by Debbie Ruston, Featured Contributor
FURTHER TO MY LAST ARTICLE on How Important is Savings in Starting a Business , a comment was suggested to do a sanity check with a lender to be sure your idea is valid.
The challenge with doing a sanity check with a lender is, if it doesn’t fit within the box of what they deem acceptable, a person can be easily talked out of their dream by a perceived “expert”. It’s vitally important to remember that the lender is a paid employee that typically doesn’t have any entrepreneurial experience. If your idea or proposal is something innovative, very often they can’t see what you see. Many people in life are talked out of their dreams because of well meaning people close to them, or perceived experts. Remember, a lender is an employee typically. If they have never run a business, they are basically running through the acceptable “criteria” on their list, and if your proposal doesn’t match, you are denied. Building a business is not that black and white. It takes innovative, visionary thinking, being willing to take a risk, making bold, powerful decisions, and taking a stand for what you believe in, regardless of the naysayers. You simply can’t take entrepreneurial advice from someone that is an employee, regardless of what position they hold.
Having said that, if a lender does not think your idea is valid enough to warrant lending you the capital required, is that going to stop you? There are always solutions outside of what appears to be the “logical” solution. Its important to study successful entrepreneurs and their thinking. What kind of challenges did they encounter? How did they get started? What did they do to raise the money they required to start their businesses?
An example would be Richard Branson. I once heard Richard say if a business plan doesn’t fit on the back of an envelope, it’s rubbish. Yet if you go the traditional route of applying to a bank, you would expect to write out a very long and detailed business plan in order to be funded. There are entrepreneurial programs that teach things like “how to write a business plan”. An entrepreneur will accelerate their success by studying people like Branson who has walked the walk, rather than an educator (who is an employee) and knows only the “theory”, not what actually works in the world of being an entrepreneur. Branson has a very different way of thinking, and has a philosophy of “screw business as usual”. While those with formal education, and titles that give them the power to make decisions will often not agree with or understand this type of thinking, there is no denying Branson is one of the most successful entrepreneurs on the planet. Who would you rather learn from? Someone making $60,000 per year that is in a “decision making” position about your business idea, or someone like Branson who has the results and has walked the walk.
Many businesses are turned down by bank employees making decisions on the qualification of a potential entrepreneur. This is one reason crowdfunding is becoming very popular. For instance, there are a few restaurants in my town. They have been turned down by banks for the capital they require. They have started crowdfunding campaigns and are receiving overwhelming support from the customers that actually support their ideas. These customers know from their personal experience the quality of the food, the credibility and talent of the chefs and owners, and are standing behind them. This is something that banks will often not do because their idea is not conventional and doesn’t fit into that “box” of what they deem to be the criteria.
It takes being a visionary leader. Being willing to go against the grain of conventional wisdom and finding a way where there appears to be no way. These restaurants are doing this by gaining support from those that know and believe in their vision. They are making it a win/win with these clients by giving them dining coupons for their financial support. It reminds me of one of Branson’s quotes “doing good is good for business”. It’s really great to see people overcoming the odds, and not being denied by institutions.
Successful entrepreneurs understand there will be challenges, however, they are willing to get creative and find solutions and will not give up on their dreams. They are willing to do what it takes for as long as it takes. They are not stopped from pursuing their dreams because of naysayers….they know this is simply part of the process. It’s great to see crowdfunding becoming a new, effective option! But more importantly, it’s great to see business owners really digging in and taking ownership of their dreams, finding solutions, and not being denied by the “well meaning” advice of institutions.