ChApter 10 | SELLING YOUR BUSINESS PLAN | 179
Don’t answer on the spot. Take the
proposal home and see if you can live with
it. If you can’t, meet with the person again
and explain exactly what you can’t accept
and why. Then propose changes. If this
doesn’t result in agreement, start looking
for other funding sources. It’s far better to
say “No” than to accept a bad deal. Anyone
who has been in business for a while
will tell you the times he turned down
poor business proposals were at least as
important to his ultimate success as the
ones to which he said “Yes.”exAmple: Charlie wanted a loan of
$20,000 to start a limousine service.
The bank offered him $20,000, but
wanted equal monthly payments of
$1,018 over two years. Charlie had
expected to make payments of $53 0
per month over five years. After he ran
the different loan payments through
his cash flow schedule, he discovered
that he couldn’t pay his own rent and
grocery bill if he had to pay $1, 018
per month on the loan in the first two
years. After he explained his problem
to the loan officer, the bank offered
Charlie interest-only payments for the
first two years. That was a much better
deal and Charlie took it.Plan in Advance for Legal Details
Taking money into your business requires
lots of legal documentation. You will
present a more professional image if you
understand some of the basics.Loans
Whatever loan you arrange will have to
be reduced to writing. If you deal with a
bank or other institutional lender, it will
have the necessary forms. However, if
your arrangement is with a friend, family
member, or private investor, these details
will probably be up to you.
If your loan is simple—a specific
amount of money, at so much interest,
to be paid at regular intervals—you can
safely design it yourself. While a course in
contract law is beyond the scope of this
book, the sample notes provided may help
you focus on this task.
However, if the loan involves compli-
cated default provisions, security, and
balloon payments, you and the person
you are dealing with would be wise to
have it checked by an attorney. If you have
done most of the work, this shouldn’t be
expensive; negotiate the fee in advance.