How to Write a Business Plan

ChApter 10 | SELLING YOUR BUSINESS PLAN | 173

Meet Your Backers

Show up on time, well-prepared to answer

any questions that may arise. Then let your

natural enthusiasm help you explain your

business idea fully. Your basic objective in

the meeting is to answer all the questions

you are asked. If you can’t handle a

question on the spot, do not make up an

answer—promise to find the information.

Then promptly write, phone, or visit with

the information later.

Talk about what the investment will do

for your prospect. For example, bankers

want to hear that their loan will be soundly

secured and paid back with no problem.

Your relatives, on the other hand, may

be interested in family solidarity and the

prestige of a family-owned business as well

as making a good investment.

Offer investors/lenders a fair return, as

much security as you’re comfortable with,

and a little romance. By romance, I mean

to emphasize the fact that investing and

lending money are very personal activities.

Your backer wants to feel good about you

and your project. Your backer also wants

to share in your enthusiasm. So, in addition

to presenting a potential lender or investor

with a sound financial plan, make sure he

knows what makes the project exciting

for you.

How to Handle Past Financial Problems

What if you’ve previously declared bankruptcy

or have had other credit problems, such as a

lawsuit for a delinquent student loan? Don’t

try to camouflage it. The banker or investor

will probably find out this sort of informa-

tion from a credit reporting agency anyway,

so it will help you to be up front. However,

you need to come up with a plausible—and

true—explanation for your past credit prob-

lems. It should also reflect your determination

to meet your obligations in the future.

Here’s the wrong sort of explanation for a

student loan lawsuit:

“Yes, I acknowledge that I took a student

loan and didn’t pay it back. I didn’t pay it back

because the militaristic system we live under

is shameful. It’s my firmly held conviction that

students have an obligation to take what they

can to partially balance the scales.”

Here’s a better way to handle the same

situation:

“Yes, I did have a student loan and wasn’t

able to pay it back. I had a rough time adjust-

ing to the working world for several years after

I graduated and couldn’t come up with the

money in time. Since then, I have discovered

work I like to do and am good at, as evidenced

by my recent work history. I have arranged a

sensible monthly payment schedule, which I

have been honoring.”

The second explanation shows that you

will play by conventional credit rules. It also

tugs at the heartstrings a little, something that

never hurts a good cause.