I talk to many people who are trying to borrow money to start a business or expand their business. Most don’t have a business plan competed. If you’re going to borrow money to try to start or grow a business, you must have a business plan which includes a pro forma financial analysis of your operations including your sales and projected profits for at least three years and projected balance sheet for the same period.
Many novice business people think that a banker is just going to loan them money because they come in and ask for it, and many of the entrepreneurs borrowing funds think that the business plan is something they prepare just for the banker, but it’s not.
It’s important that you have a business plan with monthly results and that you’ve thought about those results. You should use the business plan and look at it every month to see if you have achieved the results. If you have not, you should make a plan to fix the disparity and get back on track so that you are meeting what you said you would achieve when you applied for the loan.
Your banker will be watching to see how you perform against your projections and will be interested in your plan if you have a miss. Even on the simplest of loans, like a small SBA loan, you should expect to produce the business plan and projected financials. As you prepare your business plan, remember it’s not just for your banker.
Remember, only you can make BUSINESS GREAT!
This article was provided by autosalvageconsultant.com, which was formed in 2001 by recyclers for recyclers, to help them improve their businesses.
Published in the September 2022 Edition