In the final post of our business funding series, let’s move on to the specifics of a well-prepared business financing plan that will support your request for funding—and your ability to get it.

How do you go about gathering all the business information and financial data that you’ll need? A quick internet search (or a visit to an actual bookstore or research library!) will reveal tips, techniques and strategies for pulling together a business financing plan that does the job it needs to do.

Here are a few things you’ll want to consider in your business financing plan.  This is by no means an attempt to leave you to figure it out yourself.  We’d be glad to help you through the whole process, since it may be less simple than you think.

Business Financing Plan Sections

1.  Executive Summary

First, you’ll need an Executive Summary that clearly outlines your company’s business purpose, mission, vision, goals etc.  This is the “why should I care?” part of the plan for the lenders.

2. Business Overview

Next, explain the type of business you’re in, and where it fits into the marketplace. Include what the business is all about.  Describe your products and services, defining your operating and marketing plans, providing a list of major vendors and customers, and supplying a competitive analysis.

3. Business Structure

Describe your company’s ownership structure and the qualifications of your management team and other key personnel. You could also include a list of financial advisers, including Henry H Jones, CPA (or your accountant), your attorney, and any others you consult with.

4. Financial Situation

Provide detailed financial data.  This includes sales forecasts, profit and loss statements, cash flow projections, balance sheets, and standard business ratios.  This is something you definitely need to talk to us about.  It’s not the kind of thing you want to attempt on your own.

5. Other Information and Financial Data

Finally, provide miscellaneous attachments that flesh out other important details of your operation, including copies of contracts, franchise agreements, leases, letters of intent, and tax returns. You could also include a summary of your average amount of funds on deposit, a list of your investments, fixed and other assets, with market value if that’s appropriate.

Other information and financial data could include:

  • A list of major vendors and customers
  • The aging of receivables
  • Details of notes receivable
  • Inventories with details on price stability, aging and turnover
  • A statement of liabilities and reserves
  • A comparison of your operating and balance sheet ratios to industry averages
  • Cash flow analysis

(If any of that is confusing or difficult, don’t fear. We do this kind of work every day and would be glad to smooth the path for you.  Start here.) Start here

Remember that any miscellaneous information is meant to assure the lenders or potential financiers of your business development plans. Don’t “pad” your business financing plan presentation with superfluous or useless information that does nothing to enhance the nuts and bolts image of your business.

Be honest.

It may seem obvious, but always be totally honest and forthcoming about your financial situation. Don’t try to hide or diminish past credit issues or current operating difficulties. Instead, be prepared to discuss any business problems you’ve encountered.  Also be ready to address the steps you’ve taken to prevent similar problems in the future.  Remember our tip about surprises which we discussed last week.

Being open about where you are and where you want to go, you’ll demonstrate both the level of thought you’ve given to making your business a success AND your personal integrity.

Work with your accountant and other advisors

Remember that working closely with us at Henry H Jones, CPA, will be a big help in preparing your business financing plan and securing the type of financing that will contribute to the future growth of your company. We know how a business can be managed profitably and positioned for growth, and we are a valuable sounding board as you evaluate and choose between funding options.  And remember that we have established relationships with financial sources, and can direct you to the ones that would be most receptive to working with you, your type of business, your industry.