Turning your vision into a reality sadly won’t happen for most, so what’s holding you back? There are so many creative and beautiful ideas in our world, that with the right amount of care and cultivation they can become so much more. The mind rushes to ask so many questions:
Where do we even start?
How much money will we need?
What will we pay our staff?
Is an office expensive?
Can we even get a loan?
The list goes on and on……
So let’s pump the breaks and digest this thought of where to start one step at a time. Human instinct and observation tells us that if we can get money right away, we can start a business. Our minds tell us that money equals buying power and buying things will make our vision tangible and start to come to life. While there is some truth to that, we need to unpack how we get to the money.
Creating relationships with commercial lenders and bankers is something that has helped us immensely in understanding how to help put dollars behind visions. The truth is, going to the bank appears like the place to start, but it’s actually where you want to end. Consider them the HR of the business creation process and that they want a polished interview of how your vision will ultimately make money.
Amongst other things, risk will be one of the largest categories you will be evaluated on when talking with the loan officers and their team. How can you mitigate the risk from the moment you walk through the door of the bank? Let’s start here:
There are some major categories that are important to understand before we make the ask for money. Here are some simple questions to ask from the beginning.
- Who is my competition?
- What are my projected revenues for low, medium, and high volumes?
- How much money will I need to cover all startup costs?
- Do we know our monthly expenses?
- What is our target market?
Build Your Team
This is not the team that will work FOR you, but one that will work WITH you for the lifecycle of your business. Having a trusted network of people around you will ease your mind and allow you to focus on your craft or passion.
- Where will your insurance come from and what types are needed?
- Do you need a contractor to help build a space?
- What lawyer can you trust to help legally organize your business?
- Who is going to take on the IRS for you? Do you have a CPA in mind?
- Would a business coach help to put your mind at ease with some of these decisions?
Write the Plan
You would be amazed at the amount of times people come in with the idea and no plan to go with it. Lenders are like coaches. They approach every game with a plan and understand what it will take to execute and win the game. What’s your plan to win?
- Compile the data you collected into one easy to understand document
- Add in an Executive Summary that is a refined description of your vision
- Include supplemental documents such as a personal resume, personal finance status, current debt if applicable.
- Have someone help create a nice layout and cover sheet for the business plan. This will help compliment the hard work and data you have to present.
- Let’s connect on how The Elevate Co can help. Start here!
Practice, Practice, Practice
Lenders listen to new ideas every day. The are in tune with whether people truly believe in their product or service and if they have done their homework to have a thorough knowledge about it. They have a pretty good B.S. meter for ideas and get paid to poke holes in your hard work and passion, so don’t take it personally.
- Ask someone you trust to bring a few people you may not know or don’t talk to often to sit down and listen to your pitch. Set the tone and expectations with what you need from their feedback. Frustration is relevant to expectation so set the expectations early and often.
- Remember, people that are cheerleaders for us and our ideas are great, but unbiased and real feedback is what will make us dig deeper and want to perfect our plan.
- Now your up, give them the pitch and sell them on your business plan like they are lenders sitting across the table from you. Collect the feedback from your trusted sources and refine your speech.
Its Go Time!
The brakes have been pumped, the research is done, and the practice has been put in. Now go sell the lenders on your idea to obtain the money you need to make your vision happen. It is not always guaranteed that the best business plan with get the loan, but going through the process and being prepared only increases your odds. You may find out while building your business plan that your idea sounded great initially and even though it might make money right away, it won’t be a long term business. The research may save you from debt or it may create more and more clarity on how your idea will be successful.
Just remember….Don’t start with the bank!