It’s no secret and shouldn’t surprise most, it is relatively tough to get business financing to get a startup business especially in obtaining a conventional bank loan. Consequently, if you’re a startup or at least thinking of starting a company, how can you resolve this issue of obtaining a business loan from a conventional bank?
Here’s the key: don’t be a startup small business. Easily said, but not difficult to achieve if you practice discipline and commitment.
How to Gain Proof of Market
It’s difficult to produce and sell goods and services to a market that doesn’t exist or is too tiny. Start-up businesses don’t consider the size and profitability of the market they intend to function. Due to the many options offered to aspiring start-up companies via social networking and other online platforms like Google or Yahoo, it’s relatively straightforward to find out the market potential for a organization.
The recommendation is to apply the MVP or”minimal viable product” principle which means you take a simple model of your main product and / or service offering and get it to the target market immediately. The intent of doing this is to acquire quick feedback for necessary developments and evidence that the market exists. Also, to really get a taste of this market, hit the streets and ask potential clients.
Identify several suspects to your product or service offering, and reach out to them with a telephone call, direct mail survey, or in person visit. The main intention of these activities is to acquire feedback and finally a purchase if mutually valuable.
As soon as you have proof of market for your company via earnings and proof of cash received via company bank statements, include these documents in the company financing package. Show how the business loan will enhance the capability to gain more market share or increase profit margins through business development.