Creating a bankable business plan takes quite a bit of prior planning and due diligence work prior to writing the business plan itself. Bankable business plans don’t come from business plan templates or some software you can download off the web, and they don’t come from business plan writers who don’t understand the fact that a bankable business plan is only bankable when and where it demonstrates proactive execution risk management is baked into the pie. Your business plan only becomes potentially bankable when it can answer two important questions:
- Does the market evidence suggest a business opportunity for investment may exist? and
- If the opportunity does potentially exist will the promoter be able to successfully pull off the venture or will the money be wasted?
Everyone thinks they have the answer to the first question even though most business plans fail to address the issue with veracity. Virtually everyone fails to even consider the second question in terms of what the underwriter wants to see. The underwriter wants to be able to see the answer to the worst-case scenario outcome of the promoter being removed from the business at some point in the future. The promoter’s experience, credit score, character and other subjective measurements of credit risk don’t provide this answer. Without this information the underwriter has to make a subjective decision and underwriters are not in the business of making subjective decisions. We make decisions based upon facts and evidence. If your plan does not include a description of your execution risk management program components of the business plan of operations, the regulatory risk management plan, management reporting plan, investment fraud mitigation plan, liquidity risk management plan and employee risk management plan, then be prepared for failure as the only outcome.
CRE bank financing business plans also have credibility and credibility only comes in the form of independent validation produced at arm’s-length. The INVIZEN approach is to provide arm’s-length credibility at each stage by completing an underwriting analysis and due diligence review that is incorporated into the business plan to demonstrate the potential for the business to actually be able to close on financing and be a supportable venture that is worthy of serious funding consideration. The practical outcome of this approach to the ultimate business plan is to provide third-party credibility in place of promoter representations that are never considered factual until proven later in underwriting. The INVIZEN approach is designed to shortcut this thinking and maximize the opportunity for the proposal to be put at the top of the stack for funding consideration. If you are seeking $7.5 million or more in capital financing, then you would probably be better served by talking to one of our consultants about using the INVIZEN approach to maximize your opportunity for funding on terms you can accept. Please call us today at 832.663.9634 for more information.