Maria Coyne, Executive Vice President National Sales Executive SBA & Key4Women KeyBank National Association

Do you have a five-year business plan?

For your own sake, and for the bank’s sake, your answer should be “yes.” Banks will want to see your plan to ensure that you’ve thought through the potential risks and opportunities ahead. It should include sales forecasts, repayment ability, and cash flow projections. If you’ve been in business for a while, they’re going to want to see a history of your performance. Not only can a detailed business plan help you organize your business, understand your competition, and focus your efforts on appropriate markets, it also can mean the difference between being accepted for a loan and being rejected.

What steps do you need to take to achieve your five-year business plan?

When applying for a loan, you should be prepared to explain how the capital you’re seeking will impact your business. Will it boost sales? Will it help you expand to new markets? Will it help you modernize facilities or technology that will make you more competitive? If you’re going to use it to hire more employees, how much will your sales need to increase to justify the new employees’ salaries? Show cause and effect as much as you can.

How do (or will) you stack up against your competitors?

You must demonstrate to a bank that you understand your industry and competition, as well as the overall market size and trends within it. You should be able to profile competitors and the marketplace to show that you understand who else is selling similar products and services and where the holes are in their approach that will allow you to make inroads. This will give the bank a feel for whether there is room for another player in your market and whether your strategy fills a niche.

What makes you distinctive in the marketplace?

Here, the bank is asking you to provide a product analysis that details how your product or service differs from what is already in the marketplace. You should describe specifically the resources, raw materials, and skills you will need to deliver your product or service. You also should describe the types of facilities you’ll need, their locations, and their operating costs, as well as the rationale for your choices. Explain in detail your strategy for gaining profitable market share, including how you will price, sell, distribute, and promote your product or service. Provide a detailed month-by-month sales forecast for the first year and a more general projection for the next two to three years.

Can you describe the depth of your management team, as well as your management succession plan?

It’s important to show that you have access to a group of advisors, such as business and financial experts, who offer you sound advice when you need it. The ability to tap into these resources may be critical to the success of a small business. Do the advisors to whom you regularly turn (e.g., your banker, CPA, and attorney) provide you with the information or networking opportunities you need? If you answer “no,” you are not taking full advantage of the resources available to you. Advisors are an integral part of your business when something happens unexpectedly. The bank also will be interested in their backgrounds and in your management team and staffing plans.

In summary, remember when you apply for a business loan that the spotlight is on. Whether you shine or crack under the scrutiny will depend upon how well prepared you are.

Your banker is making a long-term investment in you, and it’s important to present a convincing case that you are prepared to make your business work. If you convince your banker of that, you’re likely to be on your way to owning, running and growing your own business.

To locate a Key4Women Relationship Manager in your area or find out more about the Key4Women program, please go to www.key.com/women.