Failure

Monday we took our business plan to an accountant in town for review. He thought the plan itself looked fine, however wasn’t too impressed with the business we were hoping to buy. The business has lost money almost every year and shows no signs of doing better.

He does want to see some more documents from last year’s financial records, but other than that, the trip to the accountant didn’t really give us any great information, unless the loaning agency he referred us to pans out.


Today my brother brought our business plan to the bank for review. We know the business plan needs work, but we wanted some feedback on the plan and on our financials. After speaking with the accountant, he was pretty confident the bank wouldn’t loan us the money since we need over 90% of the funding to come from the Bank. The bank manager was kind and went over the financials and was trying to figure out how the bank could help, but in the end, the numbers were just too far off what the bank could help us with.

Tonight I did some number crunching and it appears that we would be able to meet the banks requirements, but we would be setting ourselves up to fail.

-Only one of us could go to the campground and their salary would be less than $25,000
-We would have no money to do upgrades and maintenance on park
-Would have to run the park seasonal instead of year round
-The park would never show more than $1,000 - $5,000 profits/year

This is due to the bank looking at our opening balance sheet and wanting to see a Debt to Equity Ratio not exceeding 4:1. This is not possible for us, as we are trying to take somebody’s struggling hobby and turn it into a successful business. For the first couple of years our ratio is going to be more like 8:1. By year 5 our ratio will easily be down to 3:1. Banks are such a waste of time in my opinion. It is hard to believe that banks originally made people money.

Lucky for us we have an alternative to the bank, although I’m now realizing that there is a lot more work that needs to be done. We need more details on our renovation projects, as well as a Marketing Plan.

I’m hoping to get these items completed by Monday.