1.  The Plan describes a marketable idea.

Lenders and investors want to see proof that customers want your product or service and are willing to buy it for a price that gains you a consistent profit.

2.  The Plan must show good profit potential in a short period of time.

Because new business ventures are so risky, they are expected to earn at least a 25% annual return, and preferably more.

3.  The Plan targets a clearly defined market with enough size and purchasing power to produce a profit.

 Lenders and investors look for businesses whose target markets are clearly defined. They also prefer large markets with high growth potential, but avoid businesses that try to be “everything to everybody.”

4.  The Plan explains clearly the “competitive edge” your product or service has in the marketplace.

The more unique your product or service is, the better.   Show how you offer the customer something the competitor doesn’t or can’t.

 5.  The Plan shows the company’s ability to control both the quality of the product or service and its delivery.

Dependence upon outside contractors and sales representatives can be considered a potential weakness when quality of delivery, installation, and service of the product is primary to the company’s success.

6.  The Plan shows that managers and employees have the skills and the experience to make the company a success.

Lenders and investors don’t put their money into a business; they put it into its people.  Skilled, experienced managers and employees can make a business work even when resources are stretched thin and conditions are tough.  Lenders and investors also know that experienced managers and employees will improve their chances of getting their money back.

7.  The Business Plan idea is not overly complex.

Trying to do too much too fast—and/or having to educate the consumer about a product’s or service’s benefits–can put a company under before it can even get started.  This applies to expansion plans as well as start-ups.

8.  The Plan shows a personal investment in the business.

If you don’t believe in your own venture enough to invest at least some of your own money into it, no one else will want to either.  “Sweat equity”–unpaid personal time and hard work–can be important, but lenders and investors prefer to see an entrepreneur motivated by a substantial financial stake in the business.

Next week in our Part III conclusion, we will summarize 9-11 and answer the question:   “BUT – What if you aren’t able to secure funding?”

 Compliments of Lew West Business Consultants 

 www.lewwest.com  Blog  www.MyNext30.com

Third Party Lenders are often a good source when banks decline your loan request. When you can show you have a healthy company they are usually able to be more creative than a bank. The criteria still includes showing a history for the business, and that it is capable of making a profit.

Potential lenders or investors are keenly aware of the risk and want a return matching that risk:  the greater the risk involved in the venture, the greater the return demanded.  There are a number of factors they will take into consideration when reviewing your Business Plan, however if you have a solid plan, your chances are greatly improved.  Some of those factors will be discussed next week.

Compliments of Lew West Business Consultants 

 www.lewwest.com  Blog  www.MyNext30.com

 10 Things That Build Business Value!!

 1. Establish your brand in the marketplace.

 2. Develop your operations manual. Put systems into place that will let your business maintain or grow in your absence.  

3. Be vigil in keeping your books current; showing accurate, clearly identified and consistent records.  (Remember, besides it ultimately making you more successful, a potential buyer or auditor might be looking at them any day.)

 4. Expand your individual client lists, your networking sources, and especially protect your reputation. Your reputation and your company’s reputation are identified as being the same.

 5. Take care of your intellectual property: trademarks, patents, etc.

 6. If you have any outstanding tax issues, take care of them ASAP.

 7. Give a good first impression – the business should always look clean, businesslike, and attractive when anyone walks in.  Specific maintenance duties should be included in every job description, e.g. keeping trash emptied, personal items out of sight, etc.

 8. At least quarterly, review that your legal paperwork is being maintained.

9. Update your business plan weekly or monthly as well as your expected future projections.  Maintain your business plan as if a buyer might walk in the door any day with an outrageously large offer – IF you can hand it over your current business plan and books for review Right Then. 

 10. Obtain a realistic picture of the value* of your company, noting that specific actions you take with the above can increase its value. Despite all of the things you hear, there are no set formulas in determining your company’s value.

 *Determining the value of a business will depend upon several things including, but not limited to, company assets; net profits the business is showing now and in the past; feasibility of further growth or expansion of the business; location.   If the goal is to sell – the recent sold price other area businesses in that industry will need to be taken into account, but only as one variable.

 Compliments of Lew West Business Consultants
http://www.lewwest.com/   Blog – http://www.mynext30.com/

 2.  Be aware of the difference between what a client “perceives” as the product value and its “actual” value.  Once you determine the break-even cost (actual value) of your product, you have established a base price. Now you need to focus on establishing the “perceived” value of the product to the client. The client usually knows the market price range of the product, so your job is to show the client your enhanced attributes of the product.  You want your client to begin to “feel” that you are offering a product of greater value than what is on the general market.  If you have developed a strong list of benefits and advantages to serve their need, they will “perceive” your product as worth more, and will be willing to pay more for your enhanced version. These unique attributes could possibly be an improvement you’ve added, or something your competitors have failed to point out, or even showing them how to more efficiently use your product to better fill their need.

3.  Peer image often influences product purchase.  The “in thing” has a great deal of emotional appeal. Know your target market and strive for an innovative way to tap into that perceived need.

4.  Competing on price. Be sure you know what the pricing for your product, or similar product, is within the general market. If you undercut the going rate too much, not only are you undermining your own marketplace by diminishing the going price, but the backlash from your competitors might trigger a price war.  No one ever wins a price war, and the one that ultimately comes out on top will be the larger company(s) with the deepest pockets. A idea is to not open that Pandora’s box at all.

5.  Play fair.  Many times we get so involved in breaking our services into multiple “options” we lose sight of how the client may respond. Yes, many times more can be collected by doing it this way, but keep it to a minimum. No one likes to be “nickel and dimed” so be careful not to over-do the options and their escalating costs. 

Even though options can give you leverage as to what you will or won’t do without additional payment, if the client ultimately feels you aren’t playing fair, and not showing proper empathy for their needs, it will hurt you in the long run.  You may consider it fair pricing, but if the client doesn’t – you lose.

Compliments of Lew West Business Consultants
http://www.lewwest.com/   Blog – http://www.mynext30.com/

Have you ever taken the time to ask yourself these questions?

 Why am I doing this business? No, really – why am I investing the time to do this every day? What’s the purpose? What reasons cause me to do this, versus not doing this?

 Is your reason simply a surface answer, like money, or stuff, or “to get out of debt”? Very few people ever take the time to ask themselves this simple yet profoundly deep question. True success exists in the answer to this question. In fact, one of the very reasons so few make it big (I’m talking about the “dream money,” the luxuriously-and-ridiculously-large-lifestyle money) is that very few are willing to ask, contemplate and answer this simple yet profoundly deep question.

 Often people seek help, months or even years into their careers, searching for answers to their lack of production. There are many reasons for lack of production in the face of consistent work habits. Yet most can start at the core of their existence and find the answer.

 Why is it that you eat every day? Why is it that you show up at work? If you don’t eat, you begin to painfully shrink away, become increasingly ill, and soon simply stop existing. Death becomes you. If you fail to show up at your work, you will no longer have a business, which means the roof over your head no longer exists, the relationship you had with your significant other may wither away, your children look at you cross-eyed on the way to the orphanage, and strange men come to pick up your car, your furniture and your lifelong collection of belongings. You’re left with nothing.

Do you eat just because you must? Do you show up to work just so you can make a bi-weekly check and pay the bills?

 Search deeply in your soul for the reasons WHY you do things, and you’re much likelier to DO those things…and do them well. Owning your own business is not a requirement in life. We must eat, sleep and breathe-but we don’t HAVE to own our own business. We do it for a reason. If you can find the reason or reasons you ended up here, your search for success will finally have ended. Victory will become you. Those who know exactly why, – who know the true reasons that cause them to act, – are those who achieve success with ease.

 Find yourself a purpose and you’ll find more than enough inspiration to guide you through even the most treacherous storms life brings you.

 In your search for your core reasons for doing this business, you may come up with a list of inspiring reasons that will cause you to act with a fervency so great, some would describe you as insane, crazy or “workaholic.” In reality, you have found a level of balance and peace which cause things to come to you with ease. Your purpose is so great and so clear that the actions it takes to create or produce become second nature. Success comes to you with ease.

 Others may have to search long and hard for a purpose, not only in their businesses but in their lives in general. Choose carefully the locations where you go to seek answers to your life’s purpose. Find a quiet place. Sit and write. Think and ponder. Decide what the real reasons are for your desire for riches or whatever else it is that you seek in this business.

 Achieving absolute clarity in your reasons for doing business will make doing business much more fulfilling. There’s simply no time, no room for fogginess of mind on the platform of success and accomplishment.

 The moment you discover your true reasons for doing your business, the second you become clear, that is the instant when you’ll discover how effortless success can be.

 Ask yourself, “Why?” And take the time to come up with the answer!

 Compliments of Lew West Business Consultants
http://www.lewwest.com/   Blog – http://www.mynext30.com/