Launching a new business? Visit your lender last!
When planning a business launch, the bank should be your last stop.
When preparing to launch a new business, the bank is the LAST place to go. Banks are an important part of the process, but you need to get prepared before you talk to a lender about financing your new venture.
Here are three important steps to take prior to meeting with your bank:
- Try to put your basic business plan on paper. This does not have to be fancy, but you should be able to put in writing what you will do, how much it will cost, who will buy it and for how much. You also need to know your operating costs, including materials, equipment, employees, taxes, etc. This information is essential for every successful business and every bank will ask for it when you look for a loan. Michigan State University Extension partner Northern Lakes Economic Alliance has several free tools, templates and resources available on their website to help you organize your plan. Fill in as much of the information as possible before going on to the next step.
- Arrange a meeting with a business counselor. There are several sources for free and confidential business counseling including SCORE (Service Corp of Retired Executives) and your local economic development organization. The business counselor will help you fine-tune your business and financial plan. This will help you determine if you need to borrow money, and if so, how much. The business counselor will ask all the tough questions to prepare you for the same ones the bank will ask you. It is great preparation. If this goes well, then:
- Meet with your banker. From here, you will know where you stand and depending on the answer will know your next steps. After this meeting, you will double back with the business counselor to plan and implement your next moves.
Michigan State University Extension has had a unique relationship with the regional economic development organization Northern Lakes Economic Alliance (NLEA) for more than 20 years. Recognizing the strength of combining resources, this partnership focuses on economic development, entrepreneurship growth and community infrastructure throughout a four-county region in the northwest Lower Peninsula, specifically Antrim, Charlevoix, Cheboygan and Emmet counties. As a result, the NLEA utilizes resources offered through MSU Extension as it provides leadership to state-wide programs sponsored by MSU Extension.