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10 Dec 2010 03:57 AM #1
Looking for Financial Backing? Be Ready
Are you looking for some extra cash to keep your business ahead of the competition? Maybe youre looking to hire extra help, lease that office, diversify your inventory, or step up your business game to another level, whatever that is. Take a look at this, its about banks that have plenty of money to lend.
Here are some thoughts you should really think about before you go about the funding process:
How much are you worth, right now?
This is probably the most important thing when it comes to bankers and investors. Are you worthy enough to cover any losses? Hiring the right people is a motivating factor in todays work environment. Even with the help of a loan or investment, paying new people means maintaining a workable business model that lasts for at least two years. New hires want long-term stability anyway, just like your investors.
What are using the money for?
If youre going to tell your investors that you need to hire extra help, you should come prepared to support your plans. How many people are you going to hire? What roles will they have? How many hours will they work? Have you talked to any talent, already? These are the questions you have to answer and much, much more. Be ready to say, I have three people already on a contract basis who are ready for full-time employment, will leave a lasting impression that shows you mean business.
Can you fund your own business?
For the majority of us, this is a simple question. If you can do it on your own, dont even bother with an interest-bearing loan or become slaves to investors. The thing is even though several businesses are doing all right to get by, theyre not doing enough to grow or adopting new talent. Without additional help or much needed space, most companies will never reach their dreams.
How will you make in five years?
Some investors would like see five-year plans, while others only prefer three years. It doesnt matter how far youre going to project your numbers, you still have to prove that your profits can exceed growth and other investments. Nobody is going to back you if youre just breaking even. You have let investors know that you are working on an opportunity of a lifetime.
Do you have the team to manage your business?
Companies who seek funds need to show that they have a team who can manage any kind of growth spurt. Dont expect your bank or some other investor to give you that much needed cash flow when one of your team members hasnt produced anything new besides personal expenses, or if one of your managers hired two average sales people and consistently failed to meet quotas, or if one of your executives needs more development. If youre handling all the projects yourself despite a great team, youre basically asking someone to back only you. And, honestly, how much are you worth?
There are countless other questions to ask than these simple ones listed above. In a recession that is slowly idling along to the good days, organizations specializing in backing small businesses are only dong so when the owner can show proof of funds and a constant return on investment.
If you think thats too much personal information to give away, youre absolutely right. Its much more than personal enough to ask how much you made last year, all the way down to asking why you bought that new car six months ago. Did you really need to buy new? Its so personal theyll ask questions including why you havent hit up family and friends first.
The idea of having others support your business with extra money, whether from close relatives or personal acquaintances, a national bank or a venture capital group, involves making them feel like youre a sure thing. Even if everybody knows that there are no sure things in life and business.Over 150,000 Verified Sources + Deals 95% Off MSRP + Free Website!
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