Another lesson in Business Planning

The most common reason for preparing a business plan is because the bank asked for one before evaluating a request for financing.

We've already discussed that a well prepared business plan document may still not be enough when it's finally delivered. Next comes the negotiating phase. The lesson that was recently confirmed was not to be deterred by questions and requests for more information, but do not be persuaded to go back and revise the Business Plan document. That will only cause the bankers to recycle through the process of internal review, look for the answers and revisions and probably come up with more questions. It may be a good stalling strategy to avoid the "no", but the entrepreneur wants to move forward to a clear "yes", or "no".

So we agreed to respond to the specific questions in a short follow-up note using the approach of "Thank you for reviewing our plan. Here are the answers to your questions and we now look forward to a favourable reply to our request for funds". It worked.

And I got that very pleasant consulting feedback of: "Hey Del, they really liked the Business Plan and our answers to their questions. We're getting the financing!"

A good lesson in effective use of the Business Plan as a negotiating tool. I hope it works for you.