Business Plan

Gnome on the loose

Hi all,

I am in the process of setting up a company and I am totally new to all the ins and outs of being my own boss.
I will be providing a service to customers who want something a little different in this type of business.

At the moment I am prepairing my business plan so as to go to the bank for a loan. I have looked into grants but nothing is available to me in this type of business. I need 80K for my business and I have 25-30K myself. All going well, I would hope to have made back all inputed money(plus more) in 3/4 years.
I'm stuck on how I would word this next piece in my plan of showing low risk:
(general idea)
All of my equipment for this business can be resold on in future if the business fails at a max loss of 40%.

Thanks,
GOTL

kennedmc

Gnome on the loose wrote: »

Hi all,

I am in the process of setting up a company and I am totally new to all the ins and outs of being my own boss.
I will be providing a service to customers who want something a little different in this type of business.

At the moment I am prepairing my business plan so as to go to the bank for a loan. I have looked into grants but nothing is available to me in this type of business. I need 80K for my business and I have 25-30K myself. All going well, I would hope to have made back all inputed money(plus more) in 3/4 years.
I'm stuck on how I would word this next piece in my plan of showing low risk:
(general idea)
All of my equipment for this business can be resold on in future if the business fails at a max loss of 40%.

Thanks,
GOTL

How about something like "Business equipment will depreciate at a maximum of 40% over (the specified time period)"

Of course there is actually two elements to the risk. Regardless of how much it depreciates can you guarantee it will be actually sold in the current / future market? Also the payback period looks too long and ROI too low considering, you have capital, interest, operating exp and salary.

I'm no expert but it may be worth running your figures by an accountant or somebody with a good handle on them so they can prepare you for the bank manager - good luck!!

Admor Tony

Gnome on the loose wrote: »

Hi all,

I am in the process of setting up a company and I am totally new to all the ins and outs of being my own boss.
I will be providing a service to customers who want something a little different in this type of business.

At the moment I am prepairing my business plan so as to go to the bank for a loan. I have looked into grants but nothing is available to me in this type of business. I need 80K for my business and I have 25-30K myself. All going well, I would hope to have made back all inputed money(plus more) in 3/4 years.
I'm stuck on how I would word this next piece in my plan of showing low risk:
(general idea)
All of my equipment for this business can be resold on in future if the business fails at a max loss of 40%.

Thanks,
GOTL

It is difficult to comment fully without knowing anything about your service / plan:

1. Banks look for the business to repay from trading, what the risks are that this may not happen and how the owner believes he / she has covered off these risks. They look for something more than a forced sale of fixed assets to mitigate / reduce the risk.
2. Banks do their own calculation of break up values and while 40% on equipment is not far away, they see this as obviously a last resort.

If you feel you have covered everything above off adequately and are determined to include something here, you could say:

'The value of the business assets in a forced sale situation would be....'

Then make sure you list all the assets and provide clear evidence as to why they will realise the figures you have proposed.

Finally, I agree with Kennedmc and strongly encourage you to show your Plan to someone who knows about Business Plans & Banks and that may or may not be your accountant.