Do you have a great idea and are on the way to starting your own business? Or, have you started your own business but now need additional funding for expansion and growth? You may be asking yourself – where do I begin and how can I make the conversation with my banker more successful?
There are some key things to keep in mind in order to have a successful conversation with your banker. Being armed with the below information will help your banker better understand your needs and in turn help determine the best financial options for you and your business.
- Have a good business plan. It sounds simple enough, but being able to present your strategic business plan to your banker will help him or her understand your business type and gain a better sense of the business’ future stability. Ask yourself these questions: Does my business plan have clear goals and measurable objectives? What are my strategies to meet those goals? What is the competitive landscape?
- Identify your long-term business goals. Beyond your immediate needs, your banker will need to understand where you want your business to be in the future. For example, do you want to double the size of your company in ten years? Presenting your long-term business goals will help your banker determine if you are currently on track to achieving those goals as well as recommend the right products and services for your business.
- Understand your current financial situation. Be prepared to answer the following questions: What funds do you have available? Do you have investors? How much of your personal finances have you invested in your business? How much are you willing to contribute in the future?
- Be prepared to discuss your current cash flow and expected revenue. Your banker will want to know if you currently have a revenue stream, and if so, how you are tracking it. Be ready to discuss seasonal changes to your P&L and ongoing costs, such as rent, utilities, payroll, equipment and supplies.
- Bring the appropriate supporting documents. Make sure to bring copies of these documents to your meeting:
- Tax returns and bank statements
- Proof of personal and business insurance
- Letters of incorporation, registrations or trademarks
- Any applicable licenses
Not only will this preparation be valuable for the success of your business, but also is vital for your banker to offer financial options to help meet your business needs.
John Marrocco is the head of business banking for Fifth Third Bank (Cincinnati). Marrocco oversees business banking in Cincinnati by listening, understanding and sharing customers’ curiosity. For inspiration, read some of Fifth Third Bank’s business customers’ personal success stories at www.53.com/curiosityatwork. @FifthThird.