How do I write a company profile for bank loans, as well as a business plan and a corresponding financial plan? That is a frequently asked question from companies that need financing from an external party to start a business, grow it further, or restart it. Whether you want to submit a financing application to a bank or an investor: a well-written corporate profile, business plan, and financial plan is crucial for the success of the financing application.
But how do you write a good company profile for bank loans and ensure that your financing application is a win? This article will take you from A to Z in writing a company profile and financial plan so that you can effortlessly roll through that financing application.
Are you ready?
What is a company profile?
It’s all in the name: a company profile is a detailed business plan about your company and answers the questions: who are you as an entrepreneur? What do you do – for whom, why, and how? A company profile for bank loans is also sometimes called a business plan or financial plan. But it is all the same. You prepare a company profile for bank loans or a business plan for banks to examine whether your business idea is realistic and feasible. Showing a gap in the market or just being unique is often not enough. How will you turn your idea into a profitable business?
When do you write a business plan or company profile for bank loans?
It is always a good idea to prepare a company profile. Even if you do not need a business plan or a company profile for bank loans or external financing party. Having a company profile ready 24/7 is a valuable tip. But, wouldn’t you also like to know whether your plan is feasible? And that it makes sense before you jump in at the deep end?
When you write a business plan for yourself, you can, of course, write it on the back of a beer mat. But what is also possible: write it precisely on an A3 sheet on your office wall so that you visualize and achieve your goals earlier.
However, writing a business plan for an investor is a different story. The business plan must be structured, consistent. Also, the financial plan must connect seamlessly with your business plan. Because before the investor wants to invest money in your company, you need to convince them 100%. And you should include your piece of conviction and the feasibility check in a compelling company profile or business plan.
What does a business plan or company profile for bank loans consist of?
There is no fixed format for writing your business plan or company profile for bank loans. There are, however, several components that appear in every good business plan. We want to share this with you:
1. The Summary of a business plan for bank loans
Most people often forget the summary in a business plan, but it is imperative. Because honestly, the average attention span of a person is between 15 and 45 minutes. So you want the investors to focus on reading your business plan entirely. So that they are immediately captivated by your idea and think: ‘This sounds good! I want to know more about this!” And now you have convinced them.
“You never get a second chance to leave a good first impression.”
2. The Entrepreneur(s) / Founders:
Who are you? What are the personal motives for starting or expanding the business? What are your qualities? Mention relevant studies and work experiences and discuss your ambitions. Also, don’t be afraid to point out the weaknesses and refute them.
An example of naming and refuting your weakness in your business plan: ‘My weakness is my knowledge of numbers. To make up for my lack of organizational knowledge, I am currently working with an optimally-designed accounting program, and an accountant helps me with tax and financial advice.’
Tip: Take a personality test
Do you find it challenging to map out your weaknesses and strengths? Ask a (former) colleague or do an online (free) personality test such as the Myers & Briggs test.
And it is also important: what will your company look like in 5 or 10 years? Is this financial application a stepping stone for further growth? You may find investors’ scary’, but remember: they are also just people and prefer to buy from a person (or, in this case, invest).
3. The Company
In the section ‘The company,’ you will go deeper into the company itself. This part contains the ‘hard’ company data such as The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia, abbreviated SSM) number, legal form, VAT number, insurance, etc., but indeed also the business idea. For example, what problem do you discover with your target group, and what result will you offer them? Which solution does your company offer to help your ideal customer? What steps have you already taken towards designing your product or service? This is important to mention in your business plan and financing plan because this ensures the investor’s confidence in your company.
4. The Market & Competitors
a. Map the market
Now that you have clearly explained what kind of product or service you will offer, you can delve deeper into the market in which you operate your company. You map the market and describe your sales market. Is your sales market mainly local, national or international? Do you sell to a specific market segment, such as women with small children or men in a midlife crisis? Map this out as clearly as possible in your business plan: what is your target group? And how are you going to reach them?
To realistically and adequately visualize your market, there are a few models and sources that you can use:
- Describe the trends in the market using external sources such as Statista or the Department of Statistics Malaysia (DOSM). You can also find a lot of specific industry information in Malaysia on Economy Watch.
- Conduct your research in your market (with a larger company, which is often an outstanding assignment for an intern) and substantiate the market needs. Conducting your research is significantly often used for more innovative products for which less data is available.
b. Describe the competition
You would probably say, “My product is so unique and has (almost) no competitors.”
Are you sure? Almost every company has competitors, or there are similar businesses. That is not a bad thing at all. However, it is powerful to recognize competitors and highlight what distinguishes you from these competitors. Then, approach them slightly differently. Every good business plan, therefore, contains a competition analysis. In a competitive analysis, you list all the key competitors. Then, you argue why your company is different and will provide added value in the market.
c. Connecting everything: the company and products/services in the market
Connect all the dots and come up with a conclusion. Now that you have written out your company, development, and market demand (including competitors), you would do well to summarize everything in a SWOT analysis.
You can use all aspects you have described so far in a SWOT analysis; you now put them together in an overview and categorize those points you have found.
SWOT analysis stands for Strengths (strengths), Weaknesses (weaknesses), Opportunities (opportunities), and Threats (threats).
Here is an example of a SWOT analysis for a restaurant business plan for bank loans and investment proposals:
– Strengths: A fantastic location near a fresh produce provider where we buy fresh products.
– Weaknesses: The location has a small kitchen, and therefore not all cooking processes can be set up efficiently.
– Opportunities: The location is increasingly being discovered by tourists and day-trippers, making it increasingly crowded.
– Threats: Because the place has become more popular, many other catering entrepreneurs are also opening up their businesses here. Besides, the personnel costs of catering staff are becoming more and more expensive (shortage on the market).
This example elaborates one point in the SWOT analysis, while you usually work out 3 to 6 points in a SWOT analysis.
5. Marketing plan of your company profile for bank loans
In the earlier parts of the business plan, you discussed your company and product and the market. But how are you going to market your product or service and ensure that you will sell your product?
It is practical and confusing to describe your marketing plan based on the 6 Ps. Perhaps you know the models of the 4 Ps or the 5 Ps? The P for Personnel and the P for Presentation are not always in every model.
a. Product/service:
Provide a detailed description of your product and service. For example, do you have only one product? Or are you going to put several products (s) on the market? What are the distinguishing features?
Tip: If you are making a physical product and already have a prototype, please include a photo.
b. Price:
Essential questions to ask yourself when determining the price are:
– What is the cost, and what is the profit margin (selling price concerning the cost price)?
– Does my price match my product and target group? Please note: you can ask your potential customers what they think is a suitable price. But be aware that these customers will probably set the price a little lower. Who wants to pay more?
– Compare your selling price to the competitor analysis. Is it a standard price in the market?
– Does your price match your sales segment? If you focus on an easy entry-level product, make sure that your product is affordable for your target group.
c. Place:
In the world of the marketing mix, ‘place’ actually means distribution channels. So how and where will you sell your product? Are you going to do this in a physical store or through online channels, such as an online store?
The Golden Tip: Ensure consistency between the distribution channel and your target audience. For example, suppose your products are very luxurious and exclusive design bags. In that case, it is more convenient to open this store in Mont Kiara, Kuala Lumpur, than in a neighborhood with a lower than average income.
d. Promotion:
A great product is nothing without reaching your potential customers. So how will you work on the visibility of your product or service? Think of online promotion via social media (Facebook, Instagram, Pinterest, and advertisements) or offline advertising at events and flyers. Or do you already have specific channels that you can use?
The most important thing is that your promotion plan is in line with your target audience. If your product meets the needs of the busy businessman, go and distribute flyers in, for example, KL Sentral. If your product is ideal for local mothers, check out the schoolyards in your area. As you can see, there are so many options.
e. Presentation:
Sounds logical, but the Presentation reflects how you present your product. This is especially evident for products on the (retail) shelf. The very first thing you see is the packaging. But it is also relevant for other products or services. Think of the graphic design of your website or, for example, the use of video content. Visualize your plan.
6. The financial plan in a company profile for bank loans
Although the financial plan is often treated last in the entire business plan, the financial section is the most important. How do we know this? After writing many business plans and company profiles for bank loans, we know what lenders and investors focus on; what questions they will ask.
It makes sense: the investors provide money, so they want to know how your business will spend that money; whether the plans are financially feasible. The investor wants to know whether your business will be profitable. Logically, the investor wants to understand how your company will recoup or repay the invested money.
We will show you how to make a financial plan through the steps below:
The components of a financial plan along with your business plan for bank loans:
A good financial plan consists of several parts. Most financial plans consist of:
a. Description of the revenue model
b. Investment budget
c. Financing Budget
c. Operating budget
d. Liquidity Budget
e. Figures from the past year
a. Description of the revenue model
The financial plan shall start with basic information. What is your revenue model? How many products or services do you need to sell to achieve your target turnover and cover your costs? What is the timeline?
Better, you can even go a step further than everyone else by showing investors or lenders the following information: What price? What is your margin (the profit percentage) per product? How many products/services do you have to sell to cover your operational costs in addition to your production costs?
For example, if you are selling gift boxes and assume that you will sell 10,000 packages per year. You will then have to check whether you have the production capacity and sales capacity for this figure. Make sure the number that you provide matches.
b. Investment budget
An investment budget shows what the investment needs are before you can start. What should you invest in? And what do you need to get started at all? Think of the inventory and the furnishings. For example, if you are going to open a catering facility or a shop. Or is an initial stock required or an investment in a production machine?
In addition to these direct investments, you should include the needed working capital in the investment budget for the start-up phase. You use this working capital, among other things, to pay suppliers and replenish stocks – if the turnover is still in the ‘start-up phase’ without sufficient buffer.
c. Financing Budget
You draw up a financing budget in line with the investment budget in your company profile for bank loans. Based on the investment budget, you now know how much you need to get started. But how are you going to get this amount? Of course, you wish to obtain this amount partially from your investor(s).
However, you can also get this your initial investment capital from your savings and take out loans from banks and relevant lenders.
The total equity, loans from another party, and credits you request from the bank or the investor must correspond to the sum of the investment budget. If your financing budget comes out at a higher amount, the question remains: ‘What do you need that money for?’
If the investment budget amounts to more than the financing budget, the question remains: ‘If you cannot afford all your initial investments, how are you going to make sure that you get off to a flying start?
d. Operating budget
In the operating budget, you calculate turnover, costs, and profit for the coming years. A little extra technical jargon: this operating budget is also called overhead. You draw up the operating budget based on your revenue model. What turnover (the number of sales times your selling price) do you expect? What will your direct costs be? Direct costs are directly related to your product, such as the production costs (if you make a product) or the purchasing costs.
In addition, you determine the indirect costs, also called operational costs. These costs are not 1-to-1 associated with the product; but are necessary to run your business.
Examples of this are the rent of your office or shop, insurance, administration costs, marketing and sales costs (packaging material, web hosting, advertising budget, etc.)
The division between direct and indirect costs differs significantly per sector and type of company. It is good to include as many official files as possible to explain the expenses – such as rental contracts, quotations from marketing campaigns, insurance policies, and many others.
Tip: do not forget to include the interest costs (because borrowing money costs money) and the tax you expect to pay. The amount of tax you can expect depends on the legal structure of your company (sole proprietorship, limited company, or joint venture) and the expected amount of profit.
You often need to show an operating budget of at least three years, but some banks or investors may ask for five years.
Tip: Of course, we believe that you are one of those ambitious entrepreneurs who immediately start hustling. However, it is more realistic your business turnover shows an upward trend over the years; instead of a quick spike. Keep this in mind when drawing up the operating budget.
e. Liquidity Budget
The liquidity budget is, logically also called, a budget of liquidity. Liquidity is all the money you expect to come in and out. Contrary to the other budgets, you always prepare this budget per month.
It would help if you started with the bank balance you have. Then you check what you expect to receive. You also immediately take the expected money from the financing application with you. You always draw up a liquidity budget per month and often for a year.
Tip 1: Do not forget to include the VAT in the liquidity budget that you initially invoice and have to pay – which you will eventually receive back.
Tip 2: In the liquidity budget, you also include the private withdrawals. So, how much do you pay yourself from your business? The investor is likely to question if this amount is meager. If you think it’s realistic, make a personal budget and show that you have another source of income (or a partner with a total income that you can get by).
f. Figures from recent years
Suppose you already have an ongoing business and you want an additional investment for an expansion or a business takeover. In that case, the investor wants to know the current (financial) performance of your company. Think of the annual accounts of recent years (including the profit and loss account and the balance sheet) and your tax returns of recent years.
If you are a larger company and have already prepared a mandatory forecast, it is powerful to compare this forecast with reality and add it. This also applies if you have voluntarily done this for a previous investor. What better evidence to show your financial judgment?
Please note: the above components are the standard components that appear in most financing plans. Depending on the application, banks may request the type of investor and your company, additional forecasts, and feasibility analysis.
So, how do you ensure that your financial plan is crystal clear?
The answer to this is concise: be realistic and substantiate your plan well. The most important thing is that you understand the numbers in your financial plan and structure. So do not randomly set goals and mention amounts, but substantiate the quantities stated based on, for example, offers and contracts. Hence, investors’ most frequently asked question: ‘How did you arrive at these amounts? And on what basis did you come up with these amounts?
How much can you finance your business?
How much you can finance for your business naturally depends on your company, plan, and application. What does your financial plan need to be a success? Furthermore, the size of the financing also depends on where you apply for it. Is it a business credit with a bank, a micro-credit, an SME fair, or perhaps a crowdfunding campaign?
The golden tips for a good business plan/company profile AND financial plan.
Okay, great – if you are reading this, you have already worked through many concrete tools for writing a financial plan and a business plan for bank loans and investment projects. However, we want to make sure that you will rock that plan and that financing application. We will share a few more Golden tips with you. Let’s go.
TIP 1: First, the big picture
Take a step back before diving into the details. Take out a paper and pen, and answer the following questions:
– Who are my products or services for?
– How and through which channels will I market my product?
– Global overview of the market: which players are already in the market?
– What is my revenue model?
– How much do I have to sell to make a profit?
– How much do I need to invest in getting started?
TIP 2: Focus on the core
A business plan can become a life’s work. This makes sense. Because once you start writing and building your own business in detail, you will most probably be entirely enthusiastic about it. You will work out marketing plans and work out that promotion strategy!
But before you lose yourself in all the details, it is essential to have a higher goal: to have the financing application clear. What information is necessary NOW for lenders and investors? What information can you further elaborate on moving forward? The best business plans are concise and transparent with all the vital information the investor needs—no confusing details.
TIP 3: Summarize and repeat
Even if you continue to focus on the core, business plans and financial plans can be pretty extensive. Therefore, to keep the overview and to be able to steer the reader in the right direction, here’s what you can do: write a summary/conclusion after each chapter with key points.
TIP 4: Be industry-specific
Every business plan or company profile is unique. For a higher likelihood of success, the plan must highlight the characteristics of the industry and associated risks and opportunities.
By weaving these industry-specific characteristics into your business plan, you show that you are the expert and know what you are talking about. This is also good preparation for the questions that investors or lenders are likely to ask you.
TIP 5: Make your plan dynamic and interesting
‘A picture paints a thousand words.’ So add relevant photos to your plan to make it more alive. For example, if you are designing a product and already have a prototype – add a photo!
TIP 6: Don’t hide from risks and pain points
Know your weaknesses and write a better plan. Every company has risks because: ‘no guts, no glory!’ Do not try to hide all risks associated with your company and industry. Acknowledge your weaknesses and argue how you are going to tackle them. The same applies to your characteristics as an entrepreneur. Are you not so numerical, but do you have a great plan? Play an open card and indicate that you will overcome this by engaging in solid financial advice.
TIP 7: Have your plan reviewed or enlist the help of an expert
We can be clear about one point: that financing application simply has to be a success. Because you often only get one chance to strive, you just want that plan to work out effectively.
Have your plan reviewed by a financial expert and have them look at reasonableness, feasibility, and consistency. The financial expert can ask you questions that investors would also ask. With that, you can come prepared. But not only a financial expert is valuable; you should also have a professional proofreader or company profile writer to check your plan for grammatical errors.
Are you looking for help writing a financial plan or company profile for bank loans and business proposals?
Word Philocaly is a professional B2B copywriting company in Malaysia specializing in writing company profiles, business plans, and business proposals. We are happy to help you write a business plan in Malaysia concerning financing applications and investment projects.
How can we help you then?
– Writing your business plan based on a detailed questionnaire
– Drawing up your financial plan, including forecast, investment budget, liquidity budget, and operating budget
– Providing handy templates and checklists to write your business plan or company profile
– Testing the reasonableness, feasibility, internal consistency, and completeness of the financial plan
– Preparing for the interview questions and answers to deal with investors and lenders. What are the most common questions investors ask, and how do you answer them?
Our team of professional copywriters in Malaysia knows how precious your time is as a business owner. This is why we have helped many entrepreneurs create an outstanding, investor-ready business plan / company profile for bank loans and many other investment projects. Let us jump-start your business off on the right track – get in touch TODAY!
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