Written by Andrea Klinedinst, Compliance Assistant
Starting a business can seem like an overwhelming task, and if you’re not sure where to start, it can seem almost impossible. Are you thinking about starting a business and don’t know where to start? Our expert in business development, Jeff Strode (JS), Business Development Officer, says to start with a business plan. Jeff answered a few questions that can help you start your business plan and be on your way to starting your business today.
- What is a business plan, and who needs one?
JS: A business plan answers all of the time-honored questions about your business: Who? What? When? Where? Why? and How? If an individual or a group of individuals has plans to open, acquire, or dramatically change an existing business, then a business plan is a necessity.
- Why do you need a business plan, and how can it help?
JS: A business plan lays out the steps to be taken to ensure success. It’s very similar to a roadmap, in that, without a sensible, step-by-step plan in place, it would be difficult to track success. A thorough plan that has been reviewed by a team of experts could mean the difference between success and failure. Without a plan, trial and error is the next option – and that is risky.
- What goes into a business plan?
JS: The first thing I look for in a business plan is the proprietor’s resume. What are his or her qualifications? What experience does he or she have that would allow accomplishment of every goal listed in the plan? It can be a very subjective process.
A recent credit report is the next thing I look for. Previous financial success is a great indicator.
Third would be an investment by the business owner or their team. To seek 100% financing would send a negative message to the lender.
A listing of collateral is mandatory if a loan is part of the process. The list should include values of the collateral and sources of the valuations.
- How can MNB help with this process?
JS: Our commercial lenders talk with prospective business owners all the time. I wouldn’t say that we help create plans, but we do give a fair amount of advice. We have a checklist that we share with any prospective business owner, and we are fairly blunt. We don’t turn people away without good reason, but we do make it clear that a business start-up is a very risky and time-consuming affair that is not to be taken lightly.
- How can you get a business plan started?
JS: I recommend that people talk to their banker before they start working on a plan. Not a discussion directly related to borrowing money, but just to get a feel for the steps to take. Having a solid relationship with your bank is a good start. If I’m contacted by an individual who doesn’t bank with us, I will ask what brought them to our bank.
If you have any questions about starting a business plan, give us a call at 877-647-5050 and schedule a meeting with one of our lenders today.