Katzenbar Limited

We are often asked “what is the difference between a Bankable Business Plan and other similar documents”: such as a bankable feasibility study, proposal, or a normal short business plan.

The main difference is probably the intent – a Bankable Business Plan (BBP) is a single unified document, de-risking the opportunity and aiming to persuade the reader that this business opportunity is a ‘sure thing’.
 

To do this the BBP needs to lead the reader through the opportunity and your proposed execution in quite some detail – see below.  (Rarely is a BBP less than 100 pages, and may be over 200).

A Bankable Business Plan is usually used for Loan Funding, especially if the loan is unsecured (other than by the business itself).  Thus, the financier’s main concerns are that the correct amount has been budgeted and that their money will be repaid timeously. 

The Funder will typically make a ‘go / no go’ decision purely upon reading the BBP and their Due Diligence; and will probably not take an active role in the company.
 

In comparison, if the financing is Equity based, the financier will share in your upside and is hoping for a significant Return On Investment (including selling their shares). 

Initially, this type of funding probably only needs a Pitch Deck or short business plan; thereafter the financier will engage in discussions with you.

As well as shares, the Investor will want regular feedback as to how their money is being spent.
 

Business Plans come in all shapes and sizes, but often the shortfalls to a Bankable Business Plan (BBP) are in the following areas (listed in descending importance).

• Executive Summary – This should be 1 page only and at the start of the document !

It should guide the reader through the document (with cross references) highlighting the most important points.  It must clearly state how much funding is required and the repayment.  The Executive Summary is the BBP’s ‘elevator pitch’..

• Financial Projections – Too often spreadsheets are simply pasted into the document with little or no explanation.  A BBP should have an explanation of each line in the spreadsheet, so that the Funder understands how the income is generated and how the money will be spent.

• Marketing Plan – This needs to be more than an ‘advertising budget’.  We recommend that the writer uses the 4 P’s tool to guide their explanation (Product, Price, Place, Promotion).  We also find the AIDA tool useful to help you structure Promotion i.e. your marketing /sales plan (Awareness, Interest, Desire, Action).
• Who – CV’s should be included for each of the Directors – these are a key part of the Due Diligence, thus should not be in the appendices !  

• Feasibility – Usually the Funder will not know the industry as well as you, possibly they will also not know the country/region.  It is therefore useful to ground the feasibility with an overview of these basics.
  The Feasibility should also include your key competitors and main suppliers (±1 page for each).

Motivation of Demand & Price may also be necessary..

We like to draw upon this information to start the Marketing Plan with a statement of the business opportunity.

Bottomline – the BBP is what you are promising, and the Funder will expect you to follow what is agreed in the BBP. 
You are also requesting a sizeable amount of money, it is therefore worth spending time and effort to get the BBP right – this is your future !!