Help Me With Sign Maine Banking Business Plan Template

Help me with industry sign banking maine business plan template

the financial section of any business plan is by far the most complex section of all the business plans in fact the financial section is so complex I'm not going to be able to really dive into the financial section in great lengths in this video so if you need help with the financial section please please reach out to one of our certified business advisors for help the financial section typically includes a source and use otherwise known as a startup cost income statement also known as a profit and loss cash flow statement balance sheet and typically some kind of break-even analysis or ratios the source and use statement which we'll start with is basically the amount of money you're going to need to either start up the business or to continue the business - for equipment or operations for expansion and it's breaking up broken up into two sections one what are you gonna use the money for so what are the uses and two where is the money coming from remember each one of your financial statements should have some kind of notes denoting where exactly these this information is coming from and these notes can refer to either the appendix or to another section of the business plan but you're trying to help the reader understand where you're getting these numbers and remember the use section must equal the source section right so the amount of money you're asking for must equal the amount of money that you're going to be getting now oftentimes when I'm talking to a business the owner cash is an important part of talking about the business because most lenders or investors are going to want to see that you have put some kind of money or some kind of skin in the game is what they call it right so you have something to lose if you were to go to a lender and say hey I need a hundred percent financing more than likely you're not going to get it because what you're be asking them or what they hear is hey I need you to take all the risk and me to take none of the risk right so when we're looking at the sources one of those sources should be yourself depending on how risky your business might be that can be anywhere from 10 percent up to 30 percent or more 10 percent being less risky the higher percentages being more risk so for instance if I were starting a dentist office it might be a 10% down whereas if I were starting a restaurant in the Portland area it might be more like 30 percent down now the bank is also going to be asking you for your credit so understand what your credit score is before you go to the bank because they're gonna look at your credit they're going to look at how much money you put down which we often call your capital they're also going to be looking at this news section as what collateral is in the deal right so the collateral again is something the bank can take if the deal were to go south if you were to stop paying on your loan this is what the money went for so the bank could take it back and then try to resell it and oftentimes when we look at a deal we want to make sure the bank has enough collateral in the deal that they're comfortable making that loan if there isn't enough collateral in the deal then we're going to think about another source of collateral right is this collateral you're going to bring in from from outside so you may be of equity and another property or an investment account or perhaps you could get a guarantor on the loan someone who would essentially co-sign the loan for you another option but this is the bank's option is whether they put some kind of government guarantee on the loan SBA Fame or USDA guarantee but that is a call that the bank makes so what you're trying to do is you're trying to put forward what you need to start the business just to open the doors because that will then tie into the next section which is okay I opened the doors how much money is it going to take just to keep the doors open and in this section what we do is we try to put our best foot forward so we start with the revenue and just like this the products and service section you're gonna start with your your money maker first and then go through the auxilary services that you might offer or products so you start with your revenue up top and then you have your expenses down bottom and then you're hoping that the pre net profit that pre-tax profit that you're going to make is is going to be positive right now a lot of businesses get worried because the first few months like you can see in this example the first few months are negative negative is when you see those there was parentheses on the other side well when you're first starting a business there's a good chance you're going to be negative for a little bit and then and then go positive after a while that's that's okay that means that you just need to make sure you asked for some working capital working capital is any cash excess so any cash that you need in the bank to make sure that you're able to pay your expenses as you go so in this case we know hey maybe we need to ask for some working capital with the loan and again look at the bottom where you see the assumptions it's always important that when the when you get someone looking at your financials that they they understand where these numbers are coming from and that's what these notes these assumptions are doing they're explaining the numbers up top they're saying hey this is how I'm getting sales or whatnot if you want more information perhaps you can go to a different section but we're trying to keep the reader as much as possible on this page we don't want them putting it down for later we don't want them going away from this page we want to make sure they can get all the information they need on this page now when we talk about cash you need so working capital that's where the cash flow statement comes in right so the previous statement the income statement we're showing how well your business was working so if you think about it like a car the income statement or the profit loss statement they're both the same thing that's kind of telling you this is the miles per gallon I'm getting for my car right so I can understand how efficient my car is I'm using gas gas is cash in the cash flow statement this is telling you well how much gas is in my gas tank all right because if my gas tank goes empty I don't care how efficient my business was I'm I'm not going anywhere I don't care how many miles per gallon my car god if there's no gas in my car there's no cash in my bank account I'm not going anywhere because I can't pay my bills so that's why again we're going to look at the bottom in this case we have working capital put into a loan so we don't go negative on the bottom right and we have some padding just in case there's an unexpected constant that we have some pudding built in there but what we did is we asked for the working capital to make sure this wasn't negative before when we're working with spdc to try to create this model we'll see a negative right because in the beginning we're actually losing money until we get up and running yet they're clients that we we want for the products and services right because you know it takes a while to build a business so here we worked with this video to try to figure out how much working capital do we need to make sure that isn't negative because the worst thing you can do as a business it's run out of cash and you go back to your lender a month or two later saying I can't make payroll I really need a loan well how much confidence is that lender or that investor have and your ability to run that business now and they might say no and and you're sunk so you want to make sure you're projecting and asking for the cash right up front so you know you're not going to go negative and that's why understanding the numbers is so important because if you overinflate your numbers and try to make it look like you're gonna do better you're just hurting yourself because now you're not going to know that you need more cash right most businesses fail not because they're not profitable they fail because they run out catch and that leads to all sorts of problems oh okay I need to cut people's hours or people quit or need to discount my product and get more cash in the door it's just a vicious cycle that leads leads down now the other statement that typical bank would want is a balance sheet now the previous statements were we're looking at the first year broken down by month this statement the balance sheet is a set period of time it's a snapshot it's on this day and this day happens to be on the closing day of the loan so when I got this loan this is what my asses looked like and this is what my liabilities look like now for a start-up business this isn't it's an important piece but it isn't going to tell the bank very much because your debt is going to be so high typically compared to your assets right if you're an existing business this becomes much more relevant because now your assets and your liabilities should even out a little bit but again the Small Business Development Center can help you put this together and the last thing we're looking at is that break-even analysis and or ratios right the braking of analysis is good just to understand okay what is the minimum amount of sales I need for my products or services just to pay the bills right so yes I'm projecting up here I'm hoping I'm going to get this but let's bring it down to the real world I need to do at least this to make sure I pay my bills because that way you know the lender or the investor can understand oh okay I know how much you need to do now okay I'm gonna try to ascertain if that number is believable and if your projections are believable and more than likely my number in my head is gonna come up between those two but as long as it's above that break-even it might be below your projections but if it's a bone that breakeven for what they feel you're more likely to find them receptive to giving you that loan right and then of course you're gonna ratios down below any lender investor is going to try to figure out what are your projections saying that you're going to do and then what is your industry average right so if I am in in a retail market in my typical gross profit is razor thin it's 1 1 to 3 percent if I write a business plan and my financials are saying that I'm going to make 8 percent profit well why is it that I'm going to make so much more profit compared to my industry or vice versa if I'm saying I'm only make 3 percent in my industry averages 8 percent profit well why is it that I'm not as profitable as the average of my industry right this is the industry average really lets you understand you know do I need to explain my numbers a little more or are my numbers off a little bit right this is your your check up why are my numbers different than the average and it could be different and there could be a perfectly valid reason for it but this is your chance to explain that reason why would it be different than the average so again the financial section is much more complex than I could possibly do in a video and I strongly urge you to see one of our certified business advisors we have locations throughout the state to try to help you do these financials I am going to try to come up with different videos that break down the financials one by one but for for this video that's all I got