How to Write a Bankable Business Plan

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In 2012, banks and angel investors gave 5.9 million small businesses, start-ups and early-stage companies over $228 billion in funding to grow their companies. The money is flowing. Is it flowing your way?

Cheree Warrick helps businesses create bankable business plans. She explains that there are five parts to a bankable business plan:

1. Market opportunity, where you tell them the problem you’re solving in the marketplace, how many people have that problem, and how many your company could service.

2. Customer acquisition and retention, where you describe how you will: Attract prospects, convert those prospects into customers, service those customers, upsell new products/services to those customers, retain those customers, and get referrals to new customers.

3. Team, where you illustrate that your company has great leadership and a cohesive team that can not only attract and serve customers but also take care of operational issues including accounting, legal and technology.

4. Competitive advantage, where you explain what sets you apart.

5. Financial projections including an Income Statement and Cash Flow Statement

What may be the most intimidating parts of the business plan is also one of the most important. The #1 item that a bank is looking for is cash flow. You have to show that you can pay all your business expenses (payroll comes first, then rent for office space, etc.) plus your home bills (housing costs, food, etc.), plus be prepared to handle an emergency or two. On top of all that a lender wants to see that you can pay back that commercial loan, month after month, year after year.

When reviewing your financial statements and considering your request, investors must answer yes to all of these questions:

  1. Is this investment something that would go well in our portfolio?
  2. Are they asking for enough money? Too much money?
  3. Do we believe there’s truly a market opportunity?
  4. Do we believe the marketing plan will attract, convert, and retain paying customers?
  5. Do we believe this team can take advantage of the market opportunity and earn the cash flows and margins they state?
  6. Do we believe we’ll get our money back?

Seems fairly straightforward, Cheree. So how do people fall short when they’re trying to apply these recommendations?

They don’t have anyone to talk with or strategize with or review their plan. OR they bring it to the banker and expect the banker to review it and tell them what’s right or wrong. Bankers don’t have the time to do this extensive strategizing to take this information and apply it to their business. Bankers tell me they want to lend money, but entrepreneurs come to them so unprepared, they don’t believe the entrepreneur will take the capital the bank gives them and do the right things with it – or make their business grow.

Second, people want to use a fill-in-the-blank template and get bankable results. It doesn’t work that way. You must be able to speak about your business in such a way that it causes the bank to say, “Wow! What this person is doing is dynamic.” And you won’t get that from a fill-in-the-blank template. You get it from being able to speak or write about your business in a unique way that draws people in.

The final point I have is this: People only lend to you when you don’t need the money. If you’re desperate for money, there are alternate sources of funding. If you’re keeping up with your bookkeeping, you should know that a cash crunch is coming. Keep your head out of the sand. A great business owner pays attention to every part of the business, not just the new customer who’s coming through the door.

When you’re doing well and you know you could grow your business 10X with a more aggressive budget, that is the time for a bankable business plan.

Thank you to Cheree Warrick of 1 Billion in Financing for these practical tips. Cheree writes business plans that banks approve. The goal of 1 Billion in Financing is to help 1,000 entrepreneurs raise over $1 billion in capital for their growing enterprises. For more information, please visit http://1billioninfinancing.com/.


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