Common Questions When You Ask for Working Capital

Ben Yoskovitz lists the 10 common questions investors will ask. Whether you're a startup or needing working capital to grow your business, knowing the answers to these questions will help you stay focused and be prepared to talk with a financial institution. However, we rephrased the questions for the company that needs working capital -- not startups:

1. What's your business about? No change here.
2. What's the barrier to entry for competition? You're adding a new product, service, or something to make your business bigger. You still need to justify why your company is the one to do it and how it will outlast the competition.
3. What's going to stop big monster company in your space from copying you? You already have an advantage here... you've been in business this long and gotten this far. Maybe your existing customers are the ones asking for your new product or service. This means you already have an audience waiting.
4. Why are you raising the money you want to raise? You can always expect this question when it comes to asking for financing.
5. How far does that money get you? You also need to cover the bases on what the money will do.
6. Do you have customers for the new product or service? Obviously, you already have customers. But how do you know the new product or service will be as successful as your current products and services? Cover that here.
7. What's your marketing strategy? How are you going to let customers and prospects know about your added products and services? Just because they use something your company produces doesn't automatically mean they will know about your new additions.
8. How will you handle scaling? Will you be able support producing more products or providing more services? Do you have the resources? Or will the cash cover the resources?
9. What's the team look like? What are your backgrounds? Describe the people behind the company -- this is your chance to put a human face on a company. Assuming the entire company isn't involved with the growing part of the business -- tell them about those who are going to work on the expansion and what makes them qualified to do it.
10. What's your success to date? Since your company has been in business, this is an opportunity to show what you did to succeed and how you'll apply that in growing the business.

Even if you're not looking for working capital now, these questions keep your business on target and moving forward.