What bank advisors look for in a business plan?
In addition to internal use as a management and planning tool, companies need a business plan when important events are imminent. These are:
- Expansion, cooperation, acquisition of partners
- Change of management or ownership (e.g., change of strategy or succession plan)
- Reorganization, restructuring, reorganization
- Merger, takeover, liquidation
- Product launch with investment needs
- Financing (banks and other donors)
If you want to raise capital at the latest, you can hardly avoid a business plan. Business advisors at a bank often pay attention to the following three points in a business plan:
- Is the business plan as a whole coherent, and is it plausible?
- Does it contain contradictions?
- Are the assumptions and forecasts realistic? Are these backed up with well-founded figures?
Even more: A formulated goal is a prerequisite, and the application to the advisor at the bank must be set out. It is best to determine what information your financier or investor expects because the business plan consultant must be consistently oriented towards the recipient.
A business plan must contain these elements
A business plan should also be logically structured in content and have a clear table of contents. It must address the addressee optically: through an attractive design, a pleasing layout, through visually prepared data in the form of (info) graphics, tables, or diagrams. As standard, a “business story” contains the following elements on around 30 A4 pages:
A management summary sets out the most crucial business plan points on a maximum of two pages. After reading this summary, the reader needs to be clear about the business idea and why they should be interested.
Data and facts about the company: goals, legal form, organization, partners. What are the company’s values (corporate philosophy)?
3. Products and Services
Details on market performance: which product, which service does the company offer? Which specific customer needs are satisfied with it? What makes the offer unique or particularly attractive compared to the competition?
4. Market and customers
Findings from well-founded market analysis: How is the current market situation? Is the market saturated, and is there a displacement battle? Which market trends are emerging? Where are there market niches? Which customers can the product or service be sold to? What are the characteristics and needs of the potential customers? Why should they buy the product or service?
Details about the competitors in the market: Which providers are there, and how are they established and active in the market? Who has what market share? What business models does the competition have? How does your own company distinguish itself from competing companies? Where are the strengths and weaknesses of the match compared to your own company?
Details on the marketing strategy: How and with which instruments and means are the products and services sold? At what price? How does the company communicate about itself and its offer? How does it advertise its products? And how are they expelled?
7. Production and administration
Information on the manufacture of products and services: What is produced in-house, what is purchased ready-made? How are the products manufactured? Who are the suppliers of goods? Who takes care of the bookkeeping, takes care of personnel issues, purchases goods, acquires and advises customers, designs the advertising, takes care of the logistics?
8. Location and infrastructure
Details about the company location: Where are the products developed, manufactured, refined, stored, traded, sold? How do salesrooms, counters with customer contact, offices for customer meetings appear?
9. Management and organization
Facts about the critical people in the company: By whom and how is the company managed? Who has what specialist knowledge, what professional experience, skills, and tasks? How is the collaboration organized? Who is responsible for what?
10. Risk analysis
Analysis of the risk potential: What are the risks for the company? How can they be avoided or reduced? Which ones have you worn yourself? What are the “best case, realistic case, and worst-case scenarios” for certain risks?
Detailed financial planning for the start of business: How much capital does it take to build a company? Where does the required money come from? Who are the lenders? How much credit do you grant, and under what conditions? Can this business generate enough income? What is the company’s financial development like?
12. An Action plan
Details on the following steps:
- What is to be done by when and why (milestones)?
- Who is responsible for that?