The Power of Having a Pitch Deck Accompany Your Bank Business Plan

 

Pitch decks are most commonly used when approaching potential investors. However, they can make a powerful accompaniment to your Bank Business Plan as well. Although they are rarely requested and almost never required, including a pitch deck when you submit or present your full bank business plan can increase your chances of securing your desired business loan or line of credit.

Introduction to Your Business

Given the sheer number of bank business plans that business loan officers review, they are unlikely to read every single page, especially as a bank business plan tends to be around 20-40 pages on average. Including a Pitch Deck gives you the ability to give them a quick overview of the most important aspects of your bank business plan so they have the full picture prior to reading through your full plan, regardless which sections they choose to fully read. The pitch deck can be a great way to introduce the business in a way that allows you to better control the narrative and set the tone before your full bank business plan is reviewed.

Emotional Appeal

Even bankers and loan officers are human, and we know that humans cannot completely eliminate emotions from their decision-making process. The pitch deck allows you to appeal to emotions in two ways. It can create excitement but, it also allows you to weave more of a story around the business. This is a helpful contrast to the presentation of the formal bank Business Plan. Naturally, bankers will want all the details but, starting them off with a pitch deck constructed to appeal to emotions can be a powerful tool.

Visual Appeal

Some people are more visual than others. You should definitely have visual elements in your bank business plan but, they should be limited to adhere to the standard expectations and level of formality. A pitch deck gives you more leeway to focus more on the visual appeal and present your business briefly in a visually stunning way.

Strengthens Weak Plans

How a loan officer will perceive your Pitch Deck will vary person to person. However, for those that do welcome and review it, it can help strengthen your strongest points and draw attention away from weaker points. As an example, say you only have fair personal credit. Personal financial position is very important when it comes to a bank business plan because, in most cases, you will be personally responsible for the loan even if the business fails. If your personal financials are borderline for approval, the pitch deck could be what pushes it over the line and helps you secure your loan.

Although rarely requested or required, the pitch deck can be a powerful addition to your Bank Business Plan. It helps you strengthen your business case and present information in a way that might be more favorable to the person responsible for approving your loan. While it may not always help, it certainly doesn’t hurt. If you want to make sure it’s appropriate for your audience, consider having a professional create your pitch deck, whether or not you completed the business plan on your own.

 

Market Research vs. Financial Modeling: Which is More Important for Your Business Plan?

 

Arguably, Market Research and financial modeling are two of the most vital components of your business plan but, which one is more important? That is not a question that is often asked but, it is one worth exploring. If you are new to business planning, you may not fully understand the potential and importance of market research or Financial Modeling. The first step is to understand these two tools and then compare their usefulness and overall contribution to your final business plan.

Market Research

Market research is the organized and intentional process of learning everything you can about your consumers. This spans from the macro level, looking at the entire market, to the micro level, answering specific questions about your well-defined target – also sometimes called niche – market(s).

Market research involves both qualitative and quantitative research. On the qualitative side, you may conduct focus groups or survey potential or existing customers. An example on the quantitative side is looking up statistics about the current value of the overall market. Both will generate invaluable insights that will help you make better decisions for your business.

Financial Modeling

Financial modeling is the process of creating representations of real-life numbers so you can see how they will be impacted under certain conditions and potential scenarios. They are interactive documents, usually created in a program like Excel, that allow you to put in multiple different inputs to see the result.

Financial modeling is sometimes confused with Financial Projections. However, financial modeling is an interactive process to see multiple variables in several scenarios. Financial projections on the other hand are static documents. Financial modeling will usually be used to determine your financial projections but, financial projections are the end result.

Market Research vs. Financial Modeling

So, which is more important to your business plan? A case can be made for either.

In terms of market research, it will be extremely difficult to generate any revenue if you don’t understand your client or how to reach them or have a handle on your competition. Market Research also informs financial modeling as it gives you a realistic range of your revenue potential.

On the other hand, you cannot run or plan a business well if you can’t understand – or visualize – how different decisions are going to financially impact a business. If your business can’t make a profit your business will not survive let along thrive and grow.

In the end, it’s really not a competition between the two. These elements act in tandem to create a solid, bullet-proof business plan. Without either of these valuable tools, or only having one, your business plan will just not be complete or well done. You need to utilize both market research and Financial Modeling to truly see the risks and potential of your business and plan accordingly.

If you are unsure of how to approach market research or how to effectively utilize financial modeling to plan your business, consider hiring a professional Business Plan firm like Joorney. This initial investment will be well worth it to have a successful and thriving business in the long run.

 

Pursuing a Business Degree – 5 Reasons to Consider Having Your Final Project, Capstone, or Thesis Reviewed by Professionals

 

When pursuing a general business degree such as a bachelor’s of business administration (BBA), bachelor’s of business management (BBS), a master’s of business administration (MBA), or a doctorate of business administration (DBA), a final project or report in the form of a Business Plan or a thesis about a particular aspect of business is typically required.

 

 

Read More 5 Reasons to Consider Having Your Final Project, Capstone, or Thesis Reviewed by Professionals

 

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Financial Modeling: An Important Key to Business Plan Success

A strong argument could be made that the financials are the most important part of a Business Plan. The only way to develop these financials in a sound fashion is through the process of financial modeling. Financial Modeling is one of the most important tools you have in creating a successful business plan.

How Financial Modeling Works

Financial modeling is a way of creating an “abstract representation of real-world financial situations”, particularly as they apply to business. They are working representations, usually created in a program like Excel, that allow you to input various scenarios to see their potential financial outcomes. This representation helps guide businesses to making informed, well-considered decisions even in complex situations.

Financial Modeling in the Business Plan’s Financial Projections

Financial modeling is used in a business plan to create Financial Projections. Unlike financial modeling, which is meant to be a “living” document that will have multiple outputs based on different variables, financial projections are static figures that do not change. These financial projections are in essence the goals of the business. Existing, future projections may be overwritten by new projections later but, the original projections themselves will not change, rather will be replaced by more recent, and often more informed, projections.

Break-Even Analysis: Financial Modeling Example

When it comes to creating your business plan, financial modeling will play a role in all of your financial projections in one way or another. Let’s take the break-even analysis as an example. A break-even analysis shows when a business will become profitable. It is based on how much you will charge for your products or services, your sales volumes, and the expenses you expect to incur.

You may have an idea of your sales volumes and revenue or the expenses you will incur, but it’s only when you begin to put it on paper, via financial modeling, that you can start making real decisions about your business. It will help you decide what expenses to take on and where you may need to cut. It will also help you set your sales goals. Financial Modeling allows you to start putting in your planned expenses as you do research. It lets you adjust all the numbers as you go, do research, and make decisions.

As an example, after research and listing your expenses, your total expenses for three years come to $100,000. However, your sales expectations are only $80,000, which would lead to a $20,000 deficit. If you want to break even in the first three years, you have a couple options for the business plan at this point:

1. Reasonably increase sales expectations, either in volume or revenue

2. Find ways to decrease some of the expenses

3. Completely cut some of the expenses

Financial modeling in the business plan financials allow you to see an issue in abstract, on paper, well before it occurs. It allows you to better plan and support your financials to get a clear picture. Your financial projections will rarely fall together without research and evaluating various scenarios. It will almost always require financial modeling to make important decisions about the business to set realistic, reasonable financial projections from the beginning, so you have the most sound, stable, and realistic Business Plan possible.

7 Things Professional Business Plan Writers Always Include in a Bank Business Plan

 

Professional business plan writers are experts at creating a business plan tailored to a specific audience. When it comes to writing a Bank Business Plan, there are certain aspects that these professionals will add or emphasize.

1. Direct Language – There is no need for overly descriptive or “flowery” language in a bank business plan. In fact, Professional Business Plan Writers will do the opposite. Lenders prefer the bank business plan get to the point and not be oversold.

2. Formal Structure – Unlike some other types of business plans, a bank business plan should be very formal in nature. Professional business plan writers know to keep the structure and content in an organized and predictable order. Although it won’t be the same for every business, it will for the most part follow a similar format. A bank business plan is not the time to try to break the mold.

3. Thorough Market Research – Lenders want to know you’ve done your research since it is only by understanding the market that you can adequately identify opportunities as well as risks and threats. The Market Overview section of the bank business plan is where professional business plan writers will make sure this is evident.

4. Detailed Competitor Analysis – A competitor analysis will result from Market Research. It is a key to understanding how to position, market, and even price your product or service.

5. Personal Financial Information – There is a section that will be in your bank business plan that is likely not to be in any other type of business plan, and that is your personal financial information. In a bank business plan, professional business plan writers know to include this because if the business does not succeed, you as the owner(s) will become personally responsible. The lenders have one overriding goal and that is to be paid back with interest.

6. Moderate Financial Projections – Market research allows you to understand the maximum potential of the business. When presenting to lenders, professional Business Plan Writers know to use moderate expectations. Preparing a business plan for an investor would likely require a different strategy but, when it comes to a bank business plan, the idea is to show that you can survive – and therefore pay your loan – under the most likely and reasonable of circumstances.

7. Detailed Appendixes – Lenders tend to be highly detailed people and, as such, they don’t want to have to go searching for answers to their questions. They also tend to enjoy and prefer getting stuck in the details of things, especially as it relates to numbers. As such, you should have all the backup for your research, assumptions, and numbers attached to your bank business plan. Professional business plan writers may not do this for all audiences but, mostly likely will for a bank business plan.

Although most of these aspects or components will be in most business plans, the way they are written and presented will be specific to the bank business plan. Following the advice of professional business plan writers can help you ensure your bank Business Plan is well received. Or, if you are able, you should consider hiring one to prepare your business plan for you.

 

Combining a Pitch Deck and Information Memorandum to Strengthen the Business Case

It is common knowledge in the world of mergers and acquisitions that an information memorandum is produced to help prepare a business for sale. This document, sometimes referred to as a confidential Information Memorandum (CIM) or sales memorandum, is the key to giving all the information about a business’s past performance, current stance, and future outlook. In addition to this, a Pitch Deck may also be used. Together, these documents can be a powerful combination to help gain interest in the business that is up for sale.

Understanding the Information Memorandum

An information memorandum is to a business sale what a business plan is to a startup. In fact, the two documents are quite similar, it is their purpose that differs. In a business plan, the owners of the business intend to continue their ownership and involvement and are typically looking for outside investors or lenders to infuse capital. When it comes to an information memorandum the purpose is typically to sell the business, whether in full or a majority share. It will usually result in someone else running the business.

Despite the difference in the intended purpose, the documents themselves are quite similar. They both have the same fundamental sections:

1. Executive Summary – A brief overview of the entire business

2. Products & Services – A description of what the company offers and sells

3. Market Overview – A detailed review of the overall market, target markets, as well as competitors

4. Sales & Marketing Plan – How the business does or will market and sell its products to the end consumer

5. Management Team – Insight into the key players of the businesses as well as a description of the overall structure of management

6. Financials – Historical information (when available) as well as projections of future sales and expenses typically presented in the format of standard financial documents

Understanding the Pitch Deck

A pitch deck is a very short, abbreviated, visually appealing presentation, typically presented in Power Point or another slide show program. You may have a pitch deck for a business plan or an Information Memorandum. It will contain far less detail but, will give a general overview, typically with a great deal of visuals, to get people interested in reading the full document. The pitch deck is essentially a teaser to draw potential investors or buyers to review and consider the business.

The Winning Combination

The pitch deck and the information memorandum both play an important part in the sale of a business. While the information memorandum will provide the details, the pitch deck is all about attracting interest. The same information is presented in both documents but, what will differ is the depth of that information. Investors and those that buy businesses, see dozens of pitch decks and information memorandums in a regular week. It is often hard to make an information memorandum stand out given the traditional format it is expected to follow and the length of the overall document. The Pitch Deck is not only short but, also easy to look at as it is meant to be captivating. It also tends to follow a less conventional structure making it the perfect document to garner interest. The idea is the pitch deck will encourage an investor or buyer to look into the whole plan and decide to purchase or invest in the business. This may be accomplished easier with both documents than with just the memorandum.

How Market Research Informs Financial Projections in a Business Plan

 

Market research is a cornerstone of the entire business plan. It informs many of the decisions you will make about your business. It is also what will help support many areas of the Business Plan. This is perhaps most evident in the financials. Financial Projections Business Plan are heavily based on Market Research and they have a very close connection.

Understanding Market Research

In order to understand the impact of market research you must first understand what market research entails. In the simplest sense, it is an organized way to gain information about customers. Not only does this include things like looking at consumer data or conducting qualitative analysis, it will also deal with doing research on the overall industry/market, specific locations (if applicable), and competitors.

Understanding Financial Projections in the Business Plan

The financial projections in the Business Plan are the forecast of future positions usually expressed in the format of the three main financial statements. These statements are the income statement, balance sheets, and statement of cash flow. They are presented this way so that they can be used as goalposts, which will be compared to actual results – in this format – later on. This comparison, also called a variance analysis, allows you to carefully compare your expectations to reality and understand why they differ. You can then adjust your expectations for the future and get better at projections and forecasts.

The Connection

If your business already exists and has history, the future Financial Projections for your business plan will still be based on market research. Though, it may be to a lesser degree than when your business is brand new. However, the market, competitors, and consumer preferences are always changing so it will still inform a great deal about your business, even if you have a well-established history.

Competitor analysis will help you determine your own pricing strategy. Pricing is part of the equation to figuring out one of the most basic financial projections, the revenue forecast. The revenue number drives a great deal of the financial projections in the business plan. This includes the break-even analysis, profit & loss statement and the statement of cash flow. It will also be required to project the balance sheet but, not as directly.

The overall size of the market determined in Market Research will inform your maximum potential. If, in a perfect world, there was not competition. That’s why it is so important to understand the competition and how much of the market competitors are reasonably capturing. Many businesses use a small percent of market share as their goal. This, again, is where we can see how market research feeds into financial projections in the business plan.

Conclusion

Although it may be tempting to view market research as independent from Financial Projections Business Plan, that is just not the case. As with many other aspects of the business plan, they are intimately connected. The above only scratches the surface on how one informs the other. The truth is, the entire business plan is one cohesive document. It doesn’t matter how it is split up or what headers are used, all the pieces fit together and have an impact on the other, especially the financial sections.

 

A Business Plan vs. an Information Memorandum: More Similarities than Differences

Information memorandums are documents used in mergers and acquisitions to present information about the business. Although they are not the same as a business plan, they share a lot of similarities. As business plans are typically more common and therefor better understood, it is easier to understand an Information Memorandum when comparing it to a business plan.

Goal

The similarities begin with the goal of the information memorandum and the business plan. The goal of the information memorandum is simple. It is to interest buyers so that the business can be sold for the best price possible. The goal of business plan is not as straightforward. A Business Plan can be used strictly as an internal road map.

However, in most cases, whether it is used to apply for bank loan, recruit investors, or bring on additional founders, business plans are about “selling” the business. Not in the literal sense as with the information memorandum but, in the sense that you are convincing others the business is a good venture and will be successful.

Components

Business plans and information memorandums are so similar that many of the main components of the documents will be the same.

1. Executive Summary – In both the business plan and the information memorandum, the executive summary will be the first section and is a very brief overview and introduction to the entire document.

2. Company Overview – Regardless which document you are preparing, you need to give an overview of the business. This may differ slightly in a business plan if the business in not yet established. However, for a business plan for an established business and an information memorandum, this is where you will share history including topline financials, current client base, and other vital information on what the business does and how it does it.

3. Products/Services – At the core of any business is the product and/or services it offers. These need to be explained for a potential buyer in an information memorandum or for potential investors, loan officers, or other interested parties in a business plan for them to truly understand the business.

4. Company & Employee Structure – This usually focuses just on management but, can encompass all staff depending on the size of the business. Although the audience of a business plan won’t typically have a say in restructuring the business, in an acquisition or merger they almost certainly will, which is why this information is so important in the Information Memorandum.

5. Market Overview – The market overview is another component that will be found in both an information memorandum and a business plan. In both instances, this is based on extensive Market Research which will be required for both types of documents. You can never truly understand a business if you don’t understand the overall market in which they operate.

6. Financials – This is another core component of any business presentations whether that is a business plan or an information memorandum. Historical figures will be presented along with supported future projections.

It is easy to see that a Business Plan and an information memorandum actually have more in common than differences. At the end of the day, both documents are about presenting the key, vital information about a business to an outside party in the best light possible.