In this report, I have described how Chad Frank and Kyle Carson can come up with a business plan. Since they need to borrow money from the bank to finance the growth in their business, they will be needed by the bank to present their business plan before lending them money.
I have explained to them what a business plan is and, what they will be needed to include in it. They should have a goal for their business and, the mission and vision statements. These will govern all the activities that take place in their business since they have specific goals and objectives used by their employees and them as the managers. There are also important factors that Chad and Kyle need to consider when coming up with the plan. The plan fits the needs of their business, should be realistic, and have objectives that are specific and measurable and, they should state all the assumptions they have made.
The report explains the things that the banker and any other lender will want to see in the plan. They will want to know how the business is managed, the customers and, the products and services which they deal with. The marketing and pricing strategies will also be important so that they evaluate their future and growth in the market. In addition, I have given them some advice on what to do when they are ready to present their plan to the banker.
A business plan is a layout of the goals of the business, why you came up with those goals and how you are planning to attain them. You should be able to outline your reason for forming Precision Auto Detailing, what and how you wanted to achieve its goals. The plan could also include the team with who you work in order to achieve these goals. This plan will enable you determine your financial goals like the profits your company is making. You should be able to look into the future of the business, allocate resources to each section and state the probable strengths and problems you expect to face when running your day-to-day activities.
When you are coming up with this plan, it should fit the needs of your business. It should be used in the running of the business and not just for presentation to the bankers. The plan should incorporate all the aspects of management, and should also include the plan for lenders. This will enable them know that you had planned to seek financial assistance. Another factor is that your plan should be realistic. You should plan for products and projects that are possible to implement. What you plan for, should be a plan that can be executed by the staff you have that is, the company can incorporate this plan with ease. You should also plan for specific and measurable objectives. Include your forecasts for the sales and the profits and also the budget which you use. In your budget, the amount you plan to borrow should be included on the liabilities side. This shows that you are experiencing a deficit which you need to finance and that is why you are approaching the bank. In the plan, indicate who is responsible for each action that needs to be implemented. Since a business plan is done for the future, there are assumptions that you will make. Indicate which are the assumption and what they are based on (Timothy, 2009, par. 3-7)
This plan is very important when you want to raise capital. It is a basis for the growth of your business. For the bankers to fund you, they will first require to see this plan. This is because, as much as they will be interested in your ideas, they will also want to evaluate your management level. You must show the knowledge you as managers have in running the business. Also, you should express your dedication and passion to this business as this will make them understand how committed you are to achieving the business goals. They will also evaluate the commitment and competencies of your employees.
It is also important that you understand what your customers require and you attend to their needs. You should outline how you market to your customers and what strategies you use to retain your customers. This will enable the banker know the future of the business and he or she will be confident that you can repay their money. You should also outline all the services and products which you sell in your business. In addition, outline the type of customers you serve and the overall market you cover since, the banker will want to know the kind of customers you serve (Vcgate, 2009, par. 2-3).
Your plan should also outline your marketing strategies to show your investors how you cope with competition from other people with similar businesses. Describe the size of your market and its features, the average amount of sales you make and the expected growth in your market. You should state what strategies you use in determining your prices and the effect this has on your services. It is important that you include the growth you expect in the future, the allocation in the market and trend control.
Here is an outline of how you can write your business plan:
- Executive summary
- Company description
- Product or service
- Market analysis
- Strategies and implementation
- Management team
- Financial plan
When you are ready to present the plan to a banker, you should both go to seek financial assistance from the bank you prefer. You should present yourselves both since you are partners. The banker will need to appraise your business before funding it so, all the financial statements should be in order and up to date. You should also inform your employees that you are expecting some visitors so that they can prepare to answer any questions they are asked. This will improve the confidence of the bankers and they will be sure they are funding a good business.
You must retain the document you make and in case of any changes, you can amend the plan. You should be reviewing this plan on an annual or semi-annual basis to evaluate whether the business is being run as planned. You could also e-mail me a copy of your plan so that I review it.
Timothy, B. (2009). 8 factors that make a good business plan, Business Planning. Web.
Vcgate (2009). The importance of a business plan. Web.