Some say meeting the bank manager for the first time is a like first date, a job interview and a meeting the in-laws rolled into one.
If it wasn't for that first date, you would never have found your wife, and without a job interview you would never have gotten the job that has given you the experience and knowledge you have today. So we're all going to be nervous asking for a loan to start up a new business, but it's the first step to business success.
We've complied a list of Do's and Don'ts to help you glide in the bank manager's office with the confidence and composure of a talented and prepared entrepreneur.
Do
- Know your figures inside out, have them checked and double checked. Asking the man the other side of the desk for a pencil while working out percentages on the back of a supermarket receipt won't showcase you as the thoughtful and organized business person you are. This is even more important if are meeting the manager on your own.
- If possible, bring a charming accountant or well-versed liaison/representative from the potential franchisor. You still need to know your business plan and financial documents by rote, but they have years of experience dealing with figures and accounts.
- Sell yourself. Include your resume and a small personal history about yourself. Explain why you're passionate about this business model, your experience and your motivation. If you have been a truck driver for the last decade what has pushed you to open a gardening franchise? Convince the manager that this is the right franchise for you.
- Use the bank's planning templates and documents. You can download these from their websites, or pop into your local branch to pick some up.
- Research what start-up grants and Small Business Administration loans (if any) are available from the government. How much are they, have you applied for them? If you're not entitled to a grant, why not?
- Prepare a worst-case scenario projection along with the more positive ones. Be honest with the manager and with yourself. If things turn for the worst you may be liable for a large repayment.
Don't
- Forget to bring ID, a utility bill and three months of personal bank statements if you need to open an account.
- Ask for the entire amount required to start your business. The Wall-Street Journal reports that entrepreneurs generally invest 20% of their own money into the franchise.
- Be late, impolite, impatient, dirty or disorganized. No-one wants to deal with unorganized people. These are an instant turn-off. Act like you would on a first date (avoid playing footsie however...)
- Leave without arranging another meeting with either the manager or someone else in the bank. Hearing "I'll be in touch", can often be the last words you hear before an impersonal rejection letter graces your letterbox weeks later. Convince the manager that this is a great idea, and if he has any misgivings that you are prepared to work through them to produce a solid business model.
- Give Up. It is far more difficult to get a penny out of the banks for start-ups at the moment, as we've documented on this blog, so don't loose faith if you don't receive funding straight away. If you are rejected, arrange a meeting to discuss where the pitfalls were. Go back to the drawing board and revisit your research.