Can Your Business Plan Predict The Future? Cost, Advice From The Experts

Picturing Finance Success Via A Solid Business Plan



OVERVIEW – .Information on business plan cost and advice in Canada . What do experts say on financing success relative to your business plan




Do you need a business plan for business financing?


At 7 Park Avenue Financial we get that question a lot. While we can categorically say that certain types of business financing in fact require a solid business plan the Canadian business owner / manager can successfully achieve many types of financing without that document.

Larger more sophisticated financing which might require an equity component certainly almost always require such a plan. Venture capitalists and private equity lenders focus on the plan with significant analysis and emphasis required on growth and exit strategies which is why they are of course considering the investment in the first place. These documents tend to be very detailed oriented and in effect become the company’s road plan to financing.

A number of business financings can in fact be completed without a plan. They might include equipment financing, receivable financing, tax credit monetization, asset based lines of credit, etc. These types of debt or monetization finance strategies are often simply completed with detailed application forms and accompanying business information such as financial statements, owner’s financials, a cash flow forecast, etc.

The real answer to the question ‘do we need a business plan ‘in fact is driven by the nature of financing you need and who is providing it.

In certain other financings a plan is definitely required. Start up ventures almost always have a business plan attached to the finance request. We originate a number of Government Small Business Loans for Canadian clients and they almost 100% of the time require a basic business plan.

What is a good business plan outline in summary?

There are certain key elements of a plan that are almost always required and in fact help to guarantee favorable notice by the lender /investor. They typically include”


Executive Summary
Company Overview
Competition/Industry Analysis
Product/Service Description/Pricing
Management Overview
Financial Forecasts



We see many plans that in our opinion are either provide so much info that it leads to confusion and questions by the lender/investor . Talk about a self defeating strategy when the document you in fact intend to generate financing in fact only confuses the issue. So our advice is to stay clean and concise when it comes to both narrative and financials.
Naturally the lender or investor can well invoke their right to request additional info or clarification, but why confuse things at the outset? Questions of issues raised by the lender or investor can well help you identify how your company is in fact being viewed.


Who prepares business plan?

Business plans are typically prepared by the borrower themselves, a third party, a Canadian business financing advisor, or your accountant. Depending on the type of plan and the relative size of your financing request each of these parties can bring a certain level of expertise to the table.


How much does a professional business plan cost?

We see the costs of professionally prepared business plans vary all over the map. The actual cost of the plan will often relate directly back to the type of firm or person that prepared it. Our own firm for example typically charges $1000.00 for a document that relates directly to the type of financing we are originating from the client.
We’ve met many clients that that have spent ten times more for a plan that, although properly prepared, simply was so much more than the client required. One ‘war story ‘we can share is of a medical clinic that approached us for financing. They had spent close to $ 5000.00 on a plan that was not yet delivered in completion, and had found themselves doing most of the work. So we suppose our advice is that in the world of business plans it’s a case of NOT always getting what you paid for!

We can also add that your business plan preparer must in fact be sensitive to your timelines and more importantly you must impress upon them the nature of the financing or investment you are seeking.

What are the common mistakes in business plans?

We have already touched upon some of the key mistakes made in plans – To summarize they are:

- The plan must contain essential finance, company and industry criteria
- You should not over pay for a proper business plan
- The type of financing or investment you need should dictate the size and quality of the plan
- The first page of the plan should be clear and concise and catch the lender/investor interest
- Things that are obvious to the business owner might not be so in the eyes of the investor or lender – put yourself in their shoes
- Sales projections are not realistic
- A business plan is not necessarily for finance or investing – it’s a great tool for the business owner and manager to look back and scorecard themselves


We can also add that many plans seeking debt financing are too improperly focused on sales, marketing and the story. A lender is not going to participate in the upside of your business – they do want to see a proper finance and cash flow plan that shows one thing – how they will be repaid.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business plan needs at a reasonable cost .







Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

BUSINESS PLAN EXPERTISE = 7 PARK AVENUE FINANCIAL




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com















Stan Prokop