A buddy of mine works for Sertant Capital, a company which specializes in loaning money to businesses for equipment costs. Something which we regularly have a giggle about is the condition in which many of his client’s proposals are in when they come in looking for cash, so much so that sometimes he genuinely thinks that they may be pranking him or something like that. No matter if you are looking to get a bank loan, a loan from an investor or from a company like Sertant, you do not have a hope in getting investment if you are not properly prepared, and here is what you need to get ready before you attend any meeting.
If you are already an operational business you need to know your figures inside out, ready to take on any questions. You should know your market and what the condition of it is, you should understand customer trends, you should know what you are selling, how much net and gross profit you have and you should have all of these figures memorized at the drop of a hat. In fact if you are having a hard time memorizing your figures have them written down on a piece of paper or your hand, whatever it takes so that you can tell people about your business.
Even the world’s shadiest loan shark is going to want to know how you plan to spend the money that they are giving you so this is the next set of figures which you should have. There is little point in asking or a $10k loan if you then have no idea where you will be spending it. Cost this all out first, perhaps you’ll be spending $3k on advertising, $2k on recruitment and $5k on product development, whatever it is you have to ensure that it has been costed and that you can confidently tell someone where you plan to spend their money. These people need to have confidence that your business is going to be able to pay them back, if you can’t even tell them how you plan to spend their money and why, they are hardly going to have a great amount of confidence.
On the theme of paying money back you should also have a robust plan for this. The person who is lending you the money may very well have their own ideas about repayment terms which is why you should have yours as well. Naturally if theirs are more favorable than yours then you can take it, if they aren’t then you can negotiate but you will be doing so from a strong place because you will already have costed and worked out the smartest way to pay them back.
You have give people the confidence that you are not just going to take their money and they will never see it again, always be sure that you know your figures.