Published December 2001

Battles: Biz plan crucial
for financing, success

By Kimberly Hilden
Herald Business Journal Assistant Editor

As the economy continues to slow, area banks are seeing a variety of financing business come their way.

At Coastal Community Bank, for instance, requests for refinancing debt at lower rates have picked up in recent months, said Mark Duffy, Chief Credit Officer.

CityBank is “seeing a fair amount of demand for people that want to acquire a business,” Executive Vice President Jim Carroll said. “In fact, there seems to be some that think this is a pretty good time to do that.”

And over at Cascade Bank, there has been a “broad spectrum” of financing requests, said Dave Little, Executive Vice President of Business Banking. There are businesses that need working capital as customer orders are pushed back in the wake of the Sept. 11 terrorist attacks, and there are businesses that need working capital due to rapidly growing sales.

But no matter the financing needs, businesses that expect to get assistance must have a business plan — a financing proposal that includes a business descriptor, marketing plan and financial plan.

“That’s always critical for any loan at any time,” Little said. “The bank needs to know if I loan money, how do I get repaid.”

A business plan answers that question by requiring business owners to assess the market, consider financial opportunities and plan for financial challenges, said Ron Battles, Director of the Small Business Development Center in south Everett.

And because a business plan includes a company’s projections and a break-even analysis, there’s hard data regarding its ability to meet objectives, Battles said. On the other hand, a company that’s doing well but can’t prove its success was part of a plan also can’t prove its success wasn’t a fluke.

“I tell people, ‘If you want to look good, say you’re going to do something and do it,’ ” said Battles, whose SBDC offers nominally priced business development workshops and free follow-up counseling to help small businesses create their own business plans and grow.

Sometimes, obstacles such as an economic downturn get in the way of meeting business objectives. When that happens, a business plan provides early warning signals — and helps business owners anticipate their company’s future financial need, enabling them to seek financial assistance well before checks start to bounce, Battles said.

“If you ... tell a bank, ‘I’ve been doing my projection. I’m doing well, but in about four months, I’m going to have a little crunch here. Can you help me?’ Now you’ve just impressed the bank,” Battles said. “They say, ‘This person’s able to anticipate. That means they probably know what they’re doing.’ ”

But even when the unexpected happens, such as the Sept. 11 terrorist attacks and their economic impact, the business with a plan has options at the ready, Battles said, while the business without a plan is busy trying to come up with those options.

“In this climate now, when we have a lot of businesses downsizing, cutting back — what they’re doing primarily is following their business plans in terms of markets that are downsizing,” Battles said. “Because one of the things we always say is you will find no relief when pressure comes unless you plan to release it.”

“Timing is everything,” he said. “Start early; get your business plan going; get it completed; and then be willing to change it.”

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