These valuable questions can do more than help you get more working capital for your business. They help you check to see if your company is on track in meeting its goals. You may be thinking about growing your business by taking on bigger opportunities or adding products or services.
By having the answers to these questions, you’ll already be on your way when the time comes. Bonus points if you review the answers on a regular basis to give your small business a checkup.
Don’t wait until you need more operating cash flow to do this. You’ll gain a lot of insights from your answers.
1. What does your business do?
Many companies don’t answer this question clearly. In reading one small business owner’s description of his product, it sounded like every other product on the market. He failed to explain what made his company’s product different.
After you answer this question, run it by someone who doesn’t know your business and will give you honest feedback. It’ll be a good way to test your answer.
2. What’s your marketing strategy?
How do you spread the word about your products and services? Whichever channels you use to promote your product and service, make sure they’re ready for the marketing campaign.
For example, any company that appears on “Shark Tank,” will absolutely need to make sure the website can handle the huge jump in traffic. Several companies reported their website went down after their episode aired. They did prepare, but not enough.
3. What are your plans for the working capital?
Explain what you will do with the money you get from the lender or factor. Is it for a new product or service? If so, describe the value of adding it using any market data to support your answer. (This can be comments from clients.) And if you’re asking for a loan rather than for invoice financing, outline how you will pay it back.
4. How much can you accomplish with the working capital?
This is similar to the previous question, but digs deeper. What compelled you to develop the new product or service? How do you know it will pay off? What will financing allow you to do? Buy equipment to build the product? Hire employees to support the service?
What happens if you don’t get working capital? How will it affect your business?
5. How are you better than your competitors?
Why would clients choose your business over your competitors? How is your company different?
6. How will you scale?
How will you be able to support increased requests for your product or service and provide top notch customer service? What resources will you use? If the working capital will help with scaling, explain how.
7. Who’s on your management team?
Put a face on the company and show how your great staff makes a difference to the business. Don’t just say Jane is an awesome sales person. Think about what makes her a great salesperson. That’s the answer you need to give. For a new product or service, list the involved employees and their qualifications that allow them to manage the product or service.
8. What successes have you had?
It’s smart to have a couple of success stories ready for when people ask. People love stories and showing how you solved a customer’s problem gives you a great way to connect with prospects.
Image credit: Deb Nystrom
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