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SELLING YOUR IDEA

(c) 1994 Joel D. Johnson 

After your new business startup plan is complete; you have verified all the numbers; completed all the financial documentation; you have confidence in your ability to work the plan; you have obtained the necessary experience and knowledge and you are ready to seek financing; you will want to start shopping lending institutions.   Of course, you understand, all banks are NOT the same.  You must find a match that you feel comfortable dealing with.

When you have finally found a couple of lending institutions you feel comfortable with, you will want to go over all details of your business plan several times in order to be prepared to answer any and all questions presented to you, before your first meeting.  Believe me, you will be drilled to some extent, so be prepared. 

MAJOR POINT:  DO NOT GO VISIT A BANK UNTIL YOU HAVE YOUR PLAN COMPLETED.  YOU WILL BE ASKED QUESTIONS YOU WILL NOT BE PREPARED TO ANSWER. 

Here are the rules for selling your idea:

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Make sure you understand everything possible about your business and what you want to accomplish.

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Have a comprehensive business plan prepared and ready to present to your financial institution.

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Know all you can about your banker.  He/she will surely find out all about you before the loan is approved.  

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Get this information: What title and authority he/she has; how long he/she has been with that institution; is he/she familiar with your industry; education; family; recreation.  

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If you feel uncomfortable with a lending officer, the vibes are bad, move on to another officer or another bank.

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Find common ground with your lending officer.

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Do call ahead for an appointment.  Lenders hate drop in applicants. Look and act professionally.

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Always be on time.  Showing up late for an appointment makes the banker think that you may not be the responsible type.  If you know you are going to be late, it is best to call your banker and reschedule the appointment.  Keep in mind that your bankers time, like yours, is very valuable.

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Always dress professionally. Wear what you would wear to church, but don't overdress.  Observe what your banker wears and dress the same level.  Unfortunately, people do judge people from first impressions and you have about 10 seconds to make a good one.

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Do not act overly confident.  Just be yourself, but sure of your plan and your ability to succeed.

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Do not act cocky or present a know-it-all attitude.

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Do however, remember that you are in control.  You do not have to do business with any particular bank, while the lender is stuck there.

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Also remember the lender is in the business to rent money.  He/she wants to make the sell, if there is any way possible.  He/she is judged on their ability to close good loans for the lending institution.  This is how they make their money and how they judged for future raises.

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Give a short overview of what you are going to be doing: who, what, where, when, and how.  Do not go into too much detail.  The business plan should answer most of his/her questions.

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Make sure your business plan contains the details necessary and all the additional items in the appendixes.  Your business plan should not be more than 25-50 pages in length (not including information contained in the appendixes) and should be professional in appearance and content.

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Ask the lender to look over your plan and ask them to call you for any clarifications necessary.

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Do not oversell.  This will make you appear anxious and unsure of yourself.

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Let the plan do the selling. 

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Your presentation should not take more that 30 minutes.  Shorter if possible! However, do not act as though you are in too big of a hurry.  Your lender may get the feeling you are trying to hide something.

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Above all...always be honest and forthright in your dealings with your lender.  You will surely need additional financial support as your business grows.  Communicating frequently with your banker is the key to building good banking relationships

There are several good books available on how to negotiate a loan with lending institutions.  It would be advisable to obtain a book or two and make use of the information.

Please refer to other links on this site for additional information and guidance. You may also contact us with your questions at

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