This Real Life Story is an extract from Uncle Ralph's, "The Complete Do-It-Yourself Guide to Business Plans". Read the book.
Real Life Story: “Things not to say out loud.”
When you are finally sitting down at the bank and reviewing your impressive and irresistible business plan, please be careful what you say. These people are not your new best friends, regardless of how friendly and helpful they all seem.
Remember: Their interest is to avoid any risk of losing their funds and to make money on you. And avoiding risk is more important than chasing a new account.
Your objective is to build their confidence in the plan and your ability to deliver. In my experience, some clients will blurt out admissions that do not help their cause with bankers, investors or potential strategic partners.
Some real life examples:
“We don’t have any more money to put into the business, our mortgage and personal loans are already at the maximum.”
“I don’t really want to do this, but I lost my job and had a nervous breakdown. So it’s hard to find anything else.”
“The prototype is not yet working, but I’m sure we’ll get our first order soon.”
“This is obviously a multi-billion dollar market, so we only need 0.002 percent market share to meet our sales projections. And the product sells itself.”
“I don’t know where those numbers came from.”
Please try to be more discrete when you’re forced to admit some of the negatives in your plan. (However, if any of those admissions apply to you, then you are NOT ready to launch a business or request financing. Come up with better answers first.)
Honesty and full disclosure are good, but a confession of all your flaws is not required.
Whoever is listening to your pitch already knows that it is mostly fiction, that it will never go according to plan, and that they have a responsibility to protect their interests by asking the right questions and negotiating a good deal.
You should be equally professional about presenting your plan and defending your interests.
(Note: In all these Real life Stories, the actual names and business details have not been disclosed.)
Your Uncle Ralph, Del Chatterson
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