Money, Money Everywhere – and not a Business Plan in Sight
Well, it happened. There stands a lender in front of you – an
investor, a leasing company, a banker, Auntie Hattie. And no business
plan in sight.
So what do you do now?
You could pull out that business plan you did a couple of years ago.
But, no, that just won’t do – too much has changed.
You could spring for that “Jiffy Business Plan Program” that you saw
advertised. But you are sophisticated enough to know that you would
still have to run the numbers and do the writing.
You could hire a business plan writer. But, in truth, you know that
would probably take just as long as doing it yourself.
What you really need is a miracle.
Well, here’s the inside secret that business plan writers won’t tell
you: The more familiar the lender/investor is with your company, the
less you will have to do to seal the deal.
If that banker has known you and your company for a while, odds are that
all she will need is updated financials. Maybe a few paragraphs on what
the money will be used for.
If your CPA asks about investing, odds are that she already has the
financials and is just looking for an overview of the company.
A leasing company that has dealt with you before knows your track
record, and your industry. Ask what they would need to update their
records for the new lease – it’s probably not much.
It gets a lot harder when the potential lender/investor doesn’t know
you. That’s when miracles are really handy.
So here’s what to do …
For starters, look for anything that has been created that you can use
effectively. Have ads been created that explain your product? Have
recent articles been written that promote the strength of your industry?
Is your biographical summary up to date? How about bios on your key
personnel? Newspaper articles? The company website?
Gather what can make an effective first impression. (The key word here
is “effective”.) Write a strong cover letter, noting that items A-B-C
are attached that will introduce the potential lender/investor to the
company. Don’t pretend that this is a business plan – it’s not. And your
lender/investor knows that as well as you do. It is solely information
to introduce the company.
Close the letter by saying you would like to present a full business
plan, with financials, etc., within a specified period of time, and
would the lender/investor be available to meet with you then?
Follow up that letter with a phone call a few days later. Confirm that
the material has been received. Confirm that the time frame is
appropriate. Ascertain just what the lender/investor is most interested
in seeing. If she isn’t familiar with your industry, for instance, you
will know to focus on that area. If she expresses interest in a
particular product line, you will demonstrate the strength and growth of
that product line.
The goal is to begin communicating. Just communicating is a huge step –
many companies don’t even get that far. Treasure that communication.
Sorry, but you will still need to create a business plan, regardless of
whether or not the lender/investor demands it. A strong business plan is
the single most important item in your financial planning portfolio. A
strong business plan can
- Demonstrate your leadership;
- Showcase your creativity;
- Spotlight the talent at your company, both formal and informal;
- Show local and regional support for your company;
- Set your product in a bright marketing arena;
- Highlight your successes;
- Visualize the growth potential of your company;
- And much, much more.
A strong business plan can even overcome so-so financials. Honest.
With your business plan in hand you will be in an ideal position to
negotiate the best possible deal from your potential lender/investor.
It all begins with communication. And it ends in success.
Here’s to your success!
________________________________
By MaryAnn Shank
http://www.businessplanmaster.com
http://businessplanmaster.blogspot.com
Ms. Shank is a seasoned business plan writer, with a decade of
experience in the venture capital world. Her website introduces business
owners to key concepts in crafting effective business plans.
