4 Questions to Answer when doing Market Research for a Bank Loan Business Plan

It is well known that Market Research is vital for any business. By doing market research, you will understand who your customers and competitors are, as well as the demand for the product/service you provide. A lack of funds when establishing a business may slow up your entrepreneur journey. One of the best ways to increase your business efficiency is to apply for a bank loan by composing a successful business plan.

Here are the 4 questions you need to know the answers to when doing market research for a Bank Business Plan.

What is the purpose of the research?

When doing any type of research for a bank loan business plan, first, you need to establish your purpose. What is the reason behind the market research? Is it to analyze past mistakes, problems, or successes? Or to establish who your customers are? Or, do you have other reasons?

Before even starting your research, determine the purpose.

What is the outlook of your industry?

Now, you have established the purpose of your Market Research, what is next? Summarize the state of your industry.

Determine the direction your industry is heading, and be sure to have reliable data from trusted sources to support your conclusion.

Your bank loan is more likely to be approved if you do your homework on the industry of your business.

Who are your target customers?

After acknowledging the outlook of your industry, focus on your customers.

This is an important segment of market research for a bank loan Business Plan. Not every person can be your customer. To establish who your potential customers are, you may consider the following criteria:

• Age
• Gender
• Location
• Education
• Income
• Occupation
• Family status

Implying these metrics, you will be able to define who your target customer is.

A common approach is to create a buyer persona. This is a fictional character that represents your ideal customer. Your business can have multiple buyer personas.

Creating our buyer persona

Let us say that we own a business plan writing company – like Joorney, for example, and that we need to establish our buyer persona based on the data that we have.

• Here is an example:
• Occupation: Immigration Lawyer
• Education: Harvard University
• Age: 45
• Income: $120,000
• Location: United States of America
• Gender: Male
• Family status: Married

Who is Your Competition?

The final segment of doing successful market research is to study your competition. It is crucial to understand who your competition is. Research what your competitors offer to the customers, and who is their target audience. It will not do you harm if you spy on your competition, because this is the smartest way to learn the strengths and weaknesses of your competition.

Doing thorough market research for your business will help you compose a successful business plan, and having a successful business plan means that your chance of bank loan approval will increase. Simple as that!

If doing deep market research seems difficult, our Professional Business Plan Writers at Joorney will be happy to help.

8 Things Professional Business Plan Writers Focus on when Writing a Business Plan

 

A business plan is not like any other document. It helps you determine and accomplish your goals. Professional Business Plan Writers are well aware of the importance of this document to any business owner.

“Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set yourself up for success.” – Yogi Berra

Here are 8 things that professional business plan writers at Joorney focus on when writing a business plan.

Executive Summary

This is the first section of your Business Plan. It should capture your mission statement, the physical location of your company, and a summary of investments or purpose for your business plan.

Business and Product/Service Description

On this page, professional Business Plan Writers focus on a brief description of your business and the product or services you offer. Your product/service description should include:

- Explanation on the function of your product/service

- The pricing of the product/service

- Comparing your product/service to the competitors

- Describe the benefits of your product/service to the consumers

- Your buyer persona(s)

Industry and Market Analysis

These two analyses will assist you in recognizing the demand for your product or service and the possibilities your company might have. Industry and market analysis will show the position of your industry, and who your potential consumers are.

Competitive analysis

In this section of a business plan, you will focus on your competitors. This means that you will assess and analyze the strengths and weaknesses of your current and potential competition. If you are a first-time business owner, you might be confused about gathering information about your competitors.

Professional business plan writer at Joorney have a few tips:

- Visit their website

- Check out their locations

- Review their marketing materials and campaigns

- Search the Internet (Google is your friend)

Marketing

This section is for your marketing plan where you can explain your marketing strategy and state your marketing assets – website, blog articles, social media, brochures, videos, etc.

Personnel

This is where you describe your current and future employees.

Here are the main components to consider when writing a personnel section for a Business Plan.

• Chart – this chart is made for the investor to have an overview of the staffing structure of your company.
• A description of the job function of every employee
• Salary – details on yearly or hourly pay
• Type of Hire – to state if an employee is a full time or part-time employed
• The time of hire – to state how often will you hire employees

Financials

One of the main sections of a business plan is the financial section. This will determine the outcome of an investor's decision or any other audience you may be using the business plan to appeal to.

Here you will present your sales forecast, break-even analysis, expenses and profit estimated, as well as a balance sheet.

Be cautious and realistic about your forecast.

Writing a business plan is not as challenging as it may seem if you have the appropriate guidelines. We hope that these tips of our Professional Business Plan Writers may help you with composing your business plan.

If you have any difficulties with writing a business plan, feel free to contact us. We will be happy to help!

5 Important Steps for Creating Financial Projections in an Information Memorandum

If you are stuck writing your Financial Projections, fear not. There are a few crucial steps to take to make the whole process less daunting and a bit more palatable. So there are a few things to consider in order to make the best possible financial forecasts to include in your information memorandum.

Step 1: Gather all of your data

No matter the purpose for your financial projections, the first step is always the same. Collect all of your numbers, your history in sales and your business’s costs and expenses. This can include things like your rent/mortgage, utilities, payroll, etc.

Step 2: Consider doing market research

Market research can be a great source of information that can benefit your business and help you create the most accurate financial forecasts. It looks into consumer trends and relies on direct customer feedback that can determine how much potential customers value your product, and help you set the price for your products accordingly.

It will show your buyers that your business can compete in the market, have steady revenue and room for growth, which is what the buyers expect to see in an Information Memorandum.

Step 3: Crunching numbers

After you collected all the information and data you need, it is time to proceed with making your financial projections by putting all of your numbers into an Excel spreadsheet. There are three forms to consider making when making your financial forecasts.

• Income statement
• Cash flow statement
• Balance sheet

Income statements show how much revenue your business makes after all of it’s costs and/or losses. Cash flow statements show how much money you have on hand for a specific period. And balance sheets show your business’s assets, liabilities and owner’s equity.

While all of these documents can present potential buyers your company's previous financial statements, they can also be used for showing its financial future as well. This way the buyers will be able to see where your business is going and if it has potential for success.

Step 4: Short term vs. long term projections

Depending on your needs, Financial Projections can be based on yearly or quarterly time periods. However, sometimes monthly forecasts are made for startups or for internal business operations and planning.

But if you wish to sell your business, the potential buyers will be interested in seeing longer projections, spanning up to 5 years. Therefore, it is better to include longer financial forecasts in your information memorandum.

Step 5: Hope for the best, plan for the worst

Because a big part of financial forecasts is making assumptions about your business’s future performance, and the future is hard to predict, you will need to include multiple financial projections in your information memorandum.

That is why you will need to have the worst case, best case, and everything in between scenarios of your business’s potential finances. And you will have to present them all to potential buyers. You should be transparent and honest about your business’s shortcomings, especially because this can be a great opportunity to turn your weaknesses into your strengths.

Presenting possible problems, expenses and losses and including measures to overcome them will also show interested buyers that your business is taking everything into account and will have no future shortfalls.

The Steps Above are a Sure Path to Forecast Success

Financial projections may seem like a difficult task, but having a step by step approach to writing them makes for a better experience and produces better results. Breaking down your tasks to smaller objectives and goals ensures the most accurate financial predictions and a top notch Information Memorandum as well.

The Difference Between a Business Plan and a Pitch Deck

 

Whether you are a business professional, a startup founder, or an ambitious serial entrepreneur, you must have wondered: What is the difference between a Business Plan and a Pitch Deck? Which of these documents fits your needs the best? Are business plans outdated? Do you need both?

When you are busy building and growing your company, you do not have all the time in the world to experiment and try out all the options. You want what is best for your business.

Here is the difference between a business plan and a pitch deck.

Business Plan

A business plan is a vital document for any business. It is recommended since owning a business has become a thing. Forever, right?

So, what is a business plan? It is a document that contains all information about your company. It states your plans, as a business owner, for the future. It includes your company description, products, and services description, market analysis, Financial Projection, etc.

This is a 3- to 5-year forecast, that declares where your company will be and how it will get there. A business plan also describes your personnel, and what they will bring to the table.

A business plan is made for potential buyers to put their minds at ease when deciding whether or not to fund or purchase your company.

Main characteristics of a business plan:

- Created for investors and potential buyers

- Text-based

- Between 20 and 100 pages

- Fully researched document

Pitch Deck

We can all agree that in a world of business, everything is too busy and too fast. Capital investors do not have the time to read through every application and thousands of pages. It is almost impossible to read the whole business plan for every applicant. This is where a pitch deck comes in hand.

A Pitch Deck is a brief slide-style presentation of your business. This is a 10 to 20 slides presentation that includes:

- Your company description

- Employee description and their role

- Company advantages

- Company’s solution to a potential problem

- Product and Service description

- Market research

- Competition

- Business model description

- Funding requirements

- Financial overview

As you can see, a pitch deck is a shorter and more visually oriented document than a business plan. But do not be fooled, for a successful pitch deck, you need to do proper research and analysis. The aim of this document is to spark investors' initial interest in buying or funding your business. A perfect pitch deck is clear, concise, and engaging.

Main characteristics of a pitch deck:

- Created for investors and potential buyers

- Visually based

- Between 10 and 20 slides

- Fully researched presentation

Today, you may or may not need both of these documents. It depends on your goals. If you ask me, I would have both. After all, a pitch deck is like a younger, cooler, shorter sibling of a business plan. When having an established and well-researched Business Plan, you can easily summarize it into a presentation. With the help of a skilled designer, of course.

Whatever you decide to do, Joorney is here for you. Our business experts and experienced graphic designers can compose impeccable business plans and pitch decks. Feel free to contact us for more information.

3 Reasons Why Market Research is Important for an Information Memorandum

What is an Information Memorandum, and why do you need it? An Information memorandum, also known as an offering or sales memorandum, is a document primarily made for potential acquirers or investors. It describes what type of transactions you would like to have with an investor – how much of your business you are selling and what the audience will gain for their investment.

An information memorandum is similar to a business plan but more transactional. This document is necessary if you want to invite investments or outright sell your business. Market Research represents the activity of gathering information about the customers using your product or service.

One way to gather information is by directly contacting the customer through interviews, online surveys, and questionnaires. Market research is also crucial when it comes to your competitors. You need to know who your competition is and how well they operate their business.

Here are 3 reasons why market research is important for an information memorandum.

Information

Market research is important for gaining information about your competitors and industry which can affect your future Financial Projections. If you are a business owner, you probably consider yourself a hands-on type of person. You may also think that you are well aware of the business industry your company is in, and that you know the market.

Unfortunately, in most businesses, that is not the case. No matter how much a business owner knows about the market, it may not be enough. When it comes to any market, it changes and evolves all the time. Novelties and new trends can appear in any industry daily, and you have to keep track of the changes.

Business Strategies

When you gather information from your Market Research, it is logical that you will use it in a certain way. This information will help you make vital decisions for your business.

For example, if you see that the price of a product or service skyrocketed, you will likely also raise the price of that specific product or service. Or, for instance, if market research shows that customers are interested in a new product that your company does not have, what will you do? Market research will help you create new or change old business strategies. That way, when reading your information memorandum, investors could see a financial potential with your company.

Challenges

Like any other business, even yours has some challenges. Market research will help identify your challenges and weaknesses and detect the source of them. When you manage to notice and acknowledge the challenges of your company, you can address them.

Turning your weaknesses into opportunities and strengths is a selling point to the investors. Your business will look more attractive if you present how you overcame challenges and made the best outcome out of the situation. Conducting market research will secure you with potential investors in no time.

Composing a perfect information memorandum requires professional assistance. The right team will gladly help with creating an impeccable Information Memorandum for your company.

A Three-Statement Model of Financial Modeling in a Bank Business Plan

Let’s assume that you want to build a new financially sustainable business, but you need some funding. To raise the funding, you will go to a bank, and ask for a loan. Asking a simple question is easy, but convincing a banker to fund your business is not easy at all. You need to provide your banker a bank business plan. A Bank Business Plan for your business is like an ID for you, without it, no one will have any data on you or your business.

A bank business plan is an overview of your company’s goals and future, and what will you do, as a business owner, to achieve them. Before composing a bank business plan, you need to do Financial Modeling, which can become your worst nightmare if you do not know how to set it up.

Financial modeling is the process of creating a dynamic, working summary of a company’s expenses and earnings in a form of a spreadsheet. The information about your company’s expenses will affect the banker’s decision about the loan.

Here is a three-statement model of financial modeling in a bank business plan.

Income Statement Model

The income statement model results in the projection that allows you to present your company’s profits and losses by showing revenue and costs. This way, the banker can have a clear vision of the financial state of your company. Tracking an income statement is very useful because it can help you determine how to make a profit. It will help you decide things like whether to increase revenue by decreasing costs, remove unprofitable products or services, decreasing inventory, etc.

To be a successful entrepreneur and have useful financial modeling in a Bank Business Plan, track and analyze your existing income statement then make reasonable predictions about the future.

Cash Flow Statement Model

The cash flow statement model allows you to visualize how cash is flowing in and out of your business. This statement model shows the banker what happens to your money on a monthly basis. Put yourself in a banker’s shoes. If you are likely to loan money to a business, you will want to know if the person owning that business is reliable. A banker will want to see what happens with the money in your company and how you manage it. By looking over your cash flow statement model, the banker will know if you can fund your day-to-day operations or if you have a debt or not.

Balance Sheet Statement Model

A balance sheet statement model shows “how rich” your company is – or who owns it. This financial statement model represents assets, liabilities, and shareholder’s equity in your company. It is called a “balance sheet” because the sides of this equation must be balanced. For example, if a company takes a ten-year loan of $20,000, its assets, as well as the liabilities will increase by $20,000. A balance sheet is the financial health of your company. As your doctor would like for you to be healthy, your banker will like the same for your company.

Financial Modeling is one of the most challenging parts of preparing a business plan. To compose a successful financial model that will lead to accurate projections, you need to know accounting, finance, and business metrics. A team of skilled Business Plan Writers can help you create a perfect bank business plan in no time!

3 Tips for How to Present Financial Projection from Your Business Plan in a Pitch Deck

The act of showing your Financial Projections in a pitch deck is not merely a presentation. You will need to defend those numbers you are presenting to sell your business. Having the perfect financial projections in a pitch deck is not enough to make a deal with an investor. You have to know how to present them.

A pitch deck is a brief presentation of your business plan to a potential investor, business partner, or customer. Every Pitch Deck should include some version of your financial projection.

A financial projection is a prediction that uses existing or estimated financial data to forecast the future of your business. These predictions are done on a monthly or annual basis.

To have a successful pitch deck, you need an accurate financial projection. Here are 3 tips to successfully present your projections.

Be Conservative

Talking about the future, especially when it comes to your business, can be exciting! After all, you are using your imagination and creativity. When you represent your business with a pitch deck, you will present a set of three- or five-year financial projections, which is not easy at all.

Investors will, from their experience, cut your predictions in half, and they will not consider you as a serious investment opportunity if they are overinflated. This is why your financial projections need to be conservative. A conservative approach to a Business Plan is more realistic, logical with precise goals. It is a step-by-step approach that includes many details on revenues and costs.

Be Direct

When you want investors or loan providers to finance your idea or business, your storytelling has to be top-notch. No one will listen if your presentation is boring and not clear enough. When presenting your financial projection, make brief and comprehensible presentation slides. Do not talk about any irrelevant statements. Make it clear why your business model is viable and why it can be profitable. The basic financial projections will be successful if you always include a cash flow statement, sales forecast, balance sheet statement, and income statement.

Be Invested in Research

So, you are presenting your business with a Pitch Deck and expect the investors to finance it, to bet their reputation on you, and use their connections. For that to happen, they will expect you to do your research. There is no point in owning a business if you do not know the answer to these questions:

1. Who are your competitors?

2. Who are your customers?

3. What sets you apart from others?

If you want someone to invest in your business, they will need to invest in you, and they will never do that if they do not trust you. The effort you put into your market research will be shown through your financial projections in the business plan. As you present your business, the investors will likely be asking many questions about the numbers. You will have to defend those numbers if you want to make a deal with an investor.

If you have difficulties with composing Financial Projections or the business plan itself, consult an expert business plan writing firm or advisory experts like www.joorney.com.

The Importance of Financial Modeling in the Bank Business Plan

Writing a Bank Business Plan can be a nerve-wracking task. It is a document that represents a deciding factor in getting a loan approved. Its main objective is to show that your business is eligible for repaying a loan in a timely manner. So, keep in mind that it has a very specific objective. Including your history in sales is a must, but unfortunately not enough. While it is important to show every aspect of your business, maybe none is more important than prospects of a steady income. This is where Financial Modeling comes into play.

Financial modeling, in this context, is a process of creating a future financial projection of a company. This number crunching operation is performed in order to calculate possible financial outcomes of a business. A mathematical equation is used in which any variable can be changed to achieve a different result. For that reason, financial models are of great use in a bank business plan and can serve many purposes.

Creating financial projections

Just like for any other business plan, Financial Projections or forecasts are extremely important for bank business plans too. They can show loan officers that your business can generate enough income to be able to repay your debt.

Financial models are used to create financial forecasts of future revenue and expenses, and therefore are a useful document to present to lenders. What lenders are most interested in seeing in a business is financial stability and using financial modeling to create financial projections can help with that.

Oftentimes, financial projections are broken into monthly or quarterly forecasts, which helps businesses keep track of their finances, and helps lenders estimate the credit risk.

Predicting and solving problems

An extremely useful aspect of financial modeling is that it is great at anticipating and detecting potential problems and shortcomings. This comes in handy when writing a bank Business Plan, as you will be able to adjust your expenses.

Depending on the most optimistic, pessimistic and realistic scenarios, businesses often make a few financial projections, by creating multiple financial models. This is how they are able to see what are the best, the worst, and the most likely outcomes. Knowing in advance what obstacles may come your way will give you an advantage and help find you a solution.

Showing you are prepared for any curveball thrown your way will more likely get you approved for a loan.

Making responsible financial decisions

Financial Modeling is a great tool for managing and organizing your business’s finances. Knowing exactly where you can cut costs or allocate funds can mean the difference between failure and success.

Being able to save money means being responsible with your spending and avoiding excess costs. Financial models can help you with deciding what expenses to take on and when. Making financial models can help with making smart and informed decisions. Being responsible with your finances makes you a low risk and more appealing borrower.

Financial modeling is an essential tool for any Bank Business Plan. It demonstrates to loan officers that you are a good candidate for a bank loan by proving that you can generate a steady revenue, are responsible with your finances, able to make good business decisions and overcome potential issues. If you’re not sure how to create one, consult a professional!

The Main Sections of the Investor Business Plan and Pitch Deck

A Pitch Deck and investor business plan are both needed in order to raise capital for your business. They may not be the same, but they both include and prioritize information that would grab investor’s attention. That is why they have a few sections in common despite having different formats.

Introduction (executive summary)

When writing any document or presentation you need to start with a good introduction. It needs to be interesting and above all engaging, while summarizing the document’s content. In a pitch deck, an introduction is included on the first slide, but in an investor Business Plan it is usually a separate section, the executive summary.

Investors usually have piles of business offers on their desks or in their inbox, so they value when your documents get straight to the point. This means that introductions should not drag on and should include the most relevant information first, in order to make your documents stand out from the rest.

Financial projections

Investors are looking for many things in a business, but one above all others, is an attractive ROI. They avoid taking uncalculated risks, so showing them that your business is on a path to success is necessary to secure fundings for your business. Presenting your financial projections is the best way to prove your potential financial success and pique their curiosity. Financial projections are estimates of future revenue. Proving that your business is able to generate enough revenue to be worth investors' time and money is something to definitely include in your business plan or pitch deck.

Market research and marketing strategy

In order to run a successful business you need to know if there is a market for your product or service. This is something that investors will definitely want to know before deciding to invest in your business.

That is why market research is a necessary component in investor business plans and pitch decks. Market research is a direct way of knowing customers' opinions of the products or services your business is offering. Having direct feedback from the consumers helps provide pivotal information that can be used in determining your business’s future success.

Additionally, knowing how to reach potential consumers is another part of the equation for success. Sales can suffer without a good marketing strategy. So, investors will want to know if your business will be able to reach its target market and increase its brand awareness. Overall, Market Research and marketing strategies prove to investors that your business has potential to achieve its goals and secure them a ROI.

Management team

Showing that you have the best person(s) for the job is a necessity if you are looking to gain investments. Investors will want to know if your team has the right skills and experience to market and sell your products and deliver the results you promised. This information should not be exclusive just to the Investor Business Plan, but include it in your pitch deck too.

When looking to secure findings for your business it is crucial to prepare the right documents, and knowing what to include in them is half the battle. Both your investor business plan and Pitch Deck need to include information that will convince investors your business is a high profit and low risk investment. That is why they share similar components like an attention grabbing opening, finances, your team description, market research and strategy.