An idea, not a plan
Never say, “I have this really good idea,” or “This has always been a dream of mine.” Nobody wants to hear about an idea. You must have an actual business and not a dream, or your banker will take a pass, says Mike Bonner, Bank of Montreal.
Any good business starts with a solid plan, and entrepreneurs seeking financing must have one in tow.
“We need to understand the customer, the business and the industry – in that order,” says Mr. Bonner. “In the early stages it’s really about the business plan, the planning and preparation.”
It doesn’t have to be complex, he says. Details can be added and strategies adapted, but the core plan must be in place.
The long-term view
Don’t offer up business projections that look 10 years out – no one can predict the future, and it is not in your best interest to try.
“We’d never ask them for that,” says Mr. Bonner. “We really don’t want to see any more than one year.”
Bury mistakes
Never attempt to hide a poor credit history. A credit check is the first step in any due diligence process.
“We have to take a good look at management and how they handle finances,” says Mr. Bonner. “It’s a good proxy for future viability of the success rate of the business.”
“They should come prepared to tell us why they may have had credit problems,” says Mr. Bonner.
“There could be very good reasons and we could help them deal with it.”
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