If you have spent the time to develop an idea for your business at some stage you will ask yourself, “How do I fund my business?”. Many people only realize they have to provide a bank business plan when a bank asks them for it. If this is you, do not worry, you are not alone.
Banks agree that you need to develop a bank business plan before you even embark on your journey. And certainly before you approach them for funding.
You may have the greatest business vision ever conceived. But until you understand it and are able to convey it as a valid investment proposal you won’t get very far.
After years of writing and evaluating bank business plans for a variety of different businesses, it is abundantly clear now that the business planning process is invaluable.
The word “process” is key here. It is exactly that, a “business planning process”. So don’t panic if it is taking longer than you thought. This is particularly true for a bank business plan.
So How Do I Approach A Bank Business Plan
The business planning process will help you start asking the key questions. This will help your strategy for developing your bank business plan. It will also answer the key questions that banks will ask you when you approach them for funding.
It is vitally important that you consider your bank business plan from the perspective of the bank. The bank will view your bank business plan more critically than you.
There will be a focus on the inherent risk of your bank business plan rather than passion for the idea.
Your job as the business owner is to convince the bank that you have a viable product which has a unique selling point. You also need to show that you will have a reasonable chance of competing successfully in your market.
READ MORE: How to write a Simple Business Plan
Following the business planning process will help you address the risks in your bank business plan and will increase your chances of success significantly.
Ask your self questions like:
- What is your mission and the key milestones to achieving it?
- What is unique about your product or service?
- What is my target market and what are the key drivers of the market?
- Who are my competitors and what are the strengths and weaknesses?
- How much can I feasibly sell my product or services for and what is my sales strategy?
- Who are the management of the company and what are their credentials and experience?
These are just a small sample of the questions you should be asking yourself. Do this before you approach any bank or even embark on a financial projection for your bank business plan.
Thinking and answering these questions will help you formulate the strategy of the business on paper to cover off the main elements of a bank business plan before you start writing, and can save you many hours of wasted time and money.
What Do Banks Focus On In A Bank Business Plan?
Most people make the mistake of thinking the banks only care solely about the idea and the numbers. I’m going to let you in on a little secret here…Banks support strategic people, with good ideas and sound business acumen, not overly optimistic financial projections.
The key to being successful with a bank business plan is to understand your business and its forward strategy. K
now the risks and how you are going to plan for the future to ensure they get paid back. That’s what they really care about!
People who understand the business planning process and execute it correctly make the difference in that equation. They have a much higher chance of successfully completing a bank business plan and securing funding.
To your future success!