On our recent webinar with Scott McGregor – Commercial Broker at Mortar Finance, we were asked, “Is there a key element of a business plan that banks put emphasis on?”
Here’s our answer –
The business plans are handy. It gives the bank an understanding of the borrower’s thought processes around that business.
The fact that you’ve taken the time to prepare the business plan shows that you’ve actually put that thought behind it, which goes to the management experience capability piece within the character. If I’m looking at the business plan, I’m looking at a couple of things and that is, who are the people behind the business? bios, resumes, that sort of thing of the people that are running the business.
One thing that’s in a lot of business plans is a SWOT analysis, which is your strengths, your weaknesses, opportunities, and threats. What are the strengths of the business or the owners? Where are the weaknesses in that business? And how are they potentially using the strengths of the business to overcome that? What opportunities for growth or for new business that the owners have identified within the operation, and those opportunities may then be factored into a forecast that they’ve built, and some of the assumptions around that forecast. And then what are the threats to that business? And it might be industry related.
Things that could be threats to your business, which then become risks that the bank is going to want to see, how have you mitigated that? What are you doing about that? So those are the two important things that I would look at in a business plan. And it really comes down to the owners, and their assessment of that business.
Watch the full webinar, ‘Funding Your Next Business Acquisition’ at https://learning.benwalker.com/courses/fundingbusinessacquisition
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