The Difference Between an Internal Business Plan and a Bank Business Plan

People tend to speak of a business plan as a one-size-fits-all concept but, this is just not the case. The way you approach a Business Plan can drastically vary depending on the purpose and the audience. Internal business plans specifically will vary quite dramatically from plans meant for external parties, such as a Bank Business plan.

Purpose

The greatest difference between a Business Plan Written for internal use and a bank business plan is the purpose. When you write an internal business plan, it is for your own use. It is usually meant primarily as a way to test out your business concept and/or provide a roadmap to business success.

Meanwhile, a bank business plan is written with the intention of convincing an outside party that your business concept is viable, will be successful, and is worth funding. In some ways, it’s similar to creating an internal business plan but, there are many elements that will differ. In the bank business plan, it is much more about clearly articulating the business concept and less about creating a step by step plan.

Depth

While the main elements of your business plan, especially your financials, should not differ between these two types of plans, the way you present them and the level of detail you go into on certain aspects will differ. There are certain aspects of an internal business plan that will be unwritten as they are already known in your mind. The level of depth of Market Research may be different as well. Again, this relates back to purpose. When you are writing a bank business plan, you will focus more on selling the business than simply planning the business and this will augment which sections you focus on most closely.

Personal Finances

In your internal business plan, you are unlikely to include any information about your personal financial situation besides what funds you are contributing to the business. However, in a bank business plan, lenders will be extremely interested in your personal credit and financial situation. In most small business bank loans, the individual owner or owners are on the hook for the loan in the case the business fails. This is high stakes for a bank, so they need to ensure that not only do you have a business plan that is likely to succeed, but that you are financially responsible and are likely to honor the loan regardless the future of the business.

Formality

Your own business plan can be written in any format with any type of language. You are more concerned with creating a plan than being able to communicate it to others in any sort of structured format. Some internal business plans have even been drafted on napkins and transferred to paper later (or never). When you are creating a bank business plan, it is expected to be written in formal business language and follow a traditional business plan format.

Despite the differences between these two types of plans, the fundamental aspects of an internal vs. bank business plan are similar. In the end, it is all about building a solid foundation on which to start or grow your business. However, how you approach them will is like to vary drastically. Don’t be afraid to consider a professional business plan writer if you need to craft a Bank Business Plan and feel as though this task is out of your element.