Evaluating Each ProspectHome > Free Business Articles > Evaluating Each ProspectOnce you understand the type of person the prospect is and how they prefer to do business, you'll be better able to craft an appropriate proposal. The two cards you want prospects to bring to the table are their experience with business investing and comfort with the idea of mixing money and relationships. If your prospect has ever been involved in some form of financial investing, such as: making other private loans or investments, have started a business, worked in a senior position or invested in the stock market, consider him or her savvy. If the prospect has not done any of these things, consider him or her inexperienced. In this case you will have to explain your request more clearly to inexperienced prospects and educate them thoroughly about the potential risks and rewards of investments. Would your prospect be able to separate business from personal and have no problems making an investment as a business transaction without considering it part of your personal relationship? If your prospect doesn't appear worried about mixing money and relationships, consider him or her analytical. If he or she fears that providing money for your venture could damage your relationship, consider the prospect worried. There are four main type you can divide your prospects into:
Each type of prospect needs to be handled differently. With savvy and worried prospects, you need to alleviate their sense of emotional risk. Carefully explain your plan for repaying the investment, including your month-by-month obligations and how you handle any missed or late payments. With savvy and analytical prospects, present your request with the utmost professionalism. Include a detailed explanation of how the investment will play out and what kind of return you're offering. Make the investment process as easy as possible.
With an inexperienced and worried prospect, carefully consider whether it's even possible to alleviate the risks from this prospects perspective. If you decide it's worth approaching the person, explain that the best way to protect your personal relationship is to make the agreement almost as if you were strangers - set it up and manage it in a businesslike fashion, with signed legal documents and a re-payment schedule. (You probably won't encounter many inexperienced and analytical prospects - they are rare).
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