Donna Probes: The age-old question of cash

Stephanie Shomin, The Record-Eagle, Traverse City, Mich.
Updated ·3 min read

Apr. 16—Unless there is a rich aunt in the picture, a common thread among many of the entrepreneurs we work with is the need for capital to finance a new business. It may seem like a mountain to climb, but there are ways that aspiring business owners can position themselves to enhance their chances of securing financing.

This subject will be covered at a free SCORE workshop on May 18. Anyone needing business capital should plan to attend. Here are a few things to think about.

First, it is important that you conduct a market analysis to determine if the business idea you have is viable? An internet search can provide answers to many questions including: Is there room in the market or is it saturated? Are there other competitors who have already captured your potential customers? What will be the competitive edge that will attract buyers to your product or service?

The Traverse City Area District Library can connect you with a wealth of demographic and business data. Plus, SCORE will also offer a workshop on Market Research on April 20.

You will need to show a potential investor or lender that you have done your homework. They must have confidence in the future success of your business. This homework begins with a good business plan. No one can progress through the application process without a well written business plan.

It should include the following elements: a description of the business including ownership, partners, mission, etc., market research including a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), a run-down of operations and management, a sales plan, and a financial plan that includes start-up details like capital needs, owner equity, start-up costs, etc. And finally, it should include an estimate of what your monthly income and expenses will be, along with a projection for future years.

SCORE has several templates to work from. I really like the one provided by the Small Business Development Centers. Its fill-in-the-blanks format makes the process much easier.

Run your business plan by trusted friends and your SCORE mentor. Print several copies to take with you to meetings with potential investors or lenders. Don't forget to show it to family members who might be interested in helping you with your capital needs.

This document serves as your passport to the world of lending. It will open the doors and from there, you must sell yourself as a reliable borrower. Get an up-to-date credit report on yourself to make sure there are no lurking surprises. You can get one at no charge yearly at www.annualcreditreport.com.

When you meet with a lender, put your most professional foot forward. Muster every ounce of confidence you have. Everything from your enthusiasm to the financial projections you lay on the table communicates your desirability as a borrower.

To sign up for the April 20 and May 18 workshops, visit www.score.org/traversecity.

Donna Probes, M.B.A., spent 10 years as a small business owner. For information on SCORE, visit traversecity.score.org.