Business Plan: How Do You Make Sure Your Banker Likes It? – Regulations

How to prepare a business plan to obtain bank financing? Here are some tips to help you convince your banker.

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How to make an effective business plan?

A business plan is an essential tool for successful fundraising campaigns for businesses. It is a document in which the focal points of an entrepreneurial project are described.

In order to convince donors, it is necessary to take special care in the preparation and presentation of this text. But how do you succeed in this exercise, which seems far from obvious?

Discover in the rest of this article the essential points that you must rely on to convince your banker with a business plan.

What is a business plan used for?

Whether starting a business or driving an entrepreneurial project into an acceleration phase, a business plan is an essential element for the success of business goals.

What is a business plan?

A business plan or business plan is an official text that describes a company’s roadmap for achieving its goals.

This written document, 20 to 50 pages long, contains essential information about development forecasts, strategic and operational choices, and the resources available to the company.

In general, the business plan is written within the framework of:

· Creation of a business;

· Sale or transfer of a business;

· An addition of activity.

As for the content of the business plan, it varies according to the companies and the stakeholders it is intended for.

However, it is common knowledge that a business plan must necessarily contain two parts:

· The editorial part;

· The financial part also called financial forecast.

The editorial part presents the entrepreneurial project and its goals as a whole, while the financial part contains a set of tables showing how the company ensures its sustainability.

Click here to learn more about the business plan.

What is a business plan used for?

A business plan is a document that serves to clarify an entrepreneurial project with potential partners, investors or buyers. The idea is to show that the company is viable to ensure stakeholder engagement.

To achieve this, it is necessary to set out the company’s goals, the resources it has available to achieve them, as well as the strategic and operational plan it implements.

The document can be used for different purposes, depending on the stakeholders it is intended for.

For project managers and business leaders, it is used to make appropriate decisions to achieve business goals.

Based on a comparison of the forecasts with the reality on the ground, the project managers can adjust their strategic and operational choices and at the same time ensure that they do not deviate from the basic objectives.

Furthermore, a business plan is useful for convincing technical and financial partners to cooperate via investment, logistics or other forms of cooperation.

The business plan is then used to highlight the sustainability of the business, its financial potential and the benefits that the partners can have from working with it.

What are the banker’s expectations of the business plan?

The funder generally focuses on two aspects of the project.

The first is the one that concerns the human-project-market context. It is important for him to convince himself that the initiators have taken into account the contours of the project.

It also ensures that the promoters have the skills, human resources and experience necessary to complete the project.

The marketing strategy is also an aspect that arouses the banker’s interest. The latter must ensure that it adapts well to the market, taking into account competition and innovations.

Finally, providers of funds want to be reassured by the coherence of the financial presentation. Offering solid guarantees is generally not enough for a banker. It is very important to him that the financial plan as a whole holds water.

Writing the business plan

Based on the bank’s expectations, you can identify the main points you can rely on to increase your chances of obtaining bank financing. Click here to learn more about the structure of a business plan.

Presentation of company managers

For many investors, this is the most interesting part of the business plan. The project manager must, on no more than 3 pages, present the managers, business partners and business partners who are involved in the entrepreneurial project.

At this level, the banker will especially make sure that you have broad enough shoulders to carry the project. Don’t hesitate to highlight your experience in the project sector and show your skills.

The presentation should emphasize your mastery of the field and the market. If you’re really passionate, it can be helpful to hint at it.

Understanding the investment market

The purpose of this part is to show that there is a product-market fit and to demonstrate the deep understanding and mastery of the market that the project managers have.

The market analysis must cover different aspects to highlight its general characteristics, the opportunities it provides, as well as the limitations and potential threats to the success of the entrepreneurial project.

Although there is very little chance that your business plan will teach your banker anything new about your industry, you should still always talk about it to show him that you are mastering your trade correctly.

The commercial strategy that needs to be put in place

The business strategy is defined based on the results of the market analysis. The purpose of this part is therefore to show how the company intends to get the most out of the market based on its value proposition.

It is therefore essentially a matter of presenting the strategic decisions that have been made to achieve the commercial objectives.

To win the trust of fund providers, you need to think of a product sales strategy that best suits the market. Then it is necessary to identify the strengths of the chosen strategy and integrate them into the business plan.

It is recommended to make a summary of the strategy in schematic form before adding a complete text.

The preliminary financing budget

This is where you have to talk about money to the banker. If the previous points are important, this one is decisive. It simply has to be perfect to convince the banker.

In addition, the project manager must provide financial guarantees regarding the company’s ability to recover in the event of bankruptcy.

He must also show that he is able to raise part of the necessary funds to run the business, as the bank will only finance part of the planned budget.

Also, keep in mind that banks are reluctant to finance working capital needs. Bank financing should not be used to manage initial inventory purchases, communication costs, or initial cash.

It is therefore advisable to clearly show that the funds obtained from the bank are not intended for these purposes.

The legal aspect

The legal aspect is the last essential point that a business plan must contain. This essentially includes the articles of association that have been laid down for future members of the company.

This part also defines the social regime of future rulers as well as the shares to which they will be entitled.

It is strongly recommended to indicate in the business plan the various experts with whom the company will cooperate, whether it is the state authorized accountant and/or the lawyer. In doing so, the project manager shows the bank in his business plan that he is well supported and advised in relation to tax and law.

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