Bank Manager's Top 2 Business Plan Failings

Will the lengthy and deep downturn trigger a long period of almost static economic performance or worse still, become a double-dip recession? This is a question taxing the financial press, yet many of the people I speak to, working in the field day-in, day-out, seem more optimistic.

One such chirpy soul is Ernest, Manager of business banking at a suburban branch of a multi-national bank. He informed me that his HQ had told him lending criteria would be relaxed during this year’s second quarter.

He then divulged that nearly all the business plans he receives are flawed. His observations were twofold.

1. They only tell me what money they can make, without saying how they’ll make it.
2. They’ve simply filled-in some web template, shrouding the real essence of the business.

These struck me as telling insight. When I delved a little deeper, on the first point details of how and when the bank would be repaid were always missing. And on the second, many of the plans he saw were ‘supported’ by dept-of-trade officially endorsed service providers, which he felt were taking the money and running. Their lack of real interest in the long-term success of the business always came through.