One of the questions we are consistently asked by the small business community is “What is a bank looking for in a business plan?” To provide some insight on the matter, we asked someone from the “front lines” to give us their thoughts.
The Greenville Area office of the Clemson SBDC would like to welcome guest blogger Jim Rohrer, Senior Vice President with Independence National Bank:
What is a bank looking for? First of all, do your homework before going to the bank!
1. Be prepared with a concise business plan that includes the following:
__ A summary of the company’s goals
__Explanation of how the company began
__Resumes of the key participants in the business
__Description of your service or product
__The market potential for your service or product
__A concise marketing strategy
__Three to five year financial projections
__Contingency exit strategy
2. Know your business; know your numbers.
Bankers want to know precisely how your projections were obtained. From sources of revenues to expense line items, what was the derivation of the numbers?
3. Know potential pitfalls.
Consider in advance any unforeseen barriers to your success such as competition, future changes in technology, legislation or economic downturns.
4. Know your exit strategy.
Whether the business performs as expected or not, it is important to have a plan as to how and when you will get out. What contingency plans do you have in place such as alternative sources of repayment or a management succession plan?
So, there you have it. Nothing impossible here. Remember – it can be done!