Are you starting a business, growing a going concern or acquiring an existing enterprise? Whichever you are embarking on, you need to create a strong and bankable business plan.
A bankable business plan is a loan or investment proposal that earns approval and attracts financing for your venture. It is a document that addresses the needs of bankers and/or investors. It also aims to accomplish your goal as a Small Business Owner.
Before embarking on creating a business plan that is bankable, it is imperative for the Small Business Owner to determine the purpose of the idea. Failing which the effort will produce paperwork that does not cater to the specific and critical needs of potential lenders, investors or partners.
However, for it to be bankable, a business plan must clarify the added value and revenue model of the idea. It must convince its reviewers that the business is sound enough to justify a loan or an investment. Specifically, it must satisfy most, if not all, of the following purposes:
- Test that the business idea is feasible.
- Determine how best to access the financial resources that the business needs: Bankers, investors, partners or a mix.
- Outline how to secure lines of credit or payment terms, if needed.
- Identify key employees, partners or consultants that the business will get on the team.
- Relationships with customers, suppliers or consultants.
- Create a template for the successful management of the business.
How can you as a Small Business Owner, discover and express the purpose of your business plan and make it bankable? By searching for the purpose of your plan, you will be able to create a unique and convincing description of your proposed venture. Here are some key pointers:
Firstly, don’t follow a formula. Do the thinking that will bring your business concept to life, which will make your plan compelling, and encourage others to support it. If you merely follow a boiler-plate template, you will produce a canned and lifeless plan that an experienced investor or lender will quickly spot as a formula plan and tossed into the wastebasket of rejections.
Similarly, creating an effective business plan requires good business thinking, which is the heart of a bankable business plan. Its creation must follow the process of creating a business, which moves from conception to implementation. It should take you through the complete cycle, from conceiving your initial idea, through testing it and researching the market, to developing strategies and executing an action plan.
The resulting plan will be the product of the steps you have taken in creating the business in your mind, which will make it original and different from any other business plan.
Passion And Perseverance
Likewise, a bankable business plan is not expected to be a technical document, full of esoterica, and only accessible to the initiated. It should be a document for people of all skill levels.
Consequently, your goal as the prime mover of a bankable business plan is to create a unique document, infused with your expertise in, and enthusiasm for, your venture, and your readiness to learn about the business and industry. The real skill you need to produce a bankable business plan is the passion and perseverance you are prepared to leverage towards building your business.
Focus On Financials
A bankable business plan is a document about an enterprise that will be created, or exists, to make money. Since the endgame of the lender or investor reading the plan is to decide whether to lend to or invest in the business, the plan must contain credible financial projections that identify and satisfy the specific matters that concern them.
You will not be present, in-person when investors or lenders are reviewing your plan. A key purpose of your plan is for it to be able to speak for you. Your plan is an extension of your person. It is you, personified, and must project who you are and be able to speak in your absence.
Also, beyond stating your background and qualifications, the plan must be complete, organised, easy to read and persuasive. It is one way of telling the reader that you can make the proposed business a success.
You, A Team Player
Business is a team sport, and you must be a player. Therefore, a Small Business Owner must not limit himself to a venture which he would do solely. He/she must not be confined to his or her own muscles, brain power and limited resources. Even a small business requires the contributions of others with different backgrounds and skills.
Furthermore, a bankable business plan must demonstrate the willingness of its promoter to engage and manage human and financial resources towards the creation and/or growth of a successful venture.
Finally, finding and articulating the purpose of your idea is an essential ingredient in making it bankable. It is an expression of your confidence in your concept. Hence, it can help to attract the support you need for your business.
Should you need guidance and advice in finding the purpose of your business plan, visit the SME LAB