Securing funding for a small business or start up business can be tricky, requiring lots of details and pitching a solid case for how your business will generate revenue (and repay the loan). Writing a business plan for a bank loan is a crucial step; a well-prepared business plan not only helps you articulate your business idea but also demonstrates to the bank that you have a solid strategy for success.
With many years’ behind us at The Business Plan Company and thousands of plans under our belt, here are our top 10 tips for making an impact.
1. Know who you are writing for.
Each bank likes information presented in their own way, with some needing specific templates. Remember to tailor your business plan to the specific requirements of the bank or financial institution you are approaching.
2. Know what they want.
Talk to the bank or your broker to see what insights you can get on the current priorities for the particular bank you are applying to. Their priorities and risk appetites change from time to time and knowing this up front can help to include the information of highest relevance.
3. Keep it sharp.
Long-winded plans with irrelevant information doesn’t help your case. Keep it concise and easy to read.
4. Don’t just write what you know.
Spend time to research your market thoroughly, so you can impress the reader that you are a sharp operator, who is well prepared to grow the business.
5. Imagine who is reading the business plan.
The person in the bank that is assessing your application is likely to be sitting in an office somewhere that has no knowledge of who you are or what you want to achieve. Make it easy for them to understand with clear explanations, images, maps, menus, product details and real evidence. Don’t waffle and hope they get it – they won’t.
6. Remember yourself in the plan.
One of the biggest risks for the bank is you, so include a thorough profile of all the business owners, that clearly demonstrate your skills and experience as they relate to the business you are applying for.
7. It’s part pitch.
You are trying to convince the bank through your business plan to give you finance, so include any small details that will help. Think about awards, big clients you have won, future contracts and other achievements.
8. Keep it achievable.
At The Business Plan Company, we often see clients that are super ambitious, particularly with financial projections. If you go too high – beyond what is reasonably achievable - you can lose credibility with the bank.
9. Polish up your business plan.
The plan is a representation of your business and the 1%’s count. Include your logo, make sure the formatting is consistent, has no spelling errors, no grammar mistakes and the overall document looks sharp. During the assessment, all details will be scrutinised, and inconsistencies or a low level of detail picked up, raising red flags that work against the application.
10. Do a sanity check.
Thoroughly review your plan before you submit: get a mentor, business coach, experienced business person or similar to review the plan and check for readability and content, then make changes before you finalise.
Business plans for bank loans are all in a day’s work for us at The Business Plan Company, so if you have any doubts or challenges, we have a very experienced team that can make the process super easy. No need to leave it to chance.
