Business plan requirements are a common need for many of our clients at 7 Park Avenue Financial. Whether it's a start-up business plan or one for an established firm we prepare and deliver on many business plans to our clients. There are a variety of needs when it comes to business plans, but our focus is typically on obtaining financing for our clients. The 'business plan' is really a financing proposal - that's how we look at it at 7 Park Avenue Financial and our ability to customize your plan is our 'secret sauce'
Many bankers and commercial lenders and financiers have referred their customers to 7 Park Avenue Financial for such a document. They know we will deliver a professional industry-driven final document that's realistic and what the bankers and lenders want/need to see. They realize that a free business plan is worth just that! Clients want more than just a business summary.
The sad truth is that many business plan templates available online are very marketing, or even 'ego' driven. Our executive summaries and cash flow and financial projections are focused on obtaining financing for the products and services of our clients.
What Makes A Great Business Plan?
We're often asked 'how to write a business plan'. It involves a significant amount of business expertise. Whether it's a market analysis, a strong executive summary, or financial projections our focus is on creating a plan that attracts debt or cash flow financing and funding. An appropriate level of research is required for a good business plan, allowing your business to differentiate itself from the competition.
Cost of A Business Plan
Plans prepared by our firm are very reasonably priced and are almost always well below the price of other business plan preparers. Our plans are delivered in a timely fashion, but we stress to our clients that some key input and information around the business is required.
Almost every lender, banks included agrees that entrepreneurs and owners need business plans with a clear goal and outline for their business model. Our plans are geared toward getting a loan, outside financing, or in some cases equity investment.
The plans will show you bankers, financiers, investors, and potential acquisitors how you make money and how they will be repaid or in some cases earn a return on their investment. While some firms focus on clever 'pitch decks' and PowerPoint presentations they rarely are a replacement for a good business plan.
It's all about ensuring you have a document that includes data on your industry and information and statistics that prove financing viability.
What Are the Key Components of a Business Plan?
What's Important When You Want to Create a Business Plan?
The format of a typical plan includes some key financial statement information such as opening balance sheets, 3 years of cash flow and revenue projections, and information on the owners and the team. Our plans include your website and social media strategy if applicable. Those digital and social media items certainly were not part of traditional elements of plans of the past!
Remember also that the lender works for someone and it is key that your final document communicates the proper criteria for determining business loan or financing approval. You should be prepared to understand that in some respects the plan will be 'attacked' by the lender, so your ability to show 'upside potential' and to generate enthusiasm on your company is key.
It might (but shouldn't) come as a surprise that your full plan is not read in totality by lenders. Some experts refer to the '5 minute read', with careful emphasis placed on financial and management experience. That's advice worth knowing. The takeaway? It's not always about the font and the pictures!
Here's Why Banks and other Commercial Lenders Want a Plan and Why Writing a Business Plan Summary is so Important
That ability to provide clarity and a vision to your business will help attract the financing you need. So the step-by-step process of knowing what resources will best lean in your favour is key. Your final plan should identify yourself and your team as doers, not dreamers!
The sign of a well-crafted business plan is one in which you have conveyed that you have a strong understanding of your industry, the costs of entering that industry, and competitive issues that will have your firm stand out, with customers clearly wanting to buy your product or service.
What Are the Key Elements of an Effective Business Plan Template - What Business Plan Tools are Required?
Here is a list of the key elements of a business plan that we utilize at 7 Park Avenue Financial:
Financial models - sales, expense, and profit projections (Upside potential/profitability)
Pricing/Product / Profit Margins
Industry / Management overview
Target market / customer
It is important to remember that business plans are usually used for different circumstances, in some cases they might be focusing on a startup business, while in other cases it might be for a loan or additional financing for equipment or expansion. Note also that a great business plan can simply be used as an internal document highlighting to management and employees the mission statement and financial goals of the company. In that case, it should be designated as company confidential, rights reserved, and it can grow with your business.
In summary, we do not mean or infer that a plan is in fact absolutely required for a lender or financing, but a business owner or entrepreneur with no plan is, outside of luck, is potentially guaranteed to fail.
7 Park Avenue Financial / Copyright / 2020