All businesses need money to grow, that’s no secret. But if you are a small or mid-sized business finding—and getting—business financing can seem like an impossible task.
We are all looking for the secret sauce that will make us winners in the business financing game. But most business owners are unaware of what the secret is to winning business financing. Yet it is sitting there in front of you.
Yet most business owners do not incorporate this in their business financing approaches.
Identifying the Secret Sauce of Business Financing
Financing sources complain that most businesses are unprepared when they present to them. And I have seen many of the proposals and applications that businesses have sent to lenders and investors, and in many cases I agree with the financing sources—they are inadequate.
However, if I ask the same businesses to show me how they prepare their proposals to a great potential client I am amazed at the comprehensiveness and attention they have given to it.
So the secret sauce to winning business financing is to treat the process as though it were the most important marketing presentation ever. And it is!
Winning Business Financing is Selling in Its Highest Form
Always keep in mind that approaching a financing source is selling in its highest form. You are, in fact, “selling” your company’s capabilities in exchange for an influx of money—no different than approaching a potential customer.
What this means is that your presentation to a financing source needs to be a show-stopper that highlights all your strengths and business growth opportunities.
The objective here is two-fold: getting the money you need and building a long-term relationship with your financing source.
Remember that lenders and investors review hundreds, if not thousands of presentations. You need to ensure that your presentation stands out from the competition and motivates the financing source to want to be part of your success.
Treat This as the Most Important RFP Ever!
Treat your presentation to a lender or investor in the same manner that you would for the most important prospective customer that you could hope for– and prepare for it in the same way. Just as you would if you received an important RFP (Request for Proposal).
And that starts with a comprehensive understanding of what that prospective customer—your financing source— wants and needs. The next step is to provide that lender or investor with the solution to their specific needs and requirements.
And what is it that a financing source is looking for? The essential thing that financing sources are looking for are well-run businesses. So your goal is to show financing sources that you are a company that is building maximum equity. If you can effectively present that to your lender or investor, that will translate into securing money for your firm.
Your main goal is to build a company that lenders and investors want to fund and make sure that the financing sources know that you are that company. This means you need to do more than just present your business plan and print out some financials from QuickBooks.
This is a marketing event, and you need to be creative in the way you present. You want to highlight your strengths, but do not want to lie or hide any serious issues.
This will require that you put together an interdisciplinary team when creating this presentation. The team should include members from accounting and finance, marketing and sales, along with management and operations to ensure all parts of the company are brought into the strategy process.
To dramatically improve your chances for success in winning business financing, you need to go beyond the business plan. The business plan is invaluable when applying for financing; however, it is not the whole picture. Your business plan is the foundation of your business; it defines your vision and mission and serves as a roadmap as you move forward. But most business plans are for internal consumption. Financing sources want and need more.
The key point is that you must be as prepared as possible. You need to demonstrate that your company understands all the requirements of the financing source and that you can not only meet, but exceed, their requirements. Give them your map to success and profit and make that the aim of selling your proposal to them.
Your Presentation Should Sizzle!
Remember that you are selling a financing source to “buy” you. Every section of your presentation should sparkle more substantially than a business plan designed as a planning tool. So what do I mean by this? Make sure the look and feel is professional and electrifying. Motivate the financing source to pick your presentation out of the many on his/her desk because:
- It seems more interesting and successful than the others
- It looks professional in its use of pictures and graphics
- Your cover letter stimulates them to want to read more
And the way you do that is to personalize this presentation to your unique situation and the financing source’s requirements. It must be personal, using specific discussions that you have had with the financing source, and note any verbal understandings.
Financing sources review hundreds of presentations, so strategize on how you can make yours stand out from the crowd. Make sure that your cover letter and Executive Summary excites them to want to learn more.
Give more than just the salient facts and present your numbers from a selling standpoint and rethink how you show the interpretation of the important numbers. But most of all provide the passion and the dream to get them to buy-in to your joint success.
Diane Weklar, the Authority on Accelerating Business Growth, is the CEO of the Weklar Business Institute. She is the author of the award winning book, Mastering the Money Maze: 10 Secrets to Winning Business Financing,which is also an Amazon #1 Best Seller. This book provides practical insight to build a successful business and the practical steps to raise capital to help your firm grow. She can be reached at Diane@Weklar.com.