As an entrepreneur you will have to set up meetings with many potential lessors, especially in the early stages of business development. The last thing you want to do when meeting a potential financer is to look unprepared and disorganized.
Here are a few steps you must follow before your meeting, this way you can rest assured that you’ve done everything in your power to yield the best outcome.
1. Research what sources of financing are available
This is pretty straightforward and a given. Spend time doing research on your lessor as well as the different forms of financial assistance they offer. Also establish which you believe is best for you and your business.
2. Set objectives for the meeting
Setting objectives prior to your meeting will set you on a clear path and will provide you with guidance and direction. It will also help you evaluate your performance once your meeting has ended. You should set objectives for loan amount, the type of loan/grant you want, interest rate, expected repayment schedule, goods ready to pledge (if applicable), working capital, response time required, etc.
3. Know the answers to their questions
It’s very safe to assume that you can expect the same lot of questions to be asked at almost all meetings involving financial assistance. For this reason, you must know the answers to all potential questions that will be asked. No exceptions.
Questions to expect include:
- How do your ratios compare to the industry?
- Where do your statistics come from?
- What will you do if, during the first months, your sales are lower than expected?
- Have you shown your proposal to potential clients? What was their reaction?
- How will your competitors react? What will be your response?
- How will your business survive if one of the founding members decides to leave?
- Have you signed a shareholders’ agreement?
- What is the credit policy in your industry?
- Do you have contacts in your industry? What kind of relationship do you have with these people and how can they help you?
- What have you done to help you ensure your success?
- What property and goods are you ready to pledge?
4. Prep your negotiation skills
Good negotiation skills are crucial for successful entrepreneurs. Negotiation isn’t simply about getting your way. It’s having an understanding of what the other party’s expectations and needs are. The more you have an understanding of the gap between your respective needs, the more likely it is that you’ll leave the meeting a happier business person. If the offer does not suit you, you can always refuse the offer and justify your decision.
Once your meeting and the terms of financial assistance have been negotiated make sure that you’ve gone over a summary of all the details with your lessor. This includes a calendar with all important dates, rates, conditions and the next steps.
Rule of thumb: ALWAYS follow up. Whether you receive the finances you would like or not, send an e-mail thanking the lessor for their time. Your paths may cross again and you want to make sure that you are on good terms.