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Recession-Proof Business Planning

A strong economy can mask underlying problems at a small business. When the next recession hits — and historically speaking, it’s already overdue — will your business be healthy enough to not only survive, but possibly even thrive? It can be — but only if you have the right plan in place.

Be Ready When Opportunity Knocks
Every small-business owner says they want to grow their company. But how many are really prepared for the challenge?

Often, a vital step in growing your business is being able to raise cash quickly to capitalize on a sudden opportunity. Oddly enough, a recession can present some prime opportunities for growth, as some of your competitors might decide to sell off their assets at an attractive rate when faced with financial distress.

And the first step in raising cash is to have a lender-ready business plan.

SBA Loan Basics
Anytime you apply for an SBA loan, your package must include a business plan that meets the underwriter’s requirements. Those minimum requirements include 12 to 36 months of:

  • Profit-and-loss projections
  • Balance sheet projections
  • Cash flow projections

And that’s just the financial portion. You’ll also want to include an executive summary with notes on market size and demographics.

A word of warning: When writing a business plan or applying for a loan, it’s not a good idea to describe your potential market as “everyone.” That’s just a sign that you haven’t done your homework.

A dentist, for example, could reasonably argue that everyone in the world needs dental services. But the bank could just as reasonably counter that one dentist can’t possibly treat everyone in the world. So it comes down to the dentist defining the geographic area their practice will encompass, explaining why that area isn’t already saturated with dental-service providers and defining what sets the new practice apart. Continue reading here.

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