The vague, awkward feeling that seizes once you find out that the bank has declined your loan application is not the only time that can trigger an upset.
There are plenty of concerns that might arise before the business is granted a loan, and these are just as valid as a business can expect some unexpected challenges.
Whether you’re in a unique and rough stretch or have a viable, but long-needed idea, there are several questions you should ask yourself before you decide to roll out the red tape and go through the Grace Period.
1. What are my short-term, medium-term and long-term goals?
A business should address the long term as well as the short-term goals that the business seeks to accomplish.
Forget about being first in the money or being first in something- any deal you’re going to make should reflect on your vision of your company being used efficiently and effectively, and your thoughts as to where that vision fits within the market.
A key element of managing a business will be to determine your overall strategy, and the notion of strategy and vision are key characteristics of a good business.
Setting clear goals in each area can be a powerful way to gauge whether or not you have a chance of being successful.
While you may have an overwhelming desire to expand your business or try to make a technological breakthrough of some sort, there should always be an underlying strategy and implementation of that strategy.
2. What are the elements of my business that will make me feel the most proud?
As attached to your budget, your focus may be on the small, medium, and large picture of what your company needs for the long term.
For example, medium-term goals may be focusing on human resources, advertising, research and development, and sales.
Those elements of your company that have the chance of increasing in value over the next three, five, ten or twenty years should take priority.
If you’re the owner of a small enterprise, long term vision may include expanding your product line and capital expenditures.
While it’s important for your business to be focused on the moment, be sure to look at the larger picture as well.
And when you see abundant opportunities, make sure you take advantage of them.
3. How did we do?
Now is the time to evaluate your business performance.
Where are you in terms of revenue growth and profits?
Too many businesses elect to focus only on the here and now, and that’s a big mistake.
Establish the foundation of your performance growth and success by looking at your financial statements from the past three years.
What areas did you notice growth or diminished performance?
How have those trends affected your financial performance?
Have you improved your financials since then?
If so, take the opportunity to share that information with your board.
There’s nothing more frustrating than to see your vision and goals go up in smoke because you didn’t share your vision and your goals.
If your business still has the same “comfort level” as ten years ago, consider giving some attention to changing your marketing and sales techniques.
Think of what sales topics you can improve upon.
Did you know that certain types of sales are more profitable than others?
If you enjoy hot-rods, but rarely fly them, consider flying most of your annual events and convention attendance.
If you have an specialty house, consider sending more of your staff to it.
While you may employing certified public accountants and bookkeepers, hiring more qualified staff can create tremendous motivation for your business to improve.
That’s time and money well spent!
4. What do I need to do now to make sure my company stays lean?
This is the time to contact your bank.
Banks want to provide you with the capital to grow your business but they will also want to make sure that you aren’t going to walk away and take your bank with you.
Either way, it’s important to make sure that every dollar is accounted for and put to use.
Focus on discovering ways to decrease the cost of your goods and services without compromising the quality you provide.
If you have seasonal inventory, consider buying additional inventory.
This way, you can offset your inventory costs at the beginning of the year while also offering deals and better pricing at the end of season.
5. What about financing tools?
Financing a business is not an easy task, so make sure you have all your questions answered before proceeding.
Review the requirements and make sure you have everything you need to provide a complete package.