By
definition
a business plan is simply the steps you take to create or start a
business. Most people or
would be entrepreneurs don't have a clue to what the business planning
process entails.
At
Spirit Financial, for those with business ideas or initiatives, we
provide customized assistance with this process; that is from
incorporating (LLC's S-Corp's) a business (profit/non-profit-501c3
designation, etc.), to developing vision, objectives and tactical
strategies needed for the achievement or fulfillment of what started
out as an idea.
Our
planning consists of the basis for operational budgets, targets,
procedures and management controls. So, in a nutshell, to
successfully launch a new business initiative; a formalized documented
business plan is important. This is despite the fact that
most
mom and pop operations start and operate without one. But,
their
potential for both survival and growth is often hampered without a
clear and sustained commitment involving implementing steps necessary
for legitimacy and viability.
Essentially,
the results of the business planning process are usually
captured in a business plan. Any investor, lender or those
with
business in an existing position responsible for approving new
initiatives will invariably want to see a business plan before making
any financial commitment.
The
business plan, besides being a prerequisite for gaining access to
finance, also provides the blueprint
for successfully
creating and running a new venture. This is so, even in
fast-moving markets where the plan itself may quickly become obsolete.
The insight gained from the planning process that created it
remains invaluable. So, entrepreneurs you can't abort the
process
on your way to success.
In respect
to a good business plan for obtaining a
business
loan, running a profitable business is the ultimate goal.
Profitability is neither instant nor guaranteed.
Note that
the operative word here is profitable. Assisting business
clients
in negotiating with lenders or investors for favorable terms to afford
the business a fair opportunity to reach profitability; is our
specialty here at Spirit Financial. All kinds
of dynamics
can affect a business's profitability, i.e., insufficient capital, poor
planning, management, shifting markets or a bad economy, etc.
Renegotiating the terms of an existing loan brings
about
accounting implications where the borrower must consider if they are
trying to dispose of or reconstruct their debt. We will
examine a
business's considerations to financial statement (P&L &
Balance
Sheet) along with others to help us to properly advise client
of
their option(s) to protect and preserve business assets;
including
bankruptcy as a last and possible viable alternative.
Some people
give up too easily. It's not
easy
building and running a successful business, particularly in a changing
business environment. But in most cases and with
perseverance;
negotiating or renegotiating a loan is doable. In the face of
delinquency or foreclosure, a loan work out is
a plan of
how to restructure debt or modify the terms of the loan secured by
assets such as real property like that of a home mortgage.