What Bankers Look for in a Business Plan

Starting a business can be one of the scariest things to do.  There are many things to consider before starting a business.  One of the main things that you will need is a business plan.  The business plan is the road map for your business.  It is the document that outlines your business, your services or product and what you expect your business to do financially.  If done properly, your business plan is the lifeline of your business and the start of your road to success. 

 

It is easy to go online and get a business plan template, but it is better to hire a professional to write your business plan.  They know exactly what investors and financial institutions look for in a business plan.  No one is going to give you money because they believe in you or your great idea.  They give money based on if your business will be viable and profitable.

 

After years of writing plans for businesses seeking bank and investor funding, here is a list of what I have found that the banks actually look for in your business plan.

 

1.  Show them a complete plan.  There is nothing worse than wasting an investor or bankers time with an incomplete plan.  It shows poor planning and lack of commitment on your part so why would they lend you any money?  Make sure that your business plan has all the sections of at least a basic business plan.  This is one of the reasons that it may be better to have a professional do the writing for you as they will make sure that everything that needs to be covered is present in your business plan.

 

2.   Show them a realistic plan.  You can't teach a CPA how to count.  Meaning the people who are reviewing your business plan and/or loan application are very familiar with financials.  They have experience in knowing what numbers are inflated or deflated.  Make sure that when you do your financials, you are using realistic numbers and asking only for what you need.  Don't try to get rich off of your business loan.  Also make sure that the numbers in your financials are indicative of industry standards.  Don't pad numbers or profit margins to unrealistic numbers that far exceed existing businesses in your same industry.

 

3.  Show them your business background.  Make sure to include information about your experience and business background in your business plan.  Investors want to know that they are potentially lending money to someone who has business knowledge and experience in the industry for which they are starting a business.  For example, no one is going to give a hairstylist money to start a daycare, but that stylist could get money to start a beauty school because of her experience in the related field. If you have business partners or a management team, make sure that they have experience in the business that you are starting and make sure to include their background information in the business plan.

 

4.  Show them the money.  When reviewing your business plans, investors want to see your financial statements.  They want to see your income statement, balance sheet and cash flow.  They want to see this financial information projected for at least three years but five is suggested.  The reason that five years is suggested is because most successful businesses don't start to see significant profit until after the first five years.

 

If you need help with your business plan, don't hesitate to contact Kimestry Koaching! We offer a free initial strategy session to help you get started in getting your business organized and more profitable.

 

As always, if you have a specific question or topic that you would like addressed, please email kimestrykoaching@yahoo.com. 

 

 

 

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Power and success in 2014 and beyond!

Saving Time IS Saving Money!

 

 

As business owners, we often have a lot on our plates.  Some of us are not only business owners, but we are parents and spouses among other things.  We have many roles that we take on and each of these roles has its own list of medial tasks.  And guess what? It takes time to do each task!  But how much time does it take?  Think of your daily schedule.  As an entrepreneur, we usually don't work a set schedule.  We work as needed, often more than eight hours a day.  We may work for 16-18 hours a day if we include our business and the tasks of our other roles.  If you offer a service or product, how much is one hour of your time worth?  On the low end, I can valuate an hour of my time at $75.  As a person who works from home, I used to think that I was saving money by doing everything myself.  Then I realized that in doing everything myself, I was  wearing myself out and not having the energy to do the major things that I needed to do in order to make money.  So in a sense, I was losing money. 

 

Yes my house was clean, the laundry was done, that database was created and emails were sent out, but I was dog tired and struggling to complete jobs.  I was NOT using my time and resources wisely.  I had to change my thinking (and my husband's thinking- he always said that he was not going to pay someone to do something that he could do himself).  So when I look at chores around my house or administrative tasks that can be time consuming, I have to decide if I would rather be working and earning at least $75 per hour or if I would rather outsource the job.  If my time is worth $75 per hour and it takes 3 hours to clean my house, I have just missed out on $225.  However, if I paid a cleaning service to clean my house (they charge $85 for regular customers), I actually net $140 for that same 3 hours that I would have spent cleaning.  Outsourcing the job and being able to work with a clear mind and not be tired actually allowed me to still make money and get the chore done.  This is just one example of outsourcing. 

 

Take a look at your daily schedule and see where you can be working and earning money as opposed to completing tiresome tasks.  Don't be afraid to outsource or pay a fee for someone else to complete those smaller tasks for you so that you can focus on the bigger (money-making) things that need to be done.  If you need help getting started, don't hesitate to contact Kimestry Koaching! We offer a free initial strategy session to help you get started in getting your business organized and more profitable.

 

As always, if you have a specific question or topic that you would like addressed, please email kimestrykoaching@yahoo.com. 

 

 

 

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Power and success in 2014 and beyond!

How to STAY Motivated

 

 

 

Something or someone lights a fire under our feet and we start running.  We run and we run! And then what?  We get tired and we stop running, often before we reach our destination.  If you are anything like me, you have experienced this.  Finding the motivation and starting something is the easy part.  Maintaining momentum and staying motivated is the hardest part of completing a task.  What I have found very helpful is to plan, prepare and execute.  Using these 3 steps will allow you to not only get on the right track to reach a goal, but it will allow you to know where to get back on track if you fall off.  

 

1.  Plan.  This is a very important part of staying motivated.  Planning means to write down on paper exactly what we want to accomplish and the steps that we need to take to accomplish it.  This step is the most crucial of all the steps because without proper planning, the other steps will not be effective.  During the planning phase, we must identify a single, specific goal.  If we have multiple goals, they should be planned individually.  Grouping goals together makes it harder to plan and even harder to see accomplishment. 

 

2.  Prepare.  In order to take action, we must prepare for action.  Sometimes in order to execute our plan, we have to "get things together."  This might mean gathering the physical supplies or materials to complete the task or it can be mental preparation.  Getting our minds ready to do the work needed to complete the task and reach our goal. Either way, preparing for the journey makes the journey that much easier.

 

3.  Execute.  This is where we put our plan into action.  If we properly planned, we can now "check" items off of our list as we execute the plan.  Checking off items on our planning list gives us a sense of accomplishment.  This is the fuel that allows us to keep our motivation.  We watch our planning list shrink as we get closer to accomplishing or goal.

 

Using the Plan, Prepare, Execute method is very effective for reaching a goal.  It helps us to not only identify a goal and lay out steps to achieve that goal, seeing our goal get closer and closer is exactly what we need to help us stay motivated to reach the goal!

 

As always, if you have a specific question or topic that you would like addressed, please email kimestrykoaching@yahoo.com. 

 

 

 

Power and success in 2014 and beyond!

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