Need A Small Business Loan? Get A Plan

Apr 1 2014, 4:33pm CDT | by

Not too long ago I attended a meeting of one of the local tech networking groups to see a presentation from one of my acquaintances at the New York Times. Part of his presentation included time for some of the local businesses to share their elevator pitch so he could help them understand what editors are looking for when they pitch their story to the media.

I was surprised at how many of them were unable to clearly articulate what their companies did.

With this in mind, I couldn’t help but think about how it seems whenever I talk to lenders about small business lending, they invariably comment about the same thing. When small business owners can’t successfully articulate what it is they do, what their vision is, and how the loan they’re looking for will help them achieve their objectives, it forces the lender to look strictly at the numbers. A small business owner who wants lenders to look at something more than the balance sheet, needs to give them a reason to look for more.

Over the years I’ve learned an exercise that will help almost any business owner fine tune how he or she describes their business. Like everything else worthwhile, it takes some effort—but it will pay off in the end.

It All Starts With the Page

Start with a fresh Word doc and describe what your business does. Although you’ll want to confine it to a single page, describe your vision, the market problem you solve, and how you solve it.

Don’t be afraid to include some detail. This is a document that might never be shared with your customers, but it could. Nevertheless, it’s a document that you’ll refer to time and again. Before you call it complete, take the time to review it to make sure you’ve captured everything. Whether or not you share this document with your customers, don’t take shortcuts. Make sure it is as well-written as possible and is something you won’t be ashamed if a customer or investor were to see it.

The Next Step—The Paragraph

Once the page is created, the next step is to coalesce the content on the page down to a paragraph of 200-300 words. This will likely be more challenging. Mark Twain famously once said, “I didn’t have time to write a short letter, so I wrote a long one instead.”

To create the paragraph, you’ll likely be making more decisions about what to leave out than what needs to be included. You’ll want to keep the gems—those things that make your small business special. Although you may have thought about these things, this part of the exercise compels you to articulate in a bite-sized chunk exactly what you do.

You’ll find numerous opportunities to use the paragraph in marketing materials, trade show programs, award nominations, content on your website (you’ll also be able to pull things from your page description too), and other promotional literature just to name a few of the possibilities. In my opinion, these are some of the most important words you’ll ever write. Don’t be discouraged if it’s difficult (it likely will be).

The Last Step—The Sentence

You’ll likely find this to be the most difficult step. If writing the paragraph helped you condense what you do down to the core, writing the sentence will likely feel like you’re taking a butcher’s knife to it, but you should really think of it as a scalpel.

The sentence will help you pare your description down to the very essence of your value proposition. This is what some people call the elevator pitch. If someone asks you what you do standing in an elevator, how would you answer them?

The paragraph will likely be part of the documents you use to demonstrate to the lender what you do, but this is what you’ll otherwise use. It’s also handy for networking meetings, Chamber of Commerce luncheons, and in your sales literature. Between the paragraph and the sentence, you’ll have the two documents you’ll use the most when putting together sales materials, writing a press release, creating marketing materials, or otherwise describing what you do.

Although they take a lot of work to put together, don’t expect that you’ll be able to do it once and never revisit them. They should be considered living documents you’d revisit on a regular basis to make sure they are still relevant. At least once a year—if not more frequently—pull them out and make sure they accurately articulate what you do and clearly identify the value your company brings to the market.

Although the page, the paragraph, and the sentence aren’t directly related to your finances or your credit score, they are critical documents that will help you articulate what your business does within the context of a business plan. Small business owners who want to give lenders a reason to look deeper than the numbers must master the ability to succinctly articulate exactly what they do.

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Bhopal fugitive Warren Anderson is dead (Roundup, Changing dateline)
Washington, Oct 31 (IANS) Warren Anderson, the former CEO of Union Carbide Corp, has died at 92 after living for 30 years under the shadow of the 1984 Bhopal gas tragedy that killed thousands.
 
 
Sit-ins delayed building powerhouses: Nawaz Sharif
Islamabad, Oct 31 (IANS) Prime Minister Nawaz Sharif Friday blamed sit-ins for delaying the construction of powerhouses in the country, as cricketer-turned-politician Imran Khan continued protesting with supporters in the capital city for over two months.
 
 
Britain to repay part of First World War debt
London, Oct 31 (IANS) British Chancellor of the Exchequer George Osborne Friday announced that the British government will pay off part of the country's First World War debt as part of the redemption of bonds stretching as far back as the 18th century.
 
 
UN-Habitat presents the first World Cities Day
Shanghai, Oct 31 (IANS/EFE) The UN Human Settlements Programme (UN-Habitat), headed by former Barcelona mayor Joan Clos, Friday launched its first World Cities Day in China, to be held every Oct 31 to promote sustainable development.
 
 
 

Latest from the Network

Ponzy schemer cheats residents of $22 mn, gets 15-year jail
Washington, Oct 31 (IANS) If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer jailed in the US...
Read more on Politics Balla
 
Burkina Faso's president quits, army chief takes power (Roundup)
Ouagadougou, Oct 31 (IANS) Burkina Faso's army chief Gen. Nabere Honore Traore assumed power Friday after President Blaise Compaore announced his resignation following violent protests against his attempt to extend...
Read more on Politics Balla
 
Spanish government challenges Catalonia's symbolic vote on independence
Madrid, Oct 31 (IANS/EFE) Spain's government Friday challenged Catalonia's decision to hold a symbolic vote Nov 9 as an alternative to a referendum on independence stalled by the Constitutional Court. The government...
Read more on Politics Balla
 
Myanmar roundtable summit discusses political issues
Nay Pyi Taw, Oct 31 (IANS) Myanmar's first five-party roundtable summit held in the Presidential Palace here Friday discussed some key political issues in the country, presidential spokesman U Ye Htut said at a press...
Read more on Politics Balla
 
Jake Gyllenhaal saves outrageous clothes for Halloween
Jake Gyllenhaal always wears his ''sl***iest outfit'' every Halloween. The 33-year-old actor has revealed his dad, director Stephen Gyllenhaal, is ''obsessed'' with Halloween and throughout his childhood Jake and his...
Read more on Celebrity Balla
 
Katie Holmes would tell her younger self to 'relax'
Katie Holmes would tell her younger self to ''relax''. The 35-year-old actress, who has eight-year-old daughter Suri with ex-husband Tom Cruise, claims she never believed she could carve out a career in Hollywood while...
Read more on Celebrity Balla
 
Joshua Jackson calls Diane Kruger his wife
Joshua Jackson calls Diane Kruger his wife. The 'Affair' star, who previously admitted he and his German girlfriend of eight years are unlikely to ever marry, doesn't like referring to the blonde beauty as his...
Read more on Celebrity Balla
 
Paris Hilton dresses up as her dog for Halloween
Paris Hilton dressed up as her Pomeranian pooch for her Halloween party last night (30.10.14). The 33-year-old star sported a fluffy white minidress and matching headgear, which looked like the fur of her $13,000 puppy...
Read more on Celebrity Balla
 
Saudi Arabia facing high child sex abuse: Studies
Riyadh, Oct 31 (IANS) Some studies in Saudi Arabia have revealed that the rate of children's sexual abuse in the Kingdom is alarmingly high with every fourth child having been exposed to sexual harassment at some point...
Read more on Celebrity Balla
 
30 killed in Nigeria car bomb attack
Nairobi, Oct 31 (EFE) At least 30 people were killed Friday when a car bomb exploded in a crowded bus station in the northeastern Nigerian state of Gombe, the National Emergency Management Agency (NEMA) told media....
Read more on Politics Balla