Here are five items to consider before you approach your bank for financing:
• Understand that your primary responsibility is the proper use of capital and that you are in business to make a profit.
• Test the economics of your product or service. Make sure that it is profitable and that the gross profit percent is in line with that of the industry.
• Know how you will finance your business. Visit lenders prior to seeking financing to gather information. Ask your lenders what they will want to see before you apply for a loan.
• Develop a personal financial evaluation. Determine your net worth and your annual, personal cash-flow needs.
• Develop realistic financial forecasts for income statements, cash flow, and balance sheets for three years. Forecast monthly for the first year.
Ken Yancey CEO SCORE Washington, D.C.