BY TOL BROOME JR.

One of the first things your banker will ask for is a business plan. Here are 10 key components that should help you win your banker's confidence:

I. The Executive Summary is used to "hit the high spots" of the proposed business. Limit it to no more than two pages.

II. General Background of the Business. This section is used to provide a brief history of the company, as well as information on what differentiates your venture from competitors. If your business is a startup, provide a narrative on how your idea came about and why you think it will succeed.

III. Management. This is the section in which you have the opportunity to "toot your own horn." Include resumes on all key people in your organization and focus on their unique traits and capabilities - show how they mesh together to bring your company success.

IV. Products and Services. Address all of the items you will offer for rent, as well as ancillary services provided. Discuss your target market and why prospective customers will come to you for their rental needs.

V. Marketing. For this section, you will want to answer the question, "How will my business be publicized and delivered to my customers?"

VI. Operations. Address supplier relationships, how you will meet in-creased demand for certain items and how you intend to keep the doors open day to day.

VII. Milestones. The idea is to establish near-term and long-term measures of success that you can come back to at a later date and assess your performance. These goals need to be realistic and measurable. Some sample milestones might include certain revenue goals, opening another store and bottom-line profit objectives.

VIII. Funds Required to Operate the Business. You will need to review the amount of money you have invested, the current levels owed banks, vendors and other creditors and projected future funding needs. A lender will want to know (1) why you need the money, (2) the proposed terms of repayment, (3) collateral to be offered for the loan and (4) the source of repayment for the loan.

IX. Financial Information and Projections. No business plan is complete without a financial information section, including any historical financial statements and performance projections. If finance is not your bailiwick, get your accountant involved. Also, free counseling services for existing and prospective business owners are available in many communities through organizations such as SCORE (Service Corps of Retired Executives), Small Business Institutes, Small Business Development Centers and community colleges.

X. Conclusion. Summarize the key strengths and weaknesses of your idea, along with a synopsis of the funding request that summarizes the uses, amount, terms and proposed conditions.

What NOT to do

Here are 10 Don'ts for a plan that will almost certainly result in a "No" from the bank. 1. Submitting a "rough copy." A coffee-stained copy or one with cross-throughs shows you don't take the proposal seriously. 2. Stale information. Outdated historical financial information or industry comparisons will leave doubts as to the planning ability of the entrepreneur. 3. Unsubstantiated assumptions. You need to be prepared to explain the "whys" of every point in the plan. 4. Too much blue sky. A failure to consider all the pitfalls will lead to the conclusion that your idea is not realistic. 5. Lack of understanding of the financial information. Even if an outside source prepares the projections, you must fully comprehend the information yourself. 6. No consideration of outside influences. You need to discuss the potential impact of competitive factors, as well as the economic environment that is prevalent at the time of the request. 7. Owner has nothing at stake. This is a particular problem for a new venture. The investor or lender will expect you to have some equity capital invested in your business. 8. Unwillingness to personally guarantee any loans. If the business owner won't stand behind his/her company, then why should the bank? 9. Introducing the plan with a demand for unrealistic funding terms. The outside party wants to find out about the viability of the business before discussing the terms of the funding request. 10. Too much focus on collateral in lieu of the owner doing his homework. Even for a cash-secured loan, the banker is looking toward projected profits for repayment of a loan. Cash flow is where the emphasis needs to be.