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business plan?

Discussion in 'Lawn Mowing' started by bobbygedd, Feb 25, 2003.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    we are applying for a business loan to upgrade our equipment and grow our business. one of the things they want is a "business plan".can someone tell me what is meant by this?
  2. I've had the misfortune of writing two of them, but they were for other industries. TOLD MYSELF, I'D NEVER DO THAT AGAIN!!! If you cover everything, and worked on it full time, it could take as long as a full week for this type of business (which is very short). Many people in other types of businesses spend months of work getting all the information together. You might be able to find some examples of business plans for lawn-care here or elsewhere on the net.

    Basically, they're used by lenders to get a hard look at you and your business and to see how serious you are about borrowing money. You'll have to give a no-nonsense account (soup to nutz) of where you are, and plan to be. Most of your work to make a business plan is wasted, but you never know who's going to want to see what. I know for a fact, that the very people you write them for will never read them. They just look at the "Executive Summary" and go to the main text for answers as needed. So the documentation has to be complete and accurate. The main thing is showing your ability to get a handle on your operation and express that to financial decision makers.

    If I had to do it over again, I'd ask whoever wants to see one, what they'd are looking for, so you don't waste weeks of time. Additionally, there are books you can get to help you. They'll give you a good outline of all the topics you need to cover. One good thing, if you do it right, you'll see your business in a whole new light. Many people who go through the trouble of writing good business plan find that there are better ways to get where they want to go, than borrowing the money. Which is probably one of the points of a business plan that lenders like. So the lender may be trying to weed you out of the loan process just by asking you to get one.
  3. I can't help but think I over-simplified "soup to nutz."

    It means EVERYTHING! And not just quantitative answers, but hard data. Your financial records for the last few years, how do you keep your financial records, accounting for your assets and liabilities, your business history and experience, how you manage your current level of business, advertising, how you plan to grow, what your plans are if you don't grow as you plan (up or down), what your plans are if you get another drought, what your plans are if you get weeks of rain, what if you get sick or injured, what if your truck breaks down, or your mower, or your dealer goes out of business and can't repair your breakdowns, what if there's a major blow to the economy, are you tied down to any large accounts, and what if you lose them, ... on and on and on ...

    One good thing, nobody expects you to have all the answers. They just want you to think about it and have reasonable plans. If you know how to use a spread-sheet software package, you can do one complete plan, then modify it for all the "contingencies." But that's why it takes so freaking long. And that's why most people don't complete business plans. Which is why banks ask for them. So it looks better if you have a business plan in hand when you first talk to a loan officer.
  4. Phishook

    Phishook LawnSite Bronze Member
    Posts: 1,143

    They'll want to know where the money is going to go that they are lending you. If you are upgrading from belt to hydro, or 50" to 60", show them the productivity numbers.

    I was asked to put one together 5yrs ago when I started, and a couple yrs after that when upgrading to a 60" Chariot. The first time they checked that I was going to be able to make enough to pay them back, and the usual credit check. The second, I don't even think they looked at anything I had prepared.
  5. Organix

    Organix LawnSite Member
    Posts: 113


    You should check with your SBA, they probably have workshops they also help with lending programs if you have not checked into that. I really don't know the pros and cons yet. I am thinking of doing that myself. One program they have is lending in designated areas. Usually metro areas. If you live in one of those areas you may find it easier to get financed. Dunno about comparable rates.

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