Can you apply for a Bank Loan with a Pitch Deck? Business Plan vs. Pitch Deck

 

When applying for a loan, it makes sense to present detailed documentation about your business, including all of its most important (financial) aspects of course. The purpose of these documents is to show your business’s prospects of repaying your debt. So it is understandable to submit the most thorough bank loan business plan you can formulate. However, you may be surprised to know that you can apply for a bank loan with a Pitch Deck just as well.

Namely, because loan officers can be overwhelmed with dozens of lengthy applications, having something compact that conveys the most important information will immediately stand out in the sea of Bank Business Plan pages. So here are some pros and cons, to help you choose the best application format.

Business plan - a comprehensive description

Business plans are a necessity for operating any business. Besides providing great guidelines that can help you make better business decisions, they are a detailed description of your business as well. This makes them extremely beneficial, especially if you wish to apply for a bank loan.

Bank loan business plans include your business’s past, present and even future finances, in addition to everything else that will convince loan officers just how successful your business is, and more importantly, will be. Lenders will be looking for all of the factors that show your business will keep producing a steady revenue: how it is organized, how it is operating, how skilled your personnel is, and how responsible you are with your finances.

• Dangers of TL;DR

Like mentioned before, keep in mind that long bank loan Business Plan can be an immense strain to the reader. Being bombarded with information can be tiresome, therefore, submitting lengthy documents can backfire on you. Loan officers can get lost in the array of data you have to offer about your business. The goal is not to make them yawn and want to skip to the next page (or worse - next business plan), but to keep them engaged and interested instead.

Pitch deck - when less is more

Applying for a loan with a mere presentation can seem unorthodox, but it surely has it’s benefits. Because you will be limited to a few slides, you will be forced to put only the most crucial information in them. Stripping your business to its bare bones will instantly show loan officers exactly what they are looking for. Skipping all the formalities, and getting straight to the point is surely a great way to grab someone’s attention. But not only that, having a limited number of slides will also force you to get creative, and find the best way to present your business’s heart and soul, leaving a lasting impression on your audience.

• Sometimes, less is just less

Making an attention grabbing Pitch Deck is definitely not as easy as it looks, because what seems to be its strength can also be its weakness. Since pitch decks are limited to only a few slides, you really need to make an impactful presentation, or things can easily go sour. You have a small window of opportunity to impress your audience, so make sure every slide counts and think carefully about how you will present your information to them.

Both Bank Business Plans and pitch decks have their good and bad qualities. When it comes to the battle of the formats there is just not a clear winner. But knowing all of the benefits and downfalls can definitely help you make the best decision. It all comes down to the individual case, so think long and hard what is best suited for you and your business. In either case, make sure your chosen format addresses a loan officers main concern: whether or not you’ll be able to repay your loan!

How to do Financial Modeling for a Pitch Deck

 

Financial Modeling may be the deciding factor in gaining investment for your business. It is certainly what investors are the most interested in when you are pitching your business idea to them. That is why having an outstanding pitch deck is so important. But, fitting your financial model on a few slides can be a challenge, so here is the best way to do it.

Financial modeling in 4 simple steps

Before you even make your Pitch Deck, first make sure your financial model is complete and accurate. It is a number crunching process, but to make the whole experience a bit easier, it can be broken down into four steps:

1. Collecting data - Start by gathering all of the necessary information you can find. Look into your business’s history in sales, get data from doing market research, anything and everything you can get your hands on. The more the better.

2. Making assumptions - After getting every piece of information you can find, proceed by making a list of assumptions. This step should be taken very seriously, since the rest of the model will be based on it.

3. Forecast the 3 statement model

The three statement model consists of income statement, cash flow statement and balance sheet.

4. Income statement will show your income and expenses for a certain period.

5. Cash flow statement shows how much money is entering and leaving your business, or how much money your business has at hand for a specific time frame.

6. Balance sheet shows how much your business owns in assets, liabilities and shareholder’s equities for a given period.

7. Risk assessment and sensitivity analysis - financial modeling is not complete without testing your model first. By doing assessments and analysis you are checking for any discrepancies in your model, checking to see if it will hold up, and understanding where you may fall within a realistic range.

Organizing your financial model on slides

After you’re done with financial modeling, the next challenge is trying to figure out how to present it in your Pitch Deck. This is by no means an easy task, and there are a few things to consider:

• Consider the number of slides

The whole pitch deck should not contain too many slides. Opinions on the slide number can vary. Some say no more than about 20 slides are necessary, but recently the trend is to keep your presentation down to only 10 slides. Keep in mind that only a fraction of those will be intended for your business’s finances, so your financial model may take up only about one or two slides.

• Consider the visuals

Having only a couple of slides for your financial model will force you to get creative when presenting your numbers. The best way is to use visuals to convey information such as graphs and charts. But think about their design as well. It is not just about having an aesthetically pleasing slide, but it should be easy to read. Think about using adequate font and font size, and do not forget about having enough negative space, meaning do not cram your slide with too much text and visuals.

Preparing a presentation is not easy, especially if you have a lot of material to work with. A challenge with pitch decks has always been how to present all of your business’s aspects in a limited number of slides, and having to incorporate Financial Modeling into them does not make things easier. Luckily, using the aid of compelling visuals will get the job done every time.

4 Common Financial Projection Mistakes when Writing an Information Memorandum

 

If you wish to sell your business or to do a merger, you – or an M&A advisor - might already be busy writing your Information Memorandum. By now, you might have noticed that it is not as easy to write it as initially seemed, especially when it came to making financial projections. Making projections is a long and complicated process and it is understandable that you are having trouble writing them. People usually make the same mistakes when projecting their finances for any business plan, and the same can be said for information memorandums. So here are a few common mistakes to avoid.

1. Making incomplete projections

When doing mergers and acquisitions it is logical to want to present your business in the best light possible. Information memorandum is a way to introduce your business to potential buyers, and it is therefore imperative to leave a good impression on them. However, for exactly this reason many people fall into a trap. They present only the good side of their business, while hiding the ugly. When presenting your projections it is imperative to be honest and show the whole picture, even if it is not favorable. But, fear not, a good strategy in this case, would be to include solutions to any future problem you may predict. After all, that is what Financial Projections are for anyway.

2. Not making enough assumptions

Another way people make incomplete financial projections is by making their list of assumptions too short. Making assumptions is a basic step in writing your projections, and maybe one of the most important ones. All of your projections will be based on these assumptions, therefore you should make as long a list as you can, in order to be able to make the most accurate projections.

3. Not doing market research

Entrepreneurs who underestimate market research, are missing out on all of the benefits it can bring to their business, especially when it comes to making financial projections. Having a good grasp of the market and its trends can be of great help when making your projections. All the data collected through Market Research can help you make your list of assumptions. Knowing all the changes the market is undergoing, or the ones that are about to happen, is a sure way to make the most precise financial predictions for your business.

4. Not basing your claims on data

Your Information Memorandum has to be based on facts about your business. So, when casting your projections, do not make your assumptions out of thin air, they have to come from somewhere. Just because you experienced a steady revenue growth for the past couple of years, does not mean it will continue into the next one. There are many contributing factors that can change the course of your business operations. That is why gathering all the information you can get your hands on and making your assumptions on actual data is what will make your financial projections credible, and consequently your information memorandum.

Avoiding these common mistakes will help you make the most realistic and accurate Financial Projections and a well formulated and well written information memorandum. Both of them are needed for a smooth merger and acquisition process, since they may be the biggest contributing factor for a successful transaction.

Why You Should Get a Professional Business Plan Writer to Write your Financial Projection

When running your small business, cutting out the middleman may seem like a good way of decreasing your costs and expenses. But a lot of the time this kind of business strategy leads to a DIY mentality that can, quite frankly, be detrimental to your bottom line. Sure, if you are capable and know what you are doing then go for it. Just be aware of the toll that it can take on you and your business. Be aware of your limitations. Taking on more than you can handle can have serious consequences. So if you need to write your financial projection, consider hiring a Professional Business Plan Writer, and here is why.

Experience is everything

Having expertise means you’ve seen it all. It means you’ve been through enough to know what works and what doesn't. But can you really say that for writing financial projections yourself? Well, professional business plan writers can. They know the ins and outs of writing them and know all the tips and tricks.

Writing projections is definitely no easy task. It involves complex calculations, tests and analysis. Not to mention the various steps needed to complete them. It can definitely be an overwhelming task for a novice, but a walk in the park for someone with experience in this field.

It's all about getting the job done

Let's face it, a lot is hanging on the line when it comes to writing Financial Projections, the success of your business to be more exact. Writing them properly and diligently is a necessity and something to be taken very seriously.

Most of the time projections are used to gain investments or loans, or even just for organizing and managing a company. Therefore, when your reason for writing them is so immensely important, then half baked projections will not get the job done. Investors and loan officers will not take them nor your business seriously and brush them off immediately. But, professional Business Plan Writers know how to make the most complete and accurate projections. So do not take for granted the quality work they can provide you, especially when the stakes are so high.

Better task management

Like mentioned before, doing everything yourself may seem tempting but it is definitely not necessary. Multitasking may seem like a useful skill, but it can result in jobs half done, which is not something you want for operating a successful business. When running your business there are a lot of things to do and take care of. It is hard work to stay afloat or maintain growth, so why burden yourself unnecessarily? Outsourcing your Financial Projection writing to experts, can free your hands, and let you focus on other aspects of your business.

Having a professional business plan writer write your projections for you is not only freeing your hands, but mind also. Making projections is a long number crunching process and being free from it will give you an opportunity to set your mind on other projects. This way you will have better focus for your tasks and therefore, better outcomes for your business.

Do not take writing financial projections for granted. It is not an easy process and it most definitely needs to be done properly. The success of your business depends on it. So having Professional Business Plan Writers make them for you will save you a lot of headache in the long run. Rest assured that they can provide you with the best possible projections for the best possible achievements. So next time, think about hiring one when you’re in need of financial projections.

Why You Should Research your Market and Industry for an Information Memorandum

 

When doing mergers and acquisitions it is necessary to provide the most accurate information about your business, but also be persuasive and convincing. So if you're wondering what to include in your Information Memorandum, a first step would be to collect all the relevant data you can find. While gathering statistics and figures from your own busines’s archives is a good way to start, there is much more to consider. Namely, one of the most important aspects of your business is how it fares on the market, which is exactly what the buyers are looking for. So market research helps you paint the whole picture of your business in a few ways:

• It helps you estimate your potential sales volume

Understanding the market and it’s needs is key for running a successful business. Market Research can show you if there is a need for your products in the market, and how much do the customers value them. The math is simple, if there is a demand for your products or services and room for you in the market, your business is more likely to have higher sales. Knowing this in advance is of great benefit.

The merger and acquisition process will go smoothly if the buyers know that your business will be able to make a considerable profit. If the research is in your favour, it will be easy to convince potential buyers your business is a good investment. If not, well, at the very least you’ll know exactly which areas of your business need improving. Therefore, you’ll have a chance to work on them before you put everything in your information memorandum.

Additionally, data collected through market research is crucial for writing other documents included in an Information Memorandum like financial projections. They are of great interest to any potential buyer in mergers and acquisitions, since they predict your business future financial state.

• It helps you find your place in the industry

Another benefit of market research is getting to know your competition. It is not enough to just offer products that are desired in the market, because they will not fare well if you are outperformed by your competition. If your competitors cast a shadow on your business, you will not be able to stay afloat. Therefore, including in your information memorandum how your business compares to others in the industry is important. Potential buyers will want to know if your business will be able to outrank the competition. Moreover, having a watchful eye on your competitors will help you make business decisions that will keep you in the race.

• It helps you stay on top of the market trends

In the ever-changing market it is important to do regular market research. This way nothing will pass you by unnoticed. Regularly tracking market trends is crucial for running your business. This way you are making sure there are no surprises. Being prepared for any curve ball thrown your way is important for maintaining a successful business. By doing research repeatedly you are keeping a close eye on any new laws and regulation or changes in customer preferences that can affect your business. This way you are making sure you are not including outdated data in your information memorandum. Moreover, it reassures your buyers that you have done your homework, and are prepared for anything.

All in all, Market Research is a great asset to any information memorandum. It provides crucial and complete information to potential buyers. They will know just what is the value of your business in the market and how it is able to compete in it.

How to do Financial Modeling for an Information Memorandum: 5 Simple Steps

An information memorandum is necessary to prepare for mergers and acquisitions. It provides a summary of your business to potential buyers, so naturally it is important to write it properly. Keep in mind that your business’s biggest selling point will be it’s past financial performance, but the buyers will want to know about the potential for future success as well. And here is where Financial Modeling comes into play.

What are financial models?

Financial modeling is a process of making an overview of a company's finances in the form of a spreadsheet. Using a mathematical equation a financial model is made in which any variable can be changed to create different scenarios and outcomes. They are usually used for making business decisions, managing a company, setting budgets and organising projects. But they are also a necessary component in mergers and acquisitions, which is why they are included in Information Memorandums.

Financial modeling process can be lengthy, but it can be broken down into a few steps.

• Collect your financial information

Financial modeling starts by collecting all of your financial history, your sales records, costs and expenses. The further back you go the better. But for the most optimal results, collecting at least 3 years of your financial history will be enough for making the most accurate financial models.

• Study your numbers

After gathering every financial piece of information you have, it is time to analyze it. Try spotting common trends and reocccurancess. Study growth rates and turnovers. Learn everything you can form your financial ratios. This will later be useful when trying to make financial projections for your business.

• Make assumptions

Making assumptions about your business’s future performance is done through drawing conclusions from what you previously learned from your analysis, or by doing market research. Understanding market trends can greatly help with determining the future performance of your business. Since you will make assumptions based upon what you already know, it is beneficial to collect as much information as possible, and Market Research can be of great help.

• Make financial projections

After making your assumptions, proceed to build upon them by creating financial projections based on a three statement model (income statement, balance sheet and cash flow). This may be the most important part of your information memorandum since it will show the buyers your business may have a promising financial future.

• Run assessments and analyses

The next step is to conduct additional tests and analysis, because Financial Modeling can not be complete without them:

• Discounted cash flow analysis (DCF model) - calculate the value of your company

• Sensitivity analysis - make different scenarios by changing the variables in the model to test different outcomes. This means adjusting the assumptions you made and seeing how the changes to the assumptions will impact the final result.

• Stress testing - test the model by assuming the worst case scenario. This way you will be able to see if your business will be able to withstand extreme circumstances.

Since financial modeling is such an integral part of an Information Memorandum it is important to do it right. Going carefully through each step will assure your model will be convincing and accurate.

How to create a Winning Pitch Deck - Professional Business Plan Writer's Advice

Chances are you are not the only one needing investments for your business. There are many other businesses looking for fundings and pitching their business plans to investors, in hopes of impressing them. So, the question is, how do you make your business stand out in a sea of others? Well, a winning Pitch Deck is the one that grabs the investors attention. This might seem like a lot of pressure, but here are some tips from Professional Business Plan Writers to ease you through it.

Know your audience

Most professional business plan writers know that the most memorable pitch decks provide the audience with what they are looking for, or to be more precise, what the investors are looking for in a business. Therefore, the focal point of your presentation should be the investor's ROI. And don’t forget to support your claims with numbers, otherwise they’ll lose interest if you do not have anything to show for your bold statements.

Keep it short

Do not make too many slides! It is not necessary to include every single detail in your presentation. Investors are on a tight schedule, they do not have the time to sit and listen to you drag on about your business, nor do they really wish to. There is an unwritten rule that your presentation should not be longer than 10 slides (give or take). Listen to professional Business Plan Writers when they say: “the fewer slides the better”.

So, anything you wish to include in your pitch deck should fit on those 10 slides. That means curating the information you would like to include in your presentation. Having a limited number of slides will force you to provide only the most important facts about your business, in other words, it’s heart and soul. This way you are more likely to spark investors' interest in your business.

Less is more

Making slides should be easy enough, but do not just put your numbers and spreadsheets in them and call it a day. Your presentation should be pretty to look at and easy to read. Professional Business Plan Writers know not to oversaturate pitch decks with text and long lists. Sure, you need to provide numbers to support your claims, but keep in mind that too much information at once can be extremely overwhelming for your audience.

Studies have shown that human memory capacity is limited. People's short term memory can only obtain about 7 pieces of information at a time. Any more than that increases people's contemplation time, which hinders their decision making, something you definitely do not want to happen with your audience.

Tell a story

Another tip from professional business plan writers is not to underestimate the power of storytelling. Any good story has a conflict and resolution, an issue that only the main character can resolve. So use these storytelling elements in your presentation to your benefit. Present a problem, or a need in the market that your business can solve. Here is where your products or services save the day by addressing the market demand. Presenting your business like a story narrative is a way to keep your audience engaged throughout your presentation, because everyone likes a good story, don’t they?

Look at pitch decks as an opening act to your business plan. They prepare the audience for what is to come, “the headliner”. They need to get them interested and curious about your business. So, using tactics from professional business plan writers for your Pitch Deck will surely score you a second meeting with the investors.

How to Create a List of Assumptions for a Financial Projections in a Business Plan

If we had a crystal ball to see the future, writing Financial Projections would be so much easier. But, unfortunately we don’t. So, the next best thing is to make educated guesses. Financial forecasts require making a long list of assumptions about the future financial state of your business and all of the conditions and circumstances you may encounter along the way. These can be very difficult to predict, but here is how you can make your list of assumptions for the most accurate forecasts in your Business Plan.

Start by collecting (your) data

First thing’s first, gather your numbers. All of them. Look at your business records, it’s sales history, all of the bills and receipts, cost, expenses and losses you had in the past. But know that, searching through your own company archive is not the only way to collect data. You can either conduct market research, or you can get information from public records. Libraries, government records, and industry associations have plenty of free information available to the public. So, do not overlook these treasure troves of data, because the more information you manage to get your hands on the better. It will guarantee more accurate assumptions.

Asume your expenses and production costs

After getting all the information you need (or can get), the best way to start making assumptions for your financial projection is to predict your costs. Most of them will be recurring. But be aware that these expenses can change in the future. For example, the price of materials can go up, causing your production cost to rise. So be sure to make multiple assumptions, including the worst case scenario. This way you will not be blindsided by an unexpected event, which is excely what makes a good financial projection and business plan.

Assume your sales

For an accurate Financial Projection Business Plan, you will also need to predict sales, or how many units you will be able to sell for a given period of time. This will later be necessary for projecting your income statement and cash flow. Use market research to determine what the demand for your product is, or will be, and just how fierce your competition is.

Price your product

While making assumptions you will need to know the value of your product, the exact need of your product on the market and how much your customers are willing to pay for it. To set the price right you need to take into account not only production cost, but your competition and customer’s needs as well. That is why Market Research will be necessary in determining your products market value. So don't be hasty by setting your product price only according to its production cost, it will be detrimental to your bottom line.

Cash flow planning

Cash flow planning is about predicting how much money you will have at hand for a certain time period. It compares cash inflow and outflow, and helps you make sure you do not run out of money in the future. If you plan well, and have a good cash flow, you will not run out of money to pay your expenses. Predicting cash flow is important for making reliable business plans.

Making assumptions for Financial Projections can be tricky, but it helps if you are well prepared and have all the information you need to make the most accurate assumptions. A business plan cannot be completed if you cannot predict your business’s financial future.

Tips from Professional Business Plan Writers on How to Present a Pitch Deck

 

So, you would like to present your business to an investor. You will likely contact a Professional Business Plan Writer to compose a business plan for you. But what if a business plan is not your first choice? There is a document that is made just for presenting - a pitch deck.

A pitch deck is a visually oriented brief presentation, that overviews your business plan. The most common way of using a pitch deck is in a face – to face meetings with potential investors.

But, having an adequate document does not mean your business journey is over. There is one crucial thing when you are presenting a Pitch Deck – the way you present it.

Here are professional business plan writers’ tips on how to present a pitch deck.

Have a Strong Beginning

Potential investors are busy people who have seen hundreds or thousands of presentations. Likely, the investors will not even pay attention to your presentation if you do not captivate their attention right from the start. There are many ways on how you can grab their attention:

- Personal story

Everyone loves to hear a good business story, and that definitely includes potential investors. Talk about your business journey, how it all started and your ideas in order to form that emotional connection with the audience, in this case, investors

- Imagination

Ask them to imagine a what-if situation, or to think of something that relates to their personal lives, etc.

- Tell a joke

You do not need to be a professional stand-up comedian to crack the investors up and use a joke as your ice breaker. However, if you go this route, make sure to test this out on a few different types of audiences first to make sure it will land.

Maintain Eye Contact

Not only professional business writers but everyone who communicates and has a conversation with someone should pay attention to eye contact. Maintaining eye contact makes you seem confident, and respectful towards your audience.

Professional Business Plan Writers suggest that the easiest way to maintain eye contact during your pitch deck presentation is to find a fixed point in the room. In this case, you should choose a wall behind your audience, so that it may seem that you are looking directly towards them.

Do your Homework

Come prepared. Know your numbers and metrics. It can speak louder than words. To make your pitch deck presentation successful, it is crucial to know your numbers by heart and be prepared to answer any questions that may come up.

Speak freely, but clearly

Avoid reading your presentation from your slides or a piece of paper. Know your text. If you are not that confident about how you will present your pitch deck, have a few note cards but try not to read directly from them so your presentation still feels fluid.

Look out for filler words

We all have used – “um”, “uh”, “er”, “like”, “ah”, when talking, without even realizing that we do it. Try not to use them at all while presenting your pitch deck.

You will sound more professional, trust us. Our professional business plan writers advise you to slow down and make shorter sentences when talking. It will reduce the usage of filler words.

How you present your pitch deck is equally important as the document alone. Implement these tips from professional business plan writers, and you will present your pitch deck successfully.

To present a Pitch Deck, you need to have one. Find experts, like those in the Advisory division at Joorney Business Plans, who will not only write and design your deck but are also willing to give you tips for an effective presentation!

4 Key Customer Data Market Research Methods for an Information Memorandum

 

Market Research is beneficial for your information memorandum in many ways. You can gather data and learn more about your target audience, and if done effectively, you can bring home the victory of succeeding in your market industry.

Whether you have a B2C or B2B company, market research is a crucial part of your business journey. The goal of every business is to focus on the customer and to understand their needs. A common approach is to do customer data.

There are several methods of customer data market research you can do for your Information Memorandum.

Here are 4 crucial customer data methods that everyone should know.

Surveys

This is the most common method for doing customer data research. A survey is a list of versatile questions where you can collect specific data from a particular group of people. You can conduct this method either in person or online. These questions can be open or close-ended. Some of the close-ended surveys can be in a form of:

- Multiple-choice questions

- Demographic questions (besides the provided information, asking about gender, age, education, etc.)

- Ranking questions

- Checkbox

An important part of this method is knowing what questions to ask, but what is also important is how you ask them. Good questions with a good approach to the person you are questioning will lead to a good analysis.

Focus Groups

This is a simple yet often tricky method to put into practice. You carefully select a specific group of people, ask them questions about your product, services, their user experience, etc. By doing this, you will gain deeper insights. This is an open-end questionnaire, like a conversation, where the person can spontaneously talk and share their thoughts about the topic.

Business plan experts recommend using this method if you have a well-established business model and experience in the market.

Interviews

This is one of the most insightful customer data market research method. It is a face–to–face (in person or virtual), and one–on–one conversation with a selected target audience member. This method is insightful because it is personal and in-depth, with open-end questions. It also helpful because it allows you to ask follow-up and deeper question on the spot.

The only downside of doing interviews for an Information Memorandum is that it is time-consuming and it can get expensive. Be smart when with your resources and do whatever is most beneficial for your company.

Observation

This is the most powerful market research method where you monitor and observe your target audience. The key is that the audience behaves naturally with no pressure. This way, you will get real insights and get the most out of your results.

This method is often suggested for use in retail. Observing shoppers on special occasions or seasons is the most common way to get that insight.

As you can see, there are many customer data market research methods for an information memorandum or any other document. Understand your needs, and ways to achieve them, and you can easily choose the perfect Market Research for your business.

If you have doubts about choosing a customer data Market Research method, considering contacting professionals who can help you develop your methods and even be the ones to conduct the research for you!

The Difference Between an Information Memorandum and a Pitch Deck

 

Have you ever been to a situation where you are not certain if you need an information memorandum or a pitch deck for your business?

Information Memorandum and a Pitch Deck can be valuable when presenting your business if you know when to use what type of document.

Professional business plan writers and other experts know how busy and engaged you are with growing and establishing your company. If you’re not sure which document you need, this will help you determine that quickly!

Here is the difference between an information memorandum and a Pitch Deck.

Information Memorandum

When you provide a comprehensive overview of your business to potential investors or buyers, you will use a confidential information memorandum, also known as an offering memorandum. It overlooks the past, current, and expected future performance of your company.

You may use this document to:

- raise funds

- remove assets

- sell the entire business

Like you, investors and potential acquirers are busy people. These documents will make their decision-making easier and quicker.

An information memorandum is important because you can completely provide the summary and most important details of the main aspects of your business and future transactions.

Information Memorandum includes the following sections:

Overview and Key Investment Highlights – the information of your company’s major milestones

Company Information – description of the major milestones, management team, ownership, organizational structure, and the expertise of employees

Products and Services – describes what products or/and services your company offers

Market and Competition – the industry and market overview, current and expected sales, and target audience

Proposed transaction – A summary of the transactions you propose from potential investors.

Pitch Deck

A pitch deck, also known as a startup pitch deck or slide deck, is a visually based brief slide presentation of your business plan. Having a Pitch Deck can be a vital tool when raising funds for your business. These documents can open a door and secure you the next meeting with an investor. The optimal number of slides of a pitch deck is between 10 and 20.

A pitch deck is often presented face to face to potential investors but can also be sent as a way to get a foot in the door.

Here are a few tips on how to present your pitch deck.

Tell a story

Even busy people like investors like to hear an engaging short story about your business.

Be concise

Today, we are overwhelmed with information, and people lose interest. Stay on the same page with your audience (in this case investors).

One slide = one idea

Sometimes, less is more.

Good First Impression

The first two minutes or first few slides are the most important. A good first impression sets the tone of the whole presentation.

Show Your Team

Present the people that are working with you and their value to the company.

Do your Homework

Know your numbers by heart. Financials are the section that interests the investors the most. Defend your numbers, and you will increase your chance of approving the proposed fund.

While the Information Memorandum has a more detailed approach to presenting a business, the pitch deck is all about the visual effect. Both documents represent the same information, the difference is the depth of that information.

If you have trouble composing any of these documents, seek out Professional Business Plan Writers that can assist you.

6 Types of Financial Modeling in a Bank Loan Business Plan

 

Financial modeling to a bank loan business plan is like milk to cookies. When applying for a bank loan you need a bank loan business plan, and your document needs to contain financial projections which can only be created through Financial Modeling. It is a crucial section of any business plan.

Financial modeling is like a built-in spreadsheet tool created in MS Excel, that forecasts a future financial performance of a business.

There are more than a few types of financial modeling.

Here are 6 types of financial modeling for a Bank Business Plan or other business plans and documents you may need.

Three – Statement Model

This is the fundamental financial model. As the name says for itself, there are 3 linked statements with formulas in MS Excel. These three statements are:

- Income statement

- Balance sheet

- Cash flow

To link these three statements, you need to have strong accounting, finance, and Excel expertise.

Discounted Cash Flow (DCF) Model

This model builds on the previous three statements (income statement, balance sheet, and cash flow). Discounted cash flow model estimates the value of your business. DCF model takes cash flows from these three statements, and with the XNPV function in MS Excel, discounts them back to today at the company’s Weighted Average Cost of Capital.

Merger Model (M&A)

M&A is a more advanced financial model. This model represents the final result of combining two companies into one through an M&A process. A new consolidated entity forms under a mutual agreement between these two companies.

The merger model occurs when one side proposes to offer cash or shares to merge with the other company.

We often use this model in investment banking and corporate development.

Initial Public (IPO) Model

We use this model in investment banking and corporate development to value a private business before going public. The initial public model compares equivalent company analysis and assumpts how much investors will pay for a specific company.

Leveraged Buyout (LBO) Model

This model evaluates a leveraged buyout transaction. LBO is the purchase of a company that is funded by using a great amount of debt. With the cash flow of the company, the company can pay down that debt. The exit cash flow of the company, exit multiple, and the paid-off amount determines the total return achieved by the investors in an LBO. This is an advanced form of financial modeling that requires strong financial skills.

Sum of the Parts Model

You build this type of model by taking different DCF models and linking them together. Any further components of the business that are not complementary for a DCF analysis will be added to that value of the business. For example, if you add segment A, segment B, and segment C of the business, you will get the total company value. Before the modeling, you need to determine the business segment and the valuation for each segment.

We still can not predict the future, but financial modeling can help predict the future of your business. These 6 types of financial modeling can help you compose a successful Bank Business Plan for your needs. If done well, your chance of bank loan approval will increase.

Not all of these models may be needed specifically for your bank loan business plan but, understanding them and being able to include them when appropriate will enhance any document.

But, if you are not familiar with accounting, finance, and Excel, business experts at companies like Joorney can help create perfect Financial Modeling for your company’s needs.

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.

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.