Issue link: http://read.dmtmag.com/i/81015
MANAGEMENT that you have a blueprint for suc- cess and that you have exam- ined and planned for potential pitfalls along the way. This docu- ment should stand on its own and explain your business to your direct contact at the bank, and others involved in the decision process. Unfortunately, few small and medi- um-sized businesses have business plans on paper. Instead, their plans are frequently stored in the mind of the company's founder, owner or president. It is a good idea to take the plan out of that mind and put it on paper. Below are things that should be considered when devel- oping the written plan: An overview of the business A description of your product or service An analysis of the market you are in and how you plan to compete A description of the management team Financial projections to demon- strate your ability to repay the loan request Experienced management team As a senior vice president at Bank of the West, I like to say that we lend to leadership. This is true of most lenders. Bankers want to see a seasoned leadership team. Showcasing your expertise is essential. Lenders place a lot of weight on the experience of the senior team when making credit decisions. From a banker's perspec- tive, management's knowledge of an industry and a track record of success can help improve the chances of the business continu- ing to operate successfully in good times and during downturns. Bankers look for evidence that the company's leaders know how to steer the business through eco- nomic downturns and know how to react appropriately to increased competition. They want to know that the leaders can manage the business effectively and efficient- ly, and are quick to anticipate and react to changes in the market and economic conditions. SOLID FINANCIALS Bankers want to know that a business has a strong balance sheet and income statement along with a good operating history. Dem- onstrating adequate working capi- tal and liquidity to keep operations flowing is important. Next, a lender will want to see a good balance between debt and equity. In addition to the financial projec- tions in your business plan, lend- ers need to review your historical income statements for evidence of 66 VINEYARD & WINERY MANAGEMENT SEPT - OCT 2012 WWW.VWM-ONLINE.COM