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!
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By MaryAnn Shank
http://www.businessplanmaster.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.