When you’re looking for financing and seeking a new banking relationship, you need to be able to tell a story about your company.
This story needs to be realistic. It needs to be comprehensive and straightforward. It needs to be told with integrity, but also with optimism. A financial organization is looking for reliability and stability from their partners and clients. They’re looking for “dramaless” opportunities.
This week, a colleague of mine and I are putting a story together for a company that is looking for a new banking relationship. To help make this happen, we are going to give a brief and concise history of the 40 years this company has been in business.
We want to show who their major customers are and what this company’s distinctives are (in this case: high quality, high price, highly customizable). These attributes have led to an excellent reputation, but poor financial results. Those results are primarily due to the fact it’s a family business. They are loyal, but lack processes. We will present a high-level view of the financials for the last few years, including P&L, balance sheet, cash flows, etc.
Once we have told their story and presented the bank with the facts, we will address the relationship with their current bank, and why they need to make a change.
We will start by giving a history of that relationship. In this case, the bank they are currently with is concerned. This bank is too small for this company. The company has underperformed in the past and they have not made necessary operational changes.
So, now they are looking for a new financer and have a game plan. We will lay out the actions they are willing to take moving forward.
We are presenting a $6 million “get well” plan that includes a list of 50 items and initiatives. This list would consist of many things in many areas. For example, we’re going to hire key employees, such as a plant manager that they’ve never had before, and a professional purchasing person. And then the bank will ask them why they should believe they will be able to accomplish this when they have not done so in the past.
The answer is that they have hired Broad Insights to shepherd this process and provide guidance and accountability.
Imagine the level of confidence a bank would have if you approached them in this manner:
- How did we get here
- What is our current situation
- What is our detailed plan moving forward
This type of confidence and clear vision for your company will help you get the financing you desire.