When Financing Your Small Business, Begging Won't Work
Editor's note: Since 1964, business-management counselors at the nonprofit organization
Banks can see right through a weak plan, says Charles Sobel, a
Last week, Harry Dannenberg, chairman of Score NYC's seminar committee, told us why a business plan is important when choosing the right
If you thought squeezing $20 out of your father was hard, try getting a loan without a well-thought-out business plan.
Make It Look Good on PaperA fair amount of Sobel's clients know they need a business plan, but don't know exactly how to make it effective. So before you go to your local Sovereign (SOV) or Southwest Bancorp (OKSB) branch, the first thing you need to do is put your plan on paper. You're doing yourself a favor, says Sobel, by creating a business plan that makes sense and forces you to hammer out the aspects of your business you are less comfortable with. Simply writing it down is not enough, says Sobel. Just like a journalist or a speech writer, you must address your audience. "The potential source of funds is a business-oriented person," says Sobel. Stay away from fancy verbiage or PR buzzwords and focus on getting down a concise statement of what your business will be doing. One of Sobel's clients who wanted to buy a franchise used the marketing language straight from the franchiser's brochure. It was so easy to spot, says Sobel, that he immediately asked the client to redo it in plain, direct English.
Show Me the Money PotentialLenders are exceedingly careful about how they lend money, says Sobel. They look for plans that have merit and explain how the money will be paid back as soon as possible. An affluent builder friend of Sobel's advises loan applicants, "Don't tell me your ideas; show me how you're going to make money." If a loan officer is uncomfortable with the plan but still feels the idea has potential, he or she will often go back to the
Keep Your Ideas to Yourself
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV