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Meeting the bank manager is often reviled as a painful concoction of a blind date date, a job interview and dinner with the in-laws rolled into one.
BUT 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 Dos and Don'ts to help you glide in the bank manager's office/virtual 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 manager for a pencil whilst working out percentages on the back of a Tesco receipt won't showcase you as the thoughtful and organised 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 officer from your 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 CV 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 (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.
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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. Banks can provide up to about 70%, but you must have a cash stake in the business. Why do you think most racing horse trainers back their own horse to win?
- Be late, impolite, impatient, dirty or disorganised. No-one wants to deal with unorganised 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 these days, so don't loose faith if you don't get to draw down your loan 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.