startyour growth plans? Before you start reaching for the phone your firsttask is to write a Business Plan.
I am great fan of a one-page Business Plan; a simple, focuseddocument which gets straight to the point of where you need to be overthe next 12 months and how you are going to get there.
However, when it comes to raising finance that’s not going to cut it; you need something with more substance.
Writing a Business Plan can be a daunting task but committing timeto writing an effective Plan can help improve your chances of success of getting that all too elusive ‘yes’ from the bank.
Here are 7 tips on writing a Business Plan that rocks.
Tip #1: Understand Why the Bank Wants a Plan
Trying to get your head around what a business is, how it operates and what it wants to achieve is not easy if it is presented verbally. The bankideally wants to see all it needs to know about your business in onedocument instead of having to gather information from a plethora ofsources.
The creation of your plan is about setting out a clear strategy and detailing long term objectives. With clarity of what your future lookslike you are more likely to make the right decisions along the way andthis is what the bank wants comfort on.
The benefits of presenting a well crafted Business Plan cannot be underestimated when it comes to raising business finance.
Tip #2: Don’t Go It Alone, Ask For Help
Picture this. You’ve never written a Business Plan before; you sit down and end up staring at a blank screen for 3 hours! However, in order to help you put a plan together there are a variety of sources of help you can tapinto:
- Professional advisers
- Business colleagues
- Advice agencies
- Your staff
- Internet and books
Never be afraid (or to proud) to ask for help.
Tip #3: Follow a Framework
Having aframework or outline to follow can make the task of writing a BusinessPlan so much easier. The 4 parts to your Plan are:
- Where you have come from
- Where you are now
- Where you want to be
- How you are going to get there
This is the framework which will guide both you and the reader through your business and your idea.
Where You Have Come From
In the first section lay out your back story; how your idea cameout; the gap you were looking to fill or the problem you wanted tosolve; and finish with a brief overview of how you got started.
Where You Are Now
In the next section you paint a picture of where your business is now.
- Location and premises
- Your product or service
- Your market
- Your customers
- Your competition
- Your staff
- Equipment and other physical resources the business utilizes
- Overview of your past financial performance
Where You Want to Be
Having described yourbusiness, the next step is to outline to the bank what you want thebusiness to look like in say three or five years. The main points tocover are:
- Your objectives and goals. Be specific to demonstrate you have thought this through
- State what you want from the bank for example, a loan or overdraft how much you are looking for
- Explain why you need the finance and what it will be used for
How You Are Going To Get There
It’s all very welldescribing your business and promoting your idea but the important point to get across are the actions you will take to get you there. The keypoints to cover include:
- Marketing plan
- Additional resources needed to meet your objectives and goals
- Your contribution in terms of cash or equipment
- Security you can offer to support the facility
- Profit and loss and cash flow forecast to show that you plan to make money and that you can pay back the loan
Tip #4: Provide Supporting Information
Your Plan will contain a lot of information, so it would be helpful toinclude supporting documentation to provide more background. Placingthese additional items as an appendix ensures that the flow of the Planhas not been affected by additional information.
- Letter of support from your Accountant
- Confirmation of pending orders from customers
- If you are purchasing a property, you could include the sales particulars
- Independent industry surveys showing that your sector is doing well
- If you are buying machinery, include quotations
- If your business’ main asset is you, include your CV
Tip #5: Ask Someone to Review It
When you are totally immersed in a task you can easily miss obvious mistakes. Ask someone to review your Plan to ensure there are nospelling or grammatical errors. Does it all make sense? Have you beenlogical in your arguments? Have you answered the key question “Why weare safe to lend to”?
Tip #6: Get the Presentation Right
After having spent a lot of time and effort on the content you don’t want to kill it dead with poor presentation.
- Avoid technical terms and industry jargon
- Break the text up to make it easier to read
- Use pictures and color to bring the Plan to life
Tip #7: Deliver Your Plan to the Bank in Advance
Once you are satisfied that your Plan is a good representation ofyour business submit it at least three days prior to your meeting so the Manager has time to read it. This will give them time to collatequestions and to identify areas that need clarification.
Follow these steps and you will be in a much stronger position to get the bank on board with your plans.