3 Ways Your Bank Business Plan Isn’t an Ordinary Business Plan

Be careful when writing your Bank Business Plan, because not every business plan is the same, and there are many things to think about when writing them. To begin with, consider its intended purpose. Is it for internal business organisation, or is it to try to get fundings?

Even when looking to gain investment for your business, the difference between getting a bank loan or seed funding from investors will determine how your Business Plan will be written. If you are looking to get a bank loan there are a few things to keep in mind when writing your bank business plan, and it all boils down to what you need to get your loan approved.

• A steady revenue

When writing your business plan it is important to consider your audience and what they are interested in. Unlike venture capitalists or angel investors who are looking for an increase in revenue for a higher ROI, loan officers are wanting to see if your business is able to maintain a steady revenue. Having steady revenue from your company's history in sales, or predicting one in your financial projections, will give enough reassurance that your business is financially stable and fit for repaying a loan.

• A good credit score

Just like investors, banks avoid taking risks and lending money to unsuitable borrowers. That is why a credit score is used to calculate if you are the right candidate for a loan. Your credit score is a number between 300 and 850 that determines how reliable you are as a potential borrower. It is calculated using the numbers from your financial history, where many factors are taken into account, such as:

• payment history,

• amounts owed,

• length of credit history,

• new credit,

• credit mix.

The higher your score is, the higher your chances are for receiving a loan and lower interest rates. Because a credit score determines your reliability as a borrower, having positive credit and a strong financial history included in your Bank Business Plan will greatly increase your chances of getting a loan for your business. Or, if your credit score is in the mid to low range, your business plan is a chance to explain that and give reassurance that you can repay the loan.

• Adequate collateral

Even if you have a good credit score, loan officers will want to see what assets you are willing to forfeit in the event that the debt is not repaid. Things that can be used as collateral for a business loan can include vehicles, equipment, buildings and inventory. Your credit score and the amount of the loan will determine the collateral’s value. If the borrowed amount exceeds a certain point, you may be required to pledge collateral that covers 100% of the loan, which may not be the case for smaller loan amounts.

There is no other business plan, quite like a bank business plan. They have a very specific objective which determines how they are formulated and what is needed to compose them. All the information included in them revolves around your business's and your own financial stability.

Having a good credit score, reliable financial history and suitable collateral is what sets them apart from other types of business plans. So keep in mind these 3 key differences when writing your bank Business Plan.

The Role of Financial Projections in the Bank Business Plan

Financial projections are crucial for any business and a basic component of any business plan. But they are also useful when applying for a bank loan. To qualify for a loan you will need to prove that you are responsible with your finances, and therefore will be able to repay your loan. In order to do that, you will need to have a stable cash flow, company growth, and a steady financial history. This makes Financial Projections Business Plan extremely helpful, especially if you are writing a Bank Business Plan.

Financial projections, or forecasts, are estimates of future financial outcomes, used to predict potential earnings and expenses. Using different financial models to determine the best financial trajectory, financial forecasts are an integral part of any decision-making process in a business. But they also have a very specific role when they are included in bank business plans. Their main goal is to convince lenders you are a suitable candidate for a loan, and this is how:

Predicting a steady revenue

The most obvious objective of financial projections in a bank business plan is to prove to loan officers that your business is capable of generating enough revenue to pay off the borrowed amount. Lenders want to be reassured their money will be returned (usually with interest), so showing a stable past (and future) revenue in sales is a necessity. Because financial projections in a Business Plan is used to calculate potential revenue and therefore cash flow, they are of utmost importance in a bank business plan too. They will show lenders that your business will generate enough income to repay your debt.

Showing responsible financial management

Financial projections in a business plan are all about crunching numbers, which are most often gathered from your business’s financial history. All of the previous sales and expenses, losses, and gains are taken into account and analysed. If your business has had previous success, then you have nothing to worry about. Financial forecasts can show loan officers that you are responsible for your business’s operations and its finances. This will give them confidence that all of the payments will be taken care of on time.

Predicting problems and offering solutions

Calculating future profit margin is not the only function of financial forecasts. Financial projections in a business plan are most often used for planning and budgeting projects or setting a straightforward and clear path for your business to follow. However, they are also used to predict possible setbacks that might occur. In that case, a strategy is put together to work around or solve these problems. Having this in your Bank Business Plan will give lenders reassurance that you have everything under control, and you will have no issues repaying your debt.

Having a watchful eye, every step of the way

Financial projections can be long-term (5 years) or short-term (1 year). They are often broken up into quarterly, or in the case of startups, monthly projections. This way businesses have financial, step-by-step instructions to follow, and objectives to achieve. This gives little to no room for oversight and shows that your business's finances and internal operations are carefully monitored and on track.

Financial Projections Business Plan has a very straight forward purpose: to help in the decision-making process, by estimating future expenses and revenue. But, in a bank business plan the direction of their objective change and their role transforms into something more. Financial projections instil confidence in lenders that the debt will be repaid. They become a tool of persuasion and reassurance, and a means of getting a loan approved.

You Can’t Have Financial Projections in Your Business Plan Without Financial Modeling

No business plan is complete without financial projections. But if you’re confused about the difference between Financial Modeling and financial projections, you're not the only one. Both are based on assumptions and predict potential financial outcomes. However, while initially, they may seem one and the same, they are most definitely not. In order to have the most precise financial forecast, you need to have the most accurate financial model of it. You simply can not have Financial Projections Business Plan without financial modeling.

What are they?

Financial projection or forecast is an assumption of a business’s future financial outcomes. It serves as a guidance and a reference point on a business’s path to success. They need to be revised and monitored regularly, in order not to lose track of progress. Financial forecasts can be long-term or short-term projections, and depending on the type of business, they can be done on a monthly, quarterly, or yearly basis.

However, any good financial projections in a business plan require accurate numbers and models to adequately forecast business’s progress and revenue. These numbers are gathered either from a company’s history in sales or through market research, and then used for making financial models. Financial modeling is presented in the form of a spreadsheet and is a process in which a company’s numbers are put through a mathematical equation to calculate a business’s potential financial outcome.

How do they work?

Financial models can be used for determining a company's market value or to better define its financial projections. This is because the nature of Financial Modeling allows for making multiple calculations. Changing the variables in the model's equation can produce different outcomes. Through this process, a financial projection can be made, and it is why it is the basis for financial projections in any business plan.

For example, if you calculate your expenses and compare them to your expected revenue, you will be able to see if you can break even, make a profit, or maybe prepare for short-term losses. If your earnings do not cover your expenses, naturally, you will be looking for ways to lower your business's costs in order to make a profit.

On the other hand, if your business is able to make a considerable profit after its expenses, you will have room for additional investments to increase, or speed up growth. Changing or adjusting these numbers will provide different results every time. This gives you many options to consider when making strategies for your business’s development, and therefore you will be able to make the most optimal financial projections for your business plan.

Why are financial models necessary?

Financial modeling is all about choosing the right path for your business, and formulating the best Financial Projections Business Plan. It is a crucial aid in making informed decisions for your business. And not only that, it is there to help you decide what your business goals are, and formulate a precise plan to achieve them.

If your financial projections represent your businesses road map, your financial models are the tools you use to evaluate different routes and plan your trip! It is the base for your business’s financial forecast, and there can be no Financial Projections without financial modeling.

Market Research: Not Just for Business Plans – It Matters for Your Pitch Deck Too

Market research is a great information source for determining a product's success with potential customers. Because of this, it is a common component of any business plan. It helps shape business plans into well thought through strategies that will guarantee success. But, they are not only useful for business plans, they can be extremely helpful for conveying information in your pitch deck.

Give the audience what it wants

A Pitch Deck is a presentation used to provide an overview of your business, most commonly used to impress investors and gain funding. There are a few ways in which it can achieve this. For example, one of the most important things for investors is ROI. Therefore, showing that early on in your presentation is a guaranteed way to get their attention. Investors avoid taking risks, and using market research to show that your company has a firm ground to stand on and a potential for growth will do the trick.

Sizing the competition

Market research is a process in which information is gathered from potential customers in order to predict future success of a product or service. It is usually conducted through surveys, product testing or focus groups, either done in house, or through a third party company.

The feedback collected from the customers can be used to determine the company's position in the market compared to its competitors in the industry. Showing that your business can compete in the market and not fall behind the competition is valuable information for the investors.

Quality over quantity, fact over fantasy

While both pitch decks and business plans are depictions of your business and its overall operations and goals they are not the same. Business plans are lengthy and comprehensive documents, describing your business down to the smallest detail.

However, pitch decks are designed to be short presentations. And because of the difference in their format, the information used for a pitch deck needs to be carefully curated. They should not be too long, or you will risk losing your audience’s attention, and consequently their fundings. Averaging on about 15 slides is enough to include all the necessary information. However, many experts suggest even less, so make sure to include just the right data.

That is why pitch decks require quality information over quantity. Investors do not just want to hear bold statements, they want to see proof. Market Research will help you substantiate your claims. It will provide the numbers and valuable data, which will give investors reassurance that your business has high value and potential for growth.

Being in the loop

Because the market is fast changing, being on top of those changes is crucial for your business growth and relevance in the industry. Showing investors that you did your homework proves that you know your customers wants and needs, and that your business is able to cater to them. Market research can show the investors that your business can solve a problem in the market that no other companys (or very few) are addressing. This shows potential for a high revenue, and a ROI for investors.

Market research is not just for business plans. It can be a useful tool in attracting investments. Therefore, using it for Pitch Deck can greatly help you impress investors and gain fundings for your business. It shows investors exactly what they want to see: a potentially successful business that is a low risk investment, with a lot of room for growth and a high profit margin.

Approach Your Business Plan Like Professional Business Plan Writers

Writing your own business plan is definitely not an easy task. It is an important document that serves a few purposes, whether it is to track a company’s progress, serve as a roadmap to its success, or be a tool for securing funds from investors. Whatever it may be, it needs to be well-formulated, and compelling, so it helps to approach it just like Professional Business Plan Writers do. Here is how:

It's all about numbers, data, and (market) research

First things first, gather your data. Whether through financial modeling, or Market Research, having all the necessary information is the foundation for any business plan. It will help you make informed business decisions and consequently formulate a successful plan.

Additionally, if you are looking to secure fundings or get a loan, you need to show your business has a strong footing. Avoid making general statements and get specific. Back up your claims by including all the necessary documentation as proof in the appendix.

Include everything: the good, the bad, and the ugly

It is understandable that you wish to show your business in the best light possible, but be wary of overstating your company’s success. Many fall into a trap of presenting only the good side of their business, while ignoring the bad. It is imperative, to be honest in your business plan.

Potential investors are looking for transparency and real numbers. Displaying all the business's shortcomings show your integrity and build trust with investors. A tip from a professional Business Plan Writers is to include a well formulated strategy for overcoming your business's pitfalls.

Know your audience

The purpose of your business plan determines how it should be written, and it greatly depends on who will be reading it. Professional business plan writers know that a key to grabbing your audience’s attention is to know where their interests lie and then formulating your plan accordingly.

Whether they are venture capitalists, angel investors, or investment bankers, an ROI or an exit strategy is one thing to consider when writing your plan. Providing such information in your business documents is a sure way to get them intrigued.

Your attention, please

Last, but not least, an executive summary. It is the first, and one of the most important, documents in a Business Plan. The executive summary is the first impression of your business, so make it a good one. It provides a brief overview of your business and it should not be longer than one page. Any longer than that and you will risk losing your readers' attention.

Executive summaries need to be concise but also inviting your audience to continue reading. According to professional business plan writers, a good rule of thumb is to write your executive summary last. That way you can make sure it is precise and includes the most important information.

Professional Business Plan Writers know all about writing business documents. They know what to base them on, what works and what doesn't, how to formulate and organize them. Therefore, using their approach is a guaranteed way of writing a compelling business plan.

How M&A Firms Benefit by Having Professional Business Plan Writers Prepare Their Information Memorandums

Growing a firm can mean having to bring new people in, and having to choose the right people for the job can be tricky. This means making a decision between hiring new personnel, or outsourcing to other companies. For M&A firms, this is a matter of finding the right professionals who know and understand the intricacies of the corporate world, especially the ones who are familiar with the delicate process of mergers and acquisitions. Because such events require preparing a lot of documents, having someone with experience in writing these is a must. Therefore, having Professional Business Plan Writers compose information memorandums will provide a few benefits for M&A firms, more specifically regarding time management.

Make room for other priorities

Writing all the necessary documents for mergers and acquisitions can be lengthy and time consuming. Instead of writing all the documents themselves, having professional business plan writers prepare Information memorandums frees up time for M&A firms. All this free time can be used productively. For example, having more focus on finding new clients will result in company growth and an increase in revenue, which is a given. Even if the goal is maintaining a steady revenue, outsourcing to professionals drastically reduces the stress of juggling various tasks and managing time to perform them. Getting rid of one task, makes more time for completion of another.

Time is money

In addition to having more time to look for new clients, outsourcing to professional Business Plan Writers provides an opportunity to quickly move on to the next client. Having a faster information memorandum turnaround, means having the ability to close deals faster. This naturally results in having time for more clients, and taking on more work. For a company to grow, having good time management and productivity go hand in hand. Company profits greatly rely on time spent on a completion of a project or a task. The math is simple, a fast turnaround on business documents, results in more completed deals, which in return brings higher earnings.

Multitasking

An often overlooked benefit of having professional business plan writers formulate information memorandums is in getting rid of rigid and constrictive time schedules. This gives room to freedom and flexibility in time management. But just as importantly, it paves the way for more effective and effortless multitasking. To be more specific, M&A firms will be able to take on more clients at once if they outsource their Information Memorandums to other companies and professionals. Just as it is important to close deals quickly, having to work on multiple projects at once will prove to be extremely profitable to M&A firms.

Professional business plan writers offer plenty of benefits to M&A firms. Having a helping hand in writing information memorandums is a great way to increase productivity and revenue as well as help with time management and multitasking. Getting professionals to help with preparing these documents can make more room for focusing on finding new clients, closing deals faster and working with more clients at once. Therefore, outsourcing to Professional Business Plan Writers is definitely something to consider when wanting to increase or speed up company growth.