Business plan: how do you make sure your banker likes it? – Regulations


How do you prepare a business plan to get bank financing? Here are some tips that will help you convince your banker.

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How do you create an effective business plan?

A business plan is an essential tool for the success of corporate fundraising campaigns. It is a document in which the spearheads of an entrepreneurial project are described.

In order to convince donors, it is necessary to pay particular attention to the drafting and presentation of this text. But how do you succeed in this exercise that seems far from obvious?

In the rest of this article, discover the essentials you should rely on to convince your banker with a business plan.

What is a business plan used for?

Whether starting a business or accelerating an entrepreneurial project, a business plan is an essential element for the success of the business objectives.

What is a business plan?

A business plan or business plan is an official text that describes a company’s roadmap to achieve its objectives.

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

In general, the business plan is written in the context of:

· The establishment of a company;

· The sale or transfer of a business;

· An addition of activity.

The content of the business plan differs according to the companies and stakeholders for whom it is intended.

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

· The editorial part;

· The financial part is also called financial forecast.

The editorial part presents the entrepreneurial project and objectives as a whole, while the financial part contains a series of tables showing the way in which the company ensures its sustainability.

Click here for more information 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 business is viable to ensure stakeholder engagement.

To achieve this, it is necessary to set out the objectives of the company, the means at its disposal to achieve them, as well as the strategic and operational plan that it carries out.

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

For project leaders and business leaders, it is used to make the right decisions to achieve business objectives.

After all, by comparing the forecasts with the reality on the ground, the project leaders can adjust their strategic and operational choices, while ensuring that they do not deviate from the basic objectives.

Furthermore, a business plan is useful to convince technical and financial partners to work together through investments, logistics or other forms of cooperation.

The business plan is then used to highlight the company’s sustainability, financial potential, and benefits partners may 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 relationship between people, project and market. It is important for him to convince himself that the initiators have taken the contours of the project into account.

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

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

Finally, lenders want to be reassured by the consistency of the financial presentation. Offering solid guarantees is usually not enough for a banker. It is very important to him that the financial plan as a whole is level.

Writing the business plan

Based on the expectations of the bank, you can identify the key points you can rely on to increase your chances of obtaining bank financing. Click here for more information about building a business plan.

The presentation of business promoters

For many investors, this is the most interesting part of the business plan. The project leader presents in a maximum of 3 pages the managers, employees and partners involved in the entrepreneurial project.

At this level, the banker will mainly want to make sure that you have enough shoulders to carry the project. Do not 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 might be helpful to reference it.

Understanding the investment market

The purpose of this section is to demonstrate product-market fit and to demonstrate the in-depth understanding and mastery of the market that the project leaders have.

The market analysis should include several aspects to highlight the general features, the opportunities it presents, as well as the limitations and potential threats to the success of the entrepreneurial project.

While your business plan is very unlikely to teach your banker anything new about your industry, you should always talk about it to show him that you have mastered your craft.

The commercial strategy to be implemented

The business strategy is determined on the basis of the results of the market analysis. The purpose of this section is therefore to show how the company wants to get the most out of its value proposition in the market.

It is therefore essentially a matter of reflecting the strategic decisions taken to achieve the commercial objectives.

To gain the trust of fund providers, you need to come up with a product sales strategy that best fits the market. Next, 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 a schematic form before adding a full text.

The provisional financing budget

Here you have to talk to the banker about money. If the previous points are important, this one is crucial. It will just have to be perfect to convince the banker.

For this, the project leader must provide financial guarantees about the company’s ability to recover in the event of bankruptcy.

He must also demonstrate his ability to raise some of the funds needed to run the business as the bank will only fund a portion of the planned budget.

In addition, keep in mind that banks are reluctant to finance working capital needs. Bank financing may not be used to manage the purchase of starting stock, communication costs or seed money.

It is therefore advisable to clearly demonstrate 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 for future members of the company.

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

It is strongly recommended to indicate in the business plan with which different experts the company will work, whether it is a chartered accountant and/or a lawyer. In addition, the project leader shows the bank in his business plan that he is well supported and advised from a tax and legal point of view.

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