Your investment upfront to develop your product or service, get staff on board, get premises up and running then launch and market your business are heavy costs - and all of this is well before you make your first sale (and then it may take 2 months to get the cash off the customers you have made those sales to).

So when starting out you are financing your initial cashflow until you reach a fair momentum with your turnover.

But how do you know what that initial investment is going to be and how do you approach banks ?

Well before you even think of calling your bank manager to discuss the situation you should have developed your business plan. When going through your plan to highlight your target customers, your overall objectives and marketing strategy - these will show you some of the costs. Of course the most important element is your financial plan and this is the section to pay most attention to because this section is the one that will get most attention from your bank manager.

Once you have developed your business plan it's a good idea to get someone to check it over for you. If you know someone who has accounting knowledge then so much the better.

So onto tackling the bank. Before telephoning your bank and arranging your first appointment, develop an "elevator" pitch in case you get asked about your business. Write down 2 or 3 paragraphs about your business and ideas, why people will buy your products or services and not your competitors, what your turnover and profits are going to be over the coming years, and the exact amount you will be looking to finance your initial cashflow.

Then you are ready to phone your bank. If you already know someone at the bank then talk to them. If this is your first call, ask to speak to the business finance person. You will get through to the right one. Say to them that you are starting a new business in the next (month), you have your business plan developed and you want to come in and talk to someone about a business loan.

The fact you have your business plan ready will impress them. Arrange the meeting and prepare for it. Before you hand up ask the person what they are looking for from you. They will almost certainly want to see something specific to that bank. Maybe a special format , or some paperwork (eg: business incorporation). By asking them they will see that you are serious. And then when you meet them you will have exactly what they are looking for to hand.

Before you meet with them copy your plan 4 times. That means you and the bank have a copy and if someone else joins the meeting you can provide additional copies as well. If you have everything on a PC then take your laptop so you can change the finances you have forecast at the meeting if required.

If by some slim chance you get turned down for your loan then you must ask why. Don't just leave the meeting despondent not knowing why you haven't got your loan. It may be something simple you can fix.

Follow the above and I am sure you will have success getting your business finance.