Building a business is like starting a journey, your destination has to be clear to you from the onset. You need a guide that clearly shows your destination, the path you want to take to reach your destination and resources that you need to reach your destination successfully.
In essence, you need a business plan and not just one you write for the sake of it, you need a bankable business plan.
The truth is, writing a business plan is often tedious and time consuming but only because it requires you to carefully think through every aspect of your business. This process which is critical to the very foundation of your business is as beneficial as your final business plan because, it helps you make a critical appraisal of all the key elements necessary to the success of your business.
But of course, a business plan has many more benefits apart from guiding you through each stage of starting, running and growing your business, a business plan (if it’s bankable) can help you get access to funding.
A bankable business plan is a necessary tool for convincing investors and lenders that they will see return on their investment and that your business will not default on their investment.
What Does It Mean For A Business Plan To Be Bankable?
When we say a business plan is bankable it means simply that it provides sufficient information to help your business receive loan from lenders. You see, when you seek investment or credit for your business, there are certain things that investors and bankers want to see in your business plan to be able to make favorable decision.
These factors are critical to create a good impression of your business, so whether you’re just about to write your business plan or you already have one that you’re not sure is bankable, here are some things to do to make your business plan bankable.
- Financing Needs and Projections – A well written financial plan is at the center of a bankable business plan. But it is also the most intimidating parts of your business plan too, which is why most business owners try to avoid it. Your lenders want to see your cash flow statement (a positive cash flow is a good indicator that you can handle your businesses expenses). They also want to see your financial needs, what you would be spending the money on and how you plan to pay back the loan. Your financial plan is not complete without your financial statements and financial projections that give a realistic forecast of your business’s future revenue and expenses.
- Market Analysis – The more information available the more your lenders and investors are able to estimate and calculate their risks. The market analysis segment of your business plan should expose them to various factors at play in your target market or industry. It should contain the size and status of your market (is it declining, expanding or stagnant?), a detailed analysis of your competitors, who your target customers are, the market forces at play, and the risks involved in your business operations.
- Marketing and Promotion Plan – Your marketing and promotion plans should tell your readers what your target customer demographic is, show actionable steps on how you intend to carry out your marketing, sales and advertising strategies. It should also show how you intend to attract, convert and retain your customers.
- Unique Value Proposition – A bankable business plan should tell your readers in what areas you are providing value to your customers but more important how your value proposition differs from what your competitors are offering your target customers. It should be able to show what your core business activities are (ensure you’re able to narrow them to a few basic ones).
So it is clear, these are not the only information that should be contained in your business plan but these factors are essential to making a good impression on your investors or lenders among many others. Additionally, you should ensure that your business plan is not boring , make it as concise as you can even as you include relevant statistics and information necessary to convince your readers to invest in your business.
A business plan is more than a just-have business tool it is a marketing document that could be the difference between a growing business and a failing one. Create a business plan that plays a positive role in your business, make it bankable.