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,
probably longer.
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