I would love to be a fly on the wall and listen in on borrower/lender conversations when, as the business owner, you are confident your business is well poised for the recovery. If your numbers support your assertion, it may go well.
But if the 2007, 2008 and 2009 numbers do not obviously support your conclusion, it will be a very different conversation.
Either way, take the time to work on your strategic plan before your next loan request. Be ready to explain the strategy behind the decisions you made during the recession and the decisions you are making to take advantage of the recovery.
How do you do it?
If you are like me, though, you got into business because you were good at something, had connections are perhaps a burning desire to be your own boss. Strategic planning is something those ‘big’ businesses do, right?
I had no idea how to go about it until I read Norm Levy’s book “The Seven Questions of Business Strategy“. Norm is a friend and a business growth strategist. Thank goodness for people like Norm who understand how strategic planning applies to the smallest of businesses as well as the big.
Norm guided the executive team at Starbucks in crafting their strategic plans which led to the company’s rapid growth. He has often served as interim CEO for clients during corporate transitions. And finally, he has put in writing his approach for our benefit.
Norm says if you want better answers, you need better questions. He will tell you that strategic planning is designed to help you manage critical issues. I have had a few of those in the last two years. How about you?
The seven questions…
So, you want the seven questions, don’t you? Be careful, these seem simple and you need to read the book to dive in. In introducing this topic to an audience of more than one hundred bank executives, Norm wrote the numbers 1 – 7 on a flip chart pad. He gave them number 7 first. They guessed number 1 last after many hints. See if you can guess number 1 from the others. (Email me at Linda@LindaKeithCPA.com if you give up!)
Don’t just read the book. As Norm suggests, start a planning journal. Use it to work through the ‘actions to take’ at the end of each chapter. I promise you will have a better understanding of your business and a much better loan proposal for your lender.