Talk to current financiers beforeyou get into difficulties. Otherwise you devalue future forecasts

When is the worst time to talk to your bank manager? When you are already in the crisis and you haven’t provided any warnings.

It comes back to the confidence factor in management. If the bank thinks you don’t have financial control and you don’t know what is likely to happen, you can expect to have a tough time.

If you have a term loan or overdraft be aware of any covenants and constantly monitor how close you are to breaching them

Covenants are the rules that the banks attach to bank borrowings and are based on a series of controlling financial ratios based on interest cover (profit divided by interest cost), gearing (borrowings divided by shareholders funds) and similar ratios.

If you just have an overdraft limit, I find it useful to monitor the best, worst and average overdrafts each month because troubled companies will see the numbers all edge closer towards the overdraft limit.

Your bank manager is looking at this type of statistic and you don’t want him or her to know more about your borrowing trends than you do.

What’s In the Business Plan Free Report?

This 17 page report is packed with information:

* 8 reasons for preparing a business plan

* 5 factors for a success plan

* 11 questions to ask and answer when preparing your business plan

* Why your bank manager wants to check your PARTS

* A template for assessing the knowledge and skills you need for business success

* 9 questions to ask about your strategy

* The importance of customer demographics and market segmentation

* A guide to helping you to find your niche

* Positioning price v quality

* 10 questions to ask about your marketing strategy

* Are you in the right business sector? This is a critical issue if you are just starting your business and the business plan report helps you to assess your business risk across seven industry characteristics and seven internal factors.

* Checklist to make sure your plan is up to scratch for the bank manager