Preparing a business plan and pitch for investors or a bank loan

"The bank wants a business plan"

You need money to expand, buy machinery or open a branch, and the bank or a potential investor asks for a business plan. Many owners then download a template, fill forty pages with generic text, and attach projections that rise smoothly every month. Experienced readers see through this quickly. A good plan is shorter, more specific and more honest, and writing it properly often improves the business decision itself.

First, a caution: every bank and investor has its own requirements, documents and criteria, and these change. Ask your bank or the investor exactly what they need before you start, and involve your accountant for the financial statements. I will not guess at lending rules here.

Know who is reading

A bank and an investor want different things.

• A lender generally wants to know whether you can repay on time from the business's cash flow, and what happens if things go wrong. They look at your track record, your records and accounts, the purpose of the loan and how it will generate the cash to repay it.
• An investor buys a share of the business and wants that share to grow in value. They look at the size of the opportunity, why your team can win, and how they might eventually get their money back.

Write for one reader at a time. A plan that tries to please both usually convinces neither.

What the plan should cover

Keep it as short as it can be while still answering the real questions:

1. Summary: what you are asking for, what it is for, and what it will achieve. Write this part last.
2. The business today: what you sell, to whom, how long you have operated, and your current sales and margins from real records.
3. The opportunity: the specific problem or demand, with evidence you gathered yourself (orders, enquiries, dealer requests), not general statements about the industry.
4. Your plan: what exactly you will do with the money, step by step, with a month-by-month timeline.
5. Market and competition: who else serves these customers, and why customers choose you.
6. Team: who runs what, including family members, and how you will fill any gaps.
7. Financials: past figures, projections with their assumptions stated, and a cash flow forecast.
8. Risks: what could go wrong and how you would respond.

Building numbers people trust

Projections are where most plans lose credibility. Build them from the bottom up, number of customers or orders times average order value minus real costs, rather than "the market is huge and we only need a small share of it". Write every assumption down. Prepare a cautious case alongside the expected one, and show that the business survives the cautious case. Make sure your existing records (sales, bank statements, tax filings) agree with what the plan says; inconsistencies hurt trust more than modest numbers do. Have your accountant review the financial section.

The pitch, and common mistakes

For a meeting, prepare a short version, around ten slides or a two-page summary, and practise explaining it in a few minutes in plain language. Expect hard questions about repayment, competition and what happens if sales are slower than planned.

Mistakes to avoid: inflated projections, hiding problems the reader will find anyway, asking for money without a specific use, and a plan that nobody in the business has read except the person who wrote it.

You should write the core of the plan yourself, because you know the business. An adviser helps you structure it, test the assumptions, research the market section and rehearse the pitch. That is part of my business development work.

Start with one page

Before any template, write a single page: what you need the money for, what it will change, how the business will repay the lender or reward the investor, and the three biggest risks. Then ask your bank or investor what full document they expect. If you want help building the plan, get in touch.