As business owners, we should follow the motto “think big“. There will come a time when, asking for a loan for your business, it is easier to get a larger amount than a smaller one, because the size of ideas does matter. But sometimes ideas sound small, and it is simply a matter of thinking big again.
That is what Richard Branson tells in his book Losing My Virginity, in a passage from his business life when Virgin’s finances were still not very strong and he had to use his ingenuity.
(See also: Richard Branson’s 10 best tips for success in business and in life)
It was 1992, and Virgin Atlantic, Branson’s airline, still had few aircraft, but passengers were happy with Virgin’s service. At that point Branson came up with the idea that every passenger could have their own television screen, something airlines did not yet offer in economy class at the time.
Putting an individual screen in the back of every seat on its aircraft would cost the company around 10 million pounds, money it did not have at the time and would have no choice but to ask the banks for.
But given the crisis at the time and falling profits at other companies in the Virgin Group, no bank would grant him the loan, and Branson admits that after so many refusals he was starting to give up.
But Branson has always applied a motto: “However difficult things get, you must always keep the widest possible perspective.”
Branson picked up the phone and called Boeing. He asked whether, if he bought 10 new Boeing 747-400s from them, they would be willing to install the individual TV screens in the seatbacks at their own expense.
Boeing’s chief executive was baffled that anyone was thinking of buying 10 aircraft in the middle of a recession, so he accepted the deal immediately.
Branson then called Airbus and asked exactly the same thing for the purchase of another 8 aircraft. They, too, accepted immediately.
All that remained was to go to the banks to finance the purchase of 18 new aircraft, a deal valued at 4,000 million pounds.
And in the end the banks decided to grant Virgin the loan, seeing a big expansion project from a company that intended to grow in the middle of a recession.
As a result, Branson gave Virgin Atlantic the most modern, newest and most innovative fleet in the whole industry, and he got the aircraft for a lower price than usual.
And Branson understood a reality: it is easier to be lent 4 billion than to be lent just 10 million, as long as the idea is ambitious.
That is why, when you sit down to negotiate a loan for your business idea, try to behave as if you were not asking for money but selling a project for the future, one that will make your company grow.
Read: “You’ll go to prison or become a millionaire”: Richard Branson did both
Featured image: Eddie Maloney from North Las Vegas, USA, CC BY-SA 2.0, via Wikimedia Commons.
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