New Ventures
Business Plan Information
Having a business plan is critical. The SBDC will help assist you in development. Please call (318) 797-5144 to schedule an appointment.
Business Plan Guidelines and Hints
What are lenders really looking for?
A. Verifiable Information. Use footnotes. If something is not a verifiable fact, do not present it as one.
B. Realistic Expense and Revenue Projections.
C. Disclose and explain the basis for your assumptions that you have presented in your plan. Especially financials.
D. Market data. Research into projected market with detailed information about customers and competitors and your strengths and weaknesses.
E. Personal Information. Background. Education. Experience of all key participants owners, managers, key employees.
F. If existing business,
1) Historical financials (3 years balance sheet and income
statement).
2) Current interim financials (balance sheet and income
statement) within 60 days.
3) Personal Financial statement and tax returns.
4) Debt schedule.
What are the most common mistakes that lenders see in business plans?
A. Overstated Income Projections.
B. Understated Expense Projections.
C. Unverifiable Assumptions.
D. Insufficient explanations of potentiaIIy detrimental information (poor credit scores, tax liens, bankruptcies, past experiences, job history) etc. Disclose negatives. You lose your credibility if your lender makes negative discoveries that you should have disclosed.
E. Incomplete background data on all parties involved in the venture (resumes with detailed narrative ofbackgrounds, education, experience, etc.). How have these past experiences prepared you for the current business venture?
What is not really important to lenders?
A. Binders.
B. Slick Paper.
C. Graphs and Charts.
D. Pictures.
These things are nice, but unnecessary. Complete, accurate, verifiable information in narrative form is much more important.
Loan Application Rejections
You have completed your business plan, visited with your first potential lender, and have been turned down. Now what?
A. Why were you turned down? Insufficient collateral, no equity, no experience, etc.
B. Was the lenders declination reasonable and logical?
C. Do you have a clear understanding of the declination? If so take corrective actions to move forward with the project. Declinations and corrective actions are a part of the process that can help you be better prepared and improve on your plan.
Corrective Actions
1. Fix Credit Problem, explain bankruptcy, etc. Some things may have affected you that were beyond your control.
2. Ask your lender for suggestions.
3. Listen to your lender to formulate a plan to proceed.
4. Ask the lender if they are willing to take another look at your request after corrective actions have been taken.
5. Ask your lender about other financing options.
Helpful Business Plan Links
