One of the biggest complaints I hear from lenders is almost universal. “Why is it that so many entrepreneurs struggle to explain what they do, why they need a small business loan to do it, and what will they do to make sure they repay the loan?”
From the outside looking in it sounds like it would be a lot easier than it is. I’m not talking about all the financial documents associated with putting together a business plan right now—but they are critically important. What I am talking about are some of the basic messaging challenges associated with articulating your vision and the nature of your business. With that in mind, here are some things I’ve picked up over the years that might be helpful:
What do I do? I can’t even count the number of times I’ve sat in a room of entrepreneurs and watched them struggle with describing what they do. In other words, you’re not alone. The following is a tactic we employed in my ad agency days for distilling what you do into what many call an elevator pitch. It’s the page, the paragraph, and the sentence method. Most of time this will help. In fact, I can’t think of a time when it hasn’t worked for me.
The Page: Open up a fresh Word document and start writing about what your business does. The goal is to sum it up in one page. There will likely be a lot of detail. Expect to go through it a few times to make sure you haven’t left anything out and that it reads the way you’d like it to and puts your best foot forward. This document will be the basis for the rest of the exercise, so make sure you don’t leave anything out.
The Paragraph: The next step is to condense the page into a paragraph. The goal is something in the neighborhood of 200 or so words. As you’re going through this exercise, you’ll likely feel like this is a lot harder than putting the page together. You’ll be making a lot of decisions about what to leave out. You want to keep the gems, the things that really make your business special. Although you may have thought about it before, this exercise compels you to articulate the essence of what your business does.
Over the years you’ll find numerous opportunities to use this 200 or so word description of what your business does in award nominations, articles, on your website, in promotional literature. You might think this is a lot of work for nothing, but believe me these are some of the most important 200 words you’ll ever write. Don’t be discouraged if it’s difficult—I guarantee it will be. Difficult yes, but well worth it.
The Sentence: If you thought the paragraph was difficult, hold on to your hat. This is where the rubber really hits the road. In your paragraph you’ve identified the essence of your business, but now you need to take a scalpel to it. Pare it down to the core. If you were in an elevator and only had a second or two to share what your business does, what would you say? This is also good for networking meetings, in the chamber of commerce, and of course you’ll use it in your sales literature. And, this is how you’ll share what you do with your lender when you’re looking for a loan. Between this and the paragraph, you have the two documents you will likely use the most when creating a sales pitch, putting together a press release, creating marketing materials, and otherwise describing what you do.
Advertising people and marketing folks know these three documents are incredibly important to produce. You’ll want to store them at your fingertips because you’ll be referring to them often. I keep these documents for Lendio close and I refer to them all the time. You’ll also find that as your business grows and matures you’ll revisit these docs on a regular basis. Even in businesses that fundamentally don’t change, often the nuances of what your business does changes. I’d suggest you review your page, paragraph, and sentence every year.
We’ll talk about what you’re going to do with the loan and how you plan to repay it in another post. For now, work on your messaging. You might even be surprised to learn about what you do.
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