Make it Happen: Get Around to Your Business Plan & Financial Statements

Dec 15, 2021

Be ready to apply when opportunities come up! Prepare your financial statements and business plans today to set your small business up for success in the long term.

Lendistry CEO, Everett K. Sands, has given a lot of advice to business owners over the years, but the most basic step is often the hardest for small business owners to begin. As he came up in the financial world, Sands spent five years as an underwriter and often shares a hard truth that people at the larger banks don’t say to potential borrowers.

A Solid Financial Statement is a Deal Maker and Deal Breaker

For example, let’s look at it from a lender’s perspective. Let’s say you applied for round one of PPP or another form of financing and you didn’t make it because your financial statements weren’t together. Then another opportunity came along, and you didn’t make it because your financial statements weren’t together. The truth is, no reputable lender is going to lend money to you if you haven’t got it figured out yet.

We all get that you may not understand it on day one, but if you haven’t made the effort to get it done, no lender will consider you a viable borrower. The basic small business financial statements include:

  • Balance sheets – Show the details of your business’s assets, liabilities and shareholders’ equity
  • Income statements – How much revenue your business earned over a period of time, and the costs and expenses it accrued to earn that revenue
  • Cash flow statements – Your business’s inflows and outflows of cash. This report is important because you need to show you have enough cash on hand to pay expenses. 
  • Tax returns for two or more years

Developing a solid, detailed financial plan and keeping it constantly, obsessively updated gives you a dynamic understanding of your business and convinces banks and investors that you’re a good investment. 

This advice applies to all loan and grant programs. You have to have your financial statements and business plans ready and know them inside and out so you can take advantage of every opportunity that arises. Consider hiring a CPA or accountant to help you prepare and maintain your financial statements.

Business Plans Show You Mean Business

If you present a possible lender or investor with a business plan that you’ve invested time and care into preparing, you will be more likely to get approved. Financial statements are part of your business plan, but it also shows your history, your plans, and the data your plans are based on.

Core elements of a business plan include:

  • Executive summary – Who is involved in running your small business, and what are their qualifications?
  • Your small business’s products and services
  • Your small business budget
  • Your marketing strategy and analysis

We recommend you have a detailed, in-depth version of your business plan and a lean version that gives a high-level view of your business plan. It’s standard practice to update your business plan every two years, but you should update it more often if your business has a faster growth model, or after any major changes.

The last thing you want to do is have to update it in a hurry to meet an unexpected deadline.

Get started on a business plan using a template. This will save you from the stress of making your business plan visually pleasant if design is not your strength.

Get Help with Your Business Plan & Financial Statements

Lendistry’s non-profit partner, The Center, offers online business classes and webinars and conducts one-on-one business advising for small business owners who need help pivoting their businesses and navigating the process of applying for grants and loans.

The Center’s training takes business owners through financial statements line-by-line. If you have not yet taken the time to hit the books or seek out ways to pivot, reach out today.