Business Plans--Beliefs About Lenders and Investors

Every business works within the context of core beliefs. We have developed beliefs that define how we work with lenders and investors. We consider them to be guiding principles that, if applied, will improve the quality of your business plan as well as the quality of your relationships with others. We share them with you in this article in the hope that you will find these beliefs worthy of adopting in your business as well.

Belief 1: They fund people, not projects.

Funders are not interested in your product as much as they are in you. After all, you are going to manage, market, and produce products and services that will earn them their return on investment. They want people in whom they can feel confident.

Belief 2: They want to lend or invest--not give.

Funders want their money to work for them to earn a return. Therefore, they expect information to be provided, milestones to be met, and plans to be followed. They are not giving a grant--they are investing in you.

Belief 3: They don´t want to have to work for their return--they want their money to work for them.

Funders are not interested in taking over your project and making your plan work. They want you to do that. They have already worked hard to earn their money. Now, they want their money to work for them.

Belief 4: Asking them to consider an unprepared project harms everyone.

You typically get only one chance to impress an investor. If they are presented with a poorly prepared business plan, they have already formed their negative opinion about you and your project. In addition, while they may be missing out on a truly promising project, they likely don´t believe you can pull it off at this point.

© Copyright 2006, Leonard M. Stillman Jr., All Rights Reserved.