Make surethat all types and sources of finance have been fully considered

It is often possible to raise extra finance through the specialist asset financing companies that through your main bank, even if they are part of the same financial institution.

Sounds crazy I know but specialists are able to assess the risks better.

Essential tips for finance

1. If you have trouble determining where your money goes, particularly cash, then keep a spending journal. Document every expenditure for at least a two-week period. This will help you in coming up with a budget as well.

2. Don’t borrow from your 401(k) or retirement plans. This money, after all, is for your retirement. Plus, the tax implications and early withdrawal penalties are so hefty that you really are giving up a lot for a short-term cash infusion. You should have a separate savings account for your current needs.

3. Pay in cash when and as often as you can. It’s amazing how good that feels.

4. Shop around for the best credit card deals and banking programs. By shaving off a few percentage points on your credit card or avoiding bank fees, you can save hundreds of dollars a year.

5. Avoid peer pressure. Your friend might be able to afford five new pairs of leather boots, but that doesn’t mean you can. Who even knows if your friend can and who cares. Take care of yourself first and don’t try to keep up with the Joneses. There will always be people better off and worse off than you are.

Talk to current financiers beforeyou get into difficulties. Otherwise you devalue future forecasts

When is the worst time to talk to your bank manager? When you are already in the crisis and you haven’t provided any warnings.

It comes back to the confidence factor in management. If the bank thinks you don’t have financial control and you don’t know what is likely to happen, you can expect to have a tough time.

Prepare thoroughly if a review is coming up on any of your financing facilities

Banking relationships may have been quite cozy in recent years if your performance has been good and the banks have had a relaxed lending policy.

With the coming recession, your performance may dip sharply. I’ve told the story before but I was astonished how quickly profit disappeared in the early 90s recession.

My sources at the banks report that funds are still available so the credit crunch has not restricted availability but lending terms are likely to be tougher, both in terms of interest premiums and security requirements.

Since proper preparation prevents poor performance, if you put in the effort to demonstrate that your business remains worthy of bank support and your case remains strong, there should not be a problem.

However since a key bank criteria for lending is confidence in the management, poor preparation for the review meeting is likely to be damaging.

What’s In the Business Plan Free Report?

This 17 page report is packed with information:

* 8 reasons for preparing a business plan

* 5 factors for a success plan

* 11 questions to ask and answer when preparing your business plan

* Why your bank manager wants to check your PARTS

* A template for assessing the knowledge and skills you need for business success

* 9 questions to ask about your strategy

* The importance of customer demographics and market segmentation

* A guide to helping you to find your niche

* Positioning price v quality

* 10 questions to ask about your marketing strategy

* Are you in the right business sector? This is a critical issue if you are just starting your business and the business plan report helps you to assess your business risk across seven industry characteristics and seven internal factors.

* Checklist to make sure your plan is up to scratch for the bank manager