Trying to Hook That Big Fish? Make Sure You’re Using the Right Bait

It seems harder than ever these days to locate funding for your next big project. There is virtually no Angel Investing going on right now in the State of Michigan and the banks are coming up with excuse after excuse on why YOU are not qualified to receive a loan. What can you do? Traditionally, investors and banks want to see a business plan. Investors will take business plans seriously if they are well written and thought out. They aren’t too picky, just looking for a few things:

·         What problem is your product or service the solution for?

·         How is it going to make money (your business model)?

·         How much will it take to get started?

·         How much money will it make them?

·         Most importantly, who is going to get the job done (your management team)?

Before you can “reel them in,” you need a killer executive summary. If it’s good enough, they will jump in the boat for you.

Banks on the other hand are a nightmare. A business plan used to work but now banks are requiring:

·         Business Plan

·         Promises from vendors

·         Collateral

·         Legal Documents

o   Franchise agreement

o   Commercial leases

o   Contracts with third parties

·         Schematics for your building

·         What color carpeting is in the building?

Ok, so I made the last one up but once you have everything a bank is looking for which is usually more than I listed, they will ask for something else. These days the best way to go is with an Investor but you have to be prepared if you want to get funding.