What Our Michigan Bank Expects from Business Leaders
Ask any business owner if he or she has a plan for growth, and most will answer 'yes.' Ask if they've documented their ideas, and fewer will agree. If you’re seeking financing for your company, a formal plan is essential since banks in Michigan, and across the country, want to see how the loan supports your strategy. Even if you're a cautious start-up entrepreneur, a solid business plan is vital to success.
How a Business Plan Helps Companies
- Business plans map your growth strategies. When you’re traveling to a new destination, you often rely on GPS, or other tools to direct you. A business plan is the guidance system for your company. It outlines the path you’ll take to achieve your goals.
- Your business plan unifies your team. A solid business plan is also like a playbook for your organization. It explains what you sell, who you sell to, and how your company structures your earnings and investments. The plan also outlines your team roster and your operating rules.
- A business plan helps supports success. If you’re managing a start-up, you may wonder if writing a business plan is worth the effort. Research from the Harvard Business Review shows entrepreneurs with a business plan are 16% more likely to have a viable company than those who didn't document their path.
- Updating your plan helps your company stay relevant. Writing a business plan as the market changes (at minimum every 3 to 5 years) allows you to assess the marketplace, your competitors, and adjust your course to meet customer needs.
Guidelines for Your Business Plan
Creating a business plan takes time and effort, but it doesn’t need to be a 40-page thesis. We have created this outline of the elements that Banks in Detroit, Ann Arbor, Grand Rapids and across the state of Michigan will generally look for in a business plan.
Your business plan generally needs to answer these questions (however additional questions may be warranted):
- What makes your product or service desirable or unique?
- Who is your target customer, and how large is this group?
- How will you protect your product or service from competitors?
- What will you do and how much will you spend to market your company's offerings?
- For start-ups, how quickly can you launch?
- How much cash flow do you expect?
Major sections to include in your plan can be:
- An Executive Summary to outline your business purpose and your products or services.
- A Company Overview containing details like location, leadership team, and company history. Include your goals and action plans, as well as your business model and the credentials of your leadership team.
- Your Products or Services and points of difference vs. your competitors. Outline your target audience and your pricing and distribution strategies.
- The Marketing Plan for communicating with customers about your offerings. Explain your brand strategy and the channels you’ll use to reach your audience.
- A Financial Analysis with a current balance sheet, profit and loss statement, and cash flow analysis. Start-ups may show estimates in this section.
- Your Projections for company performance over the next 3 years, including highlights of any changes you’ll need to make to reach your financial goals.
- An Appendix with additional useful information about patents, contracts, or licenses.
If you have questions about the information Level One Bank or other banks in Michigan need to see when you submit your business loan application, contact our team. We’re here to help you succeed and thrive.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett, investor