Imagine a small business owner meeting with potential investors in hopes of securing a new round of funding. He’s a nervous wreck from the moment he gets up. By the time he makes it to the meeting, he’s visibly shaken and finds it difficult to make his presentation. What do you think the results of that meeting will be? He’s probably not going to get those business loans he’s after.
Running a business is a tricky thing. It is tough to succeed if you’re timid, that’s for sure. Yet at the same time, no one likes a cocky business owner who believes he holds the world in his hand and finds it necessary to let everyone else know. The trick is to find the right balance between confidence and humility.
It’s not easy but showing the right amount of confidence could actually help our fictional business owner obtain financing. The right amount of confidence opens the door to business loans, private investment, and more. Keep reading to learn how.
Confidence Amplifies Vision
Lenders expect applicants looking for business loans to demonstrate some sort of vision for where they want their businesses to go. A business owner with no vision doesn’t appear to have a valid use for financing. That’s were confidence comes in.
A confident business owner is able to properly articulate his or her vision. That leads to vision amplification. In other words, the business owner who can articulate his or her vision well passes that vision on to lenders and investors. The vision gets amplified every time it is passed on.
Confidence Breeds Enthusiasm
Successfully applying for business loans requires doing more than just demonstrating a low-risk profile. Business owners have to get lenders excited about what they are doing. Without that excitement, the loan officer is just looking at another applicant with his hand out.
Confidence is key here because it breeds enthusiasm. A confident business owner is also an enthusiastic business owner. Her enthusiasm will rub off on loan officers and investors as long as he presents his vision with the same confidence and enthusiasm that he shows his customers.
Confidence Encourages Trust
Vision and enthusiasm notwithstanding, entrepreneurs looking for business loans still have to deal with the trust issue. No bank or equity investor wants to put money into a venture that seems too risky. It is up to the business owner to convince lenders he can be trusted. Confidence helps here too.
A confident attitude tells lenders the business owner knows what he is doing. It makes lenders more confident that he actually has a plan worth looking at. In essence, the right amount of confidence says to lenders, “trust me, I’ve got a winning formula here.”
Confidence Facilitates Discussion
Meetings between lender and borrower always include discussion of some sort. The question is, what direction will that conversation take? A business owner who appears to lack confidence will encourage a negative discussion framed around questions like, “are you sure you can really afford this loan?”
On the other hand, a business owner who exudes the proper amount of confidence facilitates a positive discussion. Rather than trying to allay their own fears, lenders start asking questions of possibility. Instead of focusing on what they could potentially lose, they want to know what they have to gain from lending.
Be Careful of Overconfidence
You have learned how confidence can help obtain business loans, now consider how it might work in the other direction. It is possible to be so confident that lenders are actually turned away. Remember that cocky business owner you read about earlier? He has a real problem.
Exhibiting overconfidence can give the impression that a business owner is arrogant. Believe it or not, arrogance is a financing killer. Lenders know that arrogance is a quality that encourages people to make bad decisions. It is a quality that engenders unnecessary risks. That’s why it’s important to find the right balance between confidence and humility.
The right amount of confidence can be a game-changer for the entrepreneur looking to obtain business loans. Confidence in the entrepreneur breeds confidence in the lender, thus facilitating a relationship more friendly to business financing.