My IIB colleague, Siu Ling, has written a great blog on how to get a “yes” from your bank. Her solution – “a well-prepared complete financing proposal package”.

And I am total agreement. But here’s the strange thing. So many of us ignore this excellent advice. To understand why, look at the following typical scenario. I probably have to face it about once a week on average.

When I ask my client what is their situation in the bank account, I am met with a look of pain. Yeah, but how bad, I press. And as I try to drill down, I rarely receive any precise numbers. The client simply does not know, and they do not want to know.

And here in lies the problem. The client begins to lose control. They then become afraid of the bank staff. The next step is simply to try to ignore the bad news. Even less control, and the vicious cycle sets in.

Meanwhile, what is the humble banker thinking? “Please come and talk to me Mr Client and we can sort this out together.”  

As one bank manager once told me, we want people to communicate with us, to tell us of their problems. That way we can resolve issues with minimal pain. Bottom line, we can then ensure that the cash flow of the business will not freeze up!

Surely that’s incentive enough to prepare a financial plan?