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!

5 Common Market Research Mistakes when Writing a Bank Loan Business Plan

 

Market research is an important component for any business plan, but that can especially be said for a Bank Business Plan. Getting a bank loan is not easy, there are many requirements for getting a loan approved, one of them being a well composed business plan based on solid research. With such a huge emphasis on the research, it is important to do it right, so here are some common mistakes to avoid.

Not using all available information sources

The first step of any research is to gather all of the available and relevant information. In case of Market Research, this is done through surveys, questionnaires, test groups and interviews; in other words, data is collected directly from the customers themselves. This type of information would be considered primary data, and many make the mistake of using it as their only resource.

However, there is another way of collecting information, which is through secondary research. This includes all of the data and research collected and done prior to your own, such as news articles, government census, industry reports, studies, etc.

Overlooking the competition

Focusing on your brand is great, but you are not operating in a vacuum. There are other companies climbing the ladder of success, and you do not want to be at the bottom of it. Therefore, gather as much information as you can on your competition, so you can see how you are positioned on the market and how you can improve.

How you compare to your competition is an indicator of your business’s potential success. This is crucial information for loan officers, since it will give them an idea of your business’s value in the marketer and ability to repay your debt.

Thinking the market does not change

If you need market research for a bank business plan, don’t dust off your old research and use it again for a new document. The market is constantly changing and your Bank Business Plan will not benefit from outdated research. Doing regular research and keeping an eye on the market will show loan officers you are aware of any new market trends and are able to overcome or create opportunities from changes. This is valuable information for getting a loan approved since it shows you will be able to adjust to the market and keep producing a steady revenue.

Cherry picking information

The reason you are conducting market research may be for your bank business plan, with an overall goal to get a loan approved, but that should not be your research objective. The desire to make an impeccable business plan, can make people cherry pick information for their research, sometimes without even realizing it. The result of this may be a seemingly bulletproof business plan, but in reality it is flawed.

Therefore, you need to have a scientific approach to your research, which means that it needs to be:

systematic - following a clear plan and path; using good methods and research techniques

and objective - not being biased in your research is crucial. If you only make it your goal to get approved for a loan, you might lose your perspective. Your objective with market research is to present reality as it is.

Presenting an unreadable paper

Do not oversaturate your findings with charts and graphs. By all means, use them, you need to after all, but know that you should tell a story. Your research should be easy to follow, read and understand. Knowing how to present your findings is crucial. And keep in mind that your readers may not be as knowledgeable of your industry as you may think, so avoid using industry jargon as well.

The scope of market research can be intense, which leaves a lot of room for mistakes. So, avoid the mistakes others make and base your bank business plan on the most accurate research you can do. If you find the Market Research portion of business planning difficult, consult experts that can do it for you. This will mitigate the chance of being biased in your findings as well.

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.

7 Things to Know When Writing a Business Plan – Professional Business Plan Writer’s Tips

 

When starting your business, you will most definitely need to write a business plan. This document will help you organise your business, help you make good decisions and even help you get fundings. Because of their importance, having a well written plan is a must, so here are some tips from a Professional Business Plan Writer.

1. Write with a purpose and know your audience

There are many reasons you will need a Business Plan and know that in order to achieve your goal, you will have to adjust your plan depending on its intended purpose. Knowing your audience helps as well, if you are for example looking to get investments, you will make investors ROI the main focus of your plan.

2. Consider what to include

While business plans are a detailed description of your business, know that they do not necessarily need to be too long. You should of course cover all of the main and most important aspects of your business, but you should not oversaturate your plan with unnecessary text. Professional Business Plan Writers know that while painting a full picture of your business is important, omitting some of the minor details is fine, as long as the integrity of the plan is intact.

3. Be honest

It is logical to want to present your business in the best light possible but do not fall into the trap of using your business plan as an advertising tool, especially if you are pitching it to investors. They will want to know everything about your business before they make a decision, the good and the bad. So do not fret about including your business’s weakness in it as well. It may seem counter intuitive, but professional business plan writers say it is necessary. Just be sure to provide ways to overcome your business’s shortcomings too.

4. Market research is a helpful tool

Your Business Plan greatly depends on the information you manage to gather. So, the more, the most accurate and up to date information you can find, the better your plan will be. Market research can be of great help in making your plan failure proof.

5. Think about the language and structure

Since you are writing a formal document, formal language should be used, your document should be professional. However, this rule can be seen more as a suggestion, if you consider who your audience is. Your writing style should be adjusted to your reader’s style and preferences, so your plan is easy to read and understand.

6. Do not forget to use references and support assumptions

Investors will not take you seriously if you do not have anything to support your claims. Sure, you say your product will sell well, but based on what? Have you done your market research? Have you made your financial projections? Always show where your numbers are coming from and where you are drawing your conclusions from.

7. Double check

Professional business plan writers know that the job is not done until everything is proofread (multiple times even). Always make sure everything checks out and is in order. Edit and make changes where necessary. And then check again, because it is better to be safe than sorry.

Having a well formulated business plan is essential for operating a business and for gaining funding, but it can be quite a challenge to write it. Asking Professional Business Plan Writers for help can certainly put some pressure off. Their tips can help you write the best possible plan to reach your goals and achieve success.

2 Key Elements of Financial Modeling for a Bank Loan Business Plan

 

Just like for financial projections, you need to base your financial model for a bank loan business plan on the three statement model, which consists of the income statement, balance sheet and cash flow. Alongside with the three statement model, making assumptions is the key for Financial Modeling . While there are many other elements of financial modeling, maybe none are more important than these two.

• Making assumptions

Assumptions are the foundation of financial modeling. So dedicate some time to considering them and committing them to paper. You will need to have a wide scope of assumptions from best to worst case scenarios in order to make a proper financial model for your Bank Business Plan . Brainstorm all of the possible outcomes you can imagine.

Making correct assumptions about the future financial state of your business is important for constructing the most optimal financial model. Therefore, before you start making your assumptions, collect all of the information you can find. Go through your own company records, conduct market research, search through public archives. The more information you can find the more accurate your assumptions will be.

While the future is hard to guess, preparing for a multitude of different outcomes based on facts will benefit you in making the best bank loan business plan.

• The three statement model

After making a list of assumptions, continue your financial modeling by forecasting your three statement model.

• Income statement

A forecasted income statement will predict your business future revenue. By comparing all of your revenue and gains to the total of your expenses, they show if your business will be able to make a profit or will be at a loss. This will be one of the most important things to present in your bank loan Business Plan . You will need to provide loan officers with proof that you'll be able to repay your debt, and an income statement is the way to do it. Managing a steady income is one of the things loan officers are expecting from your business.

• Balance sheet

Loan officers take careful consideration when choosing the right candidate for a loan. Banks do not take risks, and always do risk assessments. But even if candidates have good credit scores they still need to show what they have to offer as collateral. Collateral is usually in the form of assets that can be seized in event your business fails and you are not able to repay your loan.

This is why balance sheets are useful when doing your Financial Modeling. They show your business’s assets, shareholder equity and liability. For this reason, a balance sheet shows loan officers proof your business is financially stable and reliable, as well as

what you have to offer as collateral.

• Cash flow

Cash flow calculates the difference between inflow and outflow of money. This will show you how much money you will have on hand at any given moment. It compares all of the revenue you make from sales and all possible expenses you will have. Making sure you do not run out of money before you pay your loan fees is not only the key to running a stable business but also a requirement for getting a bank loan.

Financial modeling is a long number crunching process that has many elements and steps to it. But if you are making a financial model for a Bank Business Plan, pay extra attention to the assumptions you make and the three statement model, which are the key elements to getting a loan for your business.

How to Start Market Research for a Business Plan

You are already busy with writing your business plan, you got the executive summary done, you have written your business description, and now you have to do Market Research, except you do not know where to begin. Do not worry, the key is to make a good plan, and you’ll be all set to go. You will see that with good preparation and a well formulated execution plan, your research will be done with ease. So here are a few things to help get you started.

Determine the purpose of your research

To start your market research, the very first thing you need to do is determine its purpose. Why exactly do you need it for? Well, since you need it for your business plan, the bigger question is what do you need your Business Plan for? Is it for managing your internal or external business operations?

The purpose of your research will determine its scope, whether it be for managing your business or gaining investments. If you are looking to gain investments you will need to do as detailed research as possible to convince investors you are familiar with the market. You are more likely to get investments if you show that you are making well informed decisions that will result in a successful business.

Make a strategy

After deciding the purpose of your research, it is time to make a plan. Having a well formulated strategy is winning half the battle. You simply cannot proceed with your market research without having set up a straightforward and clear path to follow. This means knowing exactly what questions you need answering, what type of research to conduct, who is your target demographic and where to get your information from.

• Choose the type of research

There are many types of Market Research for you to choose from, the most common ones being surveys, interviews, focus groups and observation. Consider your budget when making your decision, as some of these can be costly and time consuming. And of course, no matter the type of research you chose, prepare well for it. For example, think long and hard what questions you will be asking your customers in the interviews or surveys.

• Create your customer personas

Find out who your customers are. For the benefit of your business plan you will need to know your target customers. Who is buying your products/services and why? What is driving their spending? What is their age group, gender, income, education level ect. Knowing all of this will help you make adjustments and set the right price for your products and services, or even help you predict future sales.

• Choose your source of information

Collecting information directly from your customers is not the only way to learn about the market. Conducting interviews and getting first hand information from your customers would be considered primary information. On the other hand, secondary information is all of the data from public resources like libraries, government agencies, industry associations ets. The plus side of secondary information is that it is readily available and free, and very detailed specific information can be purchased from other sources as well.

Market research is definitely no walk in the park, there is a lot of work involved in gathering information and analysing it. You also have a lot to consider before you even begin your research. But if you have a good start the rest will fall into place. With a well conducted market research for your Business Plan, you will be one step closer to achieving your goals. 

3 Key Elements of Financial Projections for a Bank Loan Business Plan

 

Bank loan business plans center around your business’s finances. They are all about proving to lenders that you have been running a successful business in the past, but more importantly, they will want to know if you can keep it up. Enter Financial Projections, a window into the future of your business’s finances. They can predict success or failure, therefore it is important to try and make the most accurate forecasts, especially if you are trying to get a loan. To break them down, there are three key components of financial projections.

• Pro forma income statement

Pro forma income statements predict your future revenue, and they are the biggest portion of your financial projection. They include all of your operating expenses, taxes and show your earnings for a specific time period. So in order to project income statements you will need to make assumptions about potential sales. For that, you will need to look back into your history in sales and/or conduct market research. This part of the financial forecast is extremely important in your Bank Business Plan, because it shows your business will be able to generate enough income to repay your debt.

• Cash flow

Cash flows represent money movement, more precisely the amount of money going in and out of your business for a certain period of time. They consist of two parts:

• Cash inflow (revenue) - all the money accumulated through sales
• Cash outflow (cash disbursements) - all of the expenses your business has

Cash inflow and outflow are later compared to calculate money surplus or deficit. Cash flows are necessary for financial forecasting and bank loan business plans because they can predict future money movement in your company and can be used to calculate your credit risk. They show the lenders just how responsible you will be with your business’s finances and if you will have enough money on hand to repay your loan.

• Pro forma balance sheet

Pro forma balance sheets present a total estimate of your business’s net worth including assets, liability and equity. In order to make a good balance sheet you will need to gather data, the further back the better. It is generally recommended to collect at least two years of your business’s financial history. A pro forma balance sheet predicts what business will own and owe, which determines if you are a suitable candidate for a loan. Because banks do not tend to take big risks, having something to offer as collateral helps minimize that risk and show that there is a safety net in case your business fails or you otherwise default on your loan. It is important to note that a pro forma balance sheet has to match your income statement and cash flow, any inconsistencies will deter loan officers from approving your loan.

In the end keep in mind...

Pro forma income statements, balance sheets and cash flow are all necessary parts of financial projections. But because they are all based on assumptions it would be beneficial to make several different projections. Collecting all of your business’s financial data helps, but a good financial forecast will take into account other factors as well, such as market trends and currents, or unexpected costs and losses. That is why usually more than one forecast is included in bank loan business plans, ranging from the most optimistic to the most pessimistic scenarios.

Bank Business Plans are written with a purpose of getting a loan approved. Therefore, they rely heavily on the most accurate and detailed financial projections. If made properly, they can show your business will produce a steady revenue, and you'll be able to repay your debt.

A Professional Business Plan Writers Tips on How to do Market Research

 

Conducting market research is a great idea that can benefit your business in many ways. It can be used to make various business decisions such as marketing strategies, product improvement, budgeting, as well as be used in documents to gain fundings and investments. But because of the scope and the complexity of the task, many companies hire specialized agencies and Professional Business Plan Writers to conduct market research for them.

However, if outsourcing your research to other agencies is not an option for you, here are a few useful tips from an expert himself to guide you through your research.

“A good beginning makes a good ending”

Collecting, going through and analyzing all the data you need for your research can seem like a tremendous task, but if you know where to start and how to proceed, it makes things a bit easier. Professional business plan writers know that a good start will determine the quality of your Market Research, and any good research starts with a good formulated question and an execution plan.

That is why setting the parameters and research scope early on is the best way to ensure you do not get lost along the way and waste your time and resources with bad quality research and inconclusive or inaccurate findings.

“There is a lot of (free) information available”

Market research is a way of gaining information about your customers and industry, and there are many ways you can do that. Telephone polling, mailed questionnaires, online surveys and personal interviews just to name a few. These would all be considered primary research, because all of the information comes from the customers directly.

On the other hand, secondary research is conducted by gathering information about the customers from other sources and public records like (public or university) libraries, government agencies, industry associations etc. A professional Business Plan Writers advice is not to overlook this kind of research since it can be a valuable source of information. Secondary research is a great way for finding information about your target demographic as well as your competitors in the industry.

“Dive deeper into your research”

There will come a point in your market research when you think you have everything you need and you found what you were looking for. But it actually might be a good idea to continue with your research. Professional Business Plan Writers always keep in mind that correlation doesn't imply causation and some things may not be what they seem.

There can be underlying factors that drive consumer behaviour that you just did not pick up from your initial research. So in order to derive the most accurate conclusions from your research it is best not to leave any stone unturned when gathering the information you need.

“Keep researching”

Market research is never ending, because the market is ever changing. Experienced business owners are aware that continuous and repeated research is necessary to be able to stay on top of the competition. If you are basing your business decisions on outdated models, statistics and data, your business will surely suffer. That is why professional business plan writers suggest to keep doing regular research to be able to keep track of market trends.

Market Research can be a strenuous task, especially if you’re doing it on your own. Luckily, we can always turn to the experts for help. Their advice can guide you through the whole process and show you how to conduct the most optimal research and get the best results for your business.

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 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 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.

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.

Shake Up Your Bank Business Plan with a Pitch Deck

 

Pitch decks are brief presentations of your business in the form of slides, usually made in PowerPoint. They are intended for meetings with investors where they show a brief overview of your business, and present its key features. However, they are not common in Bank Business Plan, which usually start off with just an executive summary to convey the most important components of a business. Because loan officers go through dozens of business plans on a regular basis, be sure to make yours stand out. Of course, there are many strategies for making your business plan unique, and one of them is to include a pitch deck.

Why bother with them?

A great way of grabbing an investor's attention at the get go is by presenting them a Pitch Deck, and the same can be said for loan officers. Not only do these slides provide essential information, but they include eye catching visuals and graphs as well. Slides are a creative and concise way of displaying facts about your business. Therefore, they can be a great asset in getting approval for a bank loan, and here are a couple of main reasons why:

They save time

While an executive summary has a similar purpose as a pitch deck, they can be lengthy and boring. Many make a mistake of going on about their business in executive summaries and making them just too long. It is a sure way to lose anyone’s attention.

People do not like to waste time, and busy loan officers most definitely don’t. Time is money, so be sure to get to the point. Your audience doesn't want to go through pages and pages of documetns just to find what they are looking for.

This is why adding these decks is ideal for bank business plans. They are only several slides long with just the right information about your business.

They grab attention

A big part of Pitch Deck is their overall design. Because they include important numbers and graphs, these should be presented in an aesthetically pleasing way. This is another guaranteed way of making your bank business plan stand out from all the rest, and more importantly linger in the minds of your audience.

A good design has multiple purposes, not just to look pretty, but to be functional too. Your decks should be well organised and easy to read. Having a cluster of numbers and graphs can be overwhelming which makes people lose interest and skip over your deck.

If only a few bank business plans include pitch decks, having one in your plan can surely make it stand out from the rest. It is a great way for it to be different in a sea of business plans, that loan officers read on a weekly basis. They are a way to breathe new life into an otherwise boring document, and most definitely a fun and exciting way to introduce your business. Having an attention grabbing Bank Business Plan is winning half the battle in getting a bank loan.