Include Letters of Intent
Letters of intent are statements written by individuals or organizations declaring their intention to commit to something, typically to use or purchase a product or service, but also for other things.
A Letter of Intent can be appropriate for situations where you are not able to sign a contract. It can add valuable strength and credibility to your claims in the business plan. For example, you might build a sales forecast on the assumption that key clients will make regular purchases, even though no contract exists; a clear Letter of Intent from one or more key clients or customers will help you build your business case.
Unlike a letter of reference, it is okay to provide a template or suggested wording for the writer of your Letter of Intent. The people you approach will be busy, and unless they have written letters of intent before, they are unlikely to know exactly what you are looking for. I suggest you put together a generic Letter of Intent to provide to those who commit to doing one for you.
An effective Letter of Intent:
- Must include the date it was written, and it should be current, written on letterhead, and signed.
- Must come from a credible decision maker or person with the authority to honor promises made in the letter.
- Will be stronger if more specific, weaker if more general. In other words, it will help your business case if the writer states he or she will purchase an amount of goods or services within a specific time period. A general or vaguely written Letter of Intent doesn’t provide a banker with a strong foundation on which to base a decision.
