small business resource

Blueprint For A Comprehensive Business Plan

Getting started in a new business requires a lot of work, not the least of which
is planning. Although many business owners claim to little or no formal
planning, even the most intuitive of them have some idea of what they’re trying
to accomplish and how they hope to do it. However all successful entrepreneurs
know that planning is essential to success.

No amount of hard work can
turn a bad idea into a profitable one: The health food store in the meat and
potatoes neighborhood and the child care center in a retirement community are
probably doomed from the beginning.

Planning forces you to think ahead.
Before you rush in to supply a product, you need to be sure that a market
exists. You must also try to foresee some of the problems that might arise and
figure out how you will deal with them.

One of the first steps you should
take toward starting a new business is to develop a business plan, a written
document that summarizes and entrepreneur’s proposed business venture,
communicates the company’s goals, highlights how they plan to achieve those
goals, and shows how consumers will benefit from the company’s products or
services.

Preparing a business plan serves two important functions:
First, it guides the company operations and outlines a strategy for turning an
idea into a reality. And second, it helps persuade lenders and investors to
finance your business.

Although a business plan has a simple and
straightforward purpose, it still requires a great deal of thought. For example
before you open your doors, you have to make important decisions about
personnel, marketing, facilities, suppliers, and distribution. A written
business plan forces you to think about those issues and develop programs that
will help you succeed.

If you are starting out on a small scale and using
you own money, you business plan may be relatively informal. But at a minimum,
you should describe the basic concept of the business and outline its specific
goals, objectives and resource requirements.

A formal plan, suitable for
use with banks or investors, should cover these points:

- Summary
In
one or two pages, summarize your business concept. Describe your product or
service and its market potential. Highlight some things about your company and
its owners that will distinguish it from its competition. Summarize your
financial projections and the amount of money investors can expect to make on
their investment. Be sure to indicate how much money you will need and for what
purpose.

- Mission and Objectives
Explain the purpose of your business
and what you hope to accomplish.

- Company and Industry
Give full
background information on the origins and structure of your venture and the
characteristics of its industry

- Products or Services
Give a complete
but concise description of your product or service, focusing on its unique
attributes. Explain how customers will benefit from using your product or
service, instead of those of your competitors.

- Market and
Competition
Provide data that will persuade the investor that you understand
your target market and can achieve your sales goals. Be sure to identify the
strengths and weaknesses of your competitors.

- Management
Summarize
the background and qualifications of the principle, directors, and key
management personnel in your company. Include resumes in the appendix.

-
Marketing Strategy
Provide projections of sales and marketing share and
outline a strategy for identifying and contacting customers, setting prices,
providing customer services, advertising, and so forth. Whenever possible,
include evidence of customer acceptance, such as advance product
orders.

- Design and Development Plans
If your product requires design
or development, describe the nature and extent of what needs to be done,
including costs and possible problems.

- Operations Plan
Provide
information on the facilities, equipment and labor needed.

- Overall
Schedule
Forecast development of the company in terms of completion dates for
major aspects of the business plan.

- Critical Risks and
Problems
Identify all negative factors and discuss them honestly.

-
Financial Projections and Requirements
Include a detailed budget of start-up
and operating costs, as well as projections for income, expenses, and cash flow
for the first 3 years of business. Identify the company’s financial needs and
potential sources.

- Exit Strategy
Explain how investors will be able
to cash out or sell their investment, such as through a public stock offering,
sale of the company, or a buyback of the investor’s interest. When covering
these points, keep in mind that your audience wants short, concise information –
not lengthy volumes – and realistic projections for growth.

For more
information on starting a business and writing up a business plan, check out the
Small Business Administration Website at http://sba.gov

Keep in mind
that sometimes the greatest service a business plan can provide an entrepreneur
is the realization that the concept just won’t work. Discovering this on paper
can save you tons of time and money.

About the Author

Tanner Larsson is a veteran entrepreneur and the publisher of the award
winning Work At Home Success Newsletter. Subscribe to his newsletter and recieve
4 EXCLUSIVE Bonuses valued at
$276. www.work-at-home-resource-center.com

Filed Under: Business Plan Tagged With: business plan, how to write a business plan, small business management, small business resource, start a small business

Business Plan – Extended

A business plan defines your business, identifies your goals, and serves as your company’s resume. The main components include a current and future (pro forma) balance sheet, a current income statement, and a cash flow analysis of your business. This will help you to allocate business resources properly, to handle unforeseen events, and to make good, solid business decisions. Because the business plan provides specific and detailed information about your company and (as an example) how you will repay a loan, a good business plan wil be a crucial part of any loan application at a bank. Additionally, it will inform your sales personnel, your suppliers, and other 3rd parties about your operations and business goals.

The importance of a comprehensive, detailed business plan can’t be overemphasized. Many important things depend on it: external funding, credit lines from suppliers, management of your operations and finances, promotion and marketing of your business, and finally achievement of your goals and business objectives.

If you are tempted to start a business without having a business plan, you will be very likely in trouble running a successful operation. A business plan is like a blue print of your business. Imagine a builder who starts building your new house without having a blue print. Writing these things down, is not the most fun event a new business owner wants to do. Make sure you spent the time and research to create a solid business plan.

Before you begin writing your business plan, consider four important questions:

What service or product does your business provide and what needs does it try to fill?

How will you attract your potential customers?

Who are the potential customers for your products and/or service and why should they purchase it from you?

Where will you get the financial resources (cash, loan, etc.) to start your business?

How does a business plan looks like?

1. Cover sheet
2. Statement of purpose
3. Table of contents

-> The Business
A. Description of your business
B. Marketing Strategy and Plan
C. Who is your competition
D. Operating procedures
E. Personnel / Staff
F. Business insurance

-> Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow

-> Additional Documents
- Tax returns of principals for last three years Personal financial statement (available at your local bank)
- For franchised businesses, a copy of the franchise contracts and all supporting documents provided by the franchisor
- Copies of letters of intent from suppliers, etc. (if available)
- Copy of proposed lease contract or purchase agreement / contract for office space
- Copy of all business licenses and other legal documents (if related to the business)
- Copy of resumes of all principals / company officers

If you start a new business and do not have financial data going 3 years back, you can substitute this with solid statements of your current situation. Described above is the ideal case – adjustments need to be made if necessary. Be detailed – it’ll be to your own favor. Ask your bank so that you can work with their small business specialists. Regular tellers might be friendly, but you want to make sure that you get decent information.

What makes a good business plan?

Is it the length of a business plan? The information it contains? How well it is written, or the brilliance and excellence of the strategy it describes?No.

A business plan will be very difficult to execute unless it is simple, very detailed, realistic and complete. Even if the business plan has all the items listed, a good business plan will need someone to follow up with and check on it, too. The plan also depends on the human elements it’s build on, particularly the process of commitment and involvement.

Successful implementation for your business starts with a good business plan. There are several elements that will make your business plan more likely to be successfully implemented.

Is the plan simple and easy to understand and to act on? Does it communicate its contents easily and practically and is it making sense?

Is the plan specific and detailed? Are its objectives concrete and measurable? Is the plan realistic? Are the sales goals, the expense budget, and milestone dates realistic? Nothing prevents implementation more like unrealistic business goals. Can you achieve your set goals?

Is the plan complete at all? Does it include all the necessary elements to be successful? Requirements of a business plan may vary, depending on the actual context. There is no guarantee, that the plan will work as planned if it doesn’t cover the main bases.

Preparing the business plan has to be an organized, logical way to look at all of the important aspects of a business. Don’t use a business plan to show how much you know yourself about your business. Nobody will read a long-winded, too detailed business plan: not your bank, nor venture capitalists. Years ago, people were favorably impressed by long business plans. Today, nobody is interested in a business plan that is more than 40 or 50 pages long. Don’t waste your time and the time of others by writing a book. Write a business plan that impresses and that is short-while.

Do I need a business plan if I’m not seeking financing?

For your small business to succeed, you need to know where you’re going and how you’ll get there. Creating a business plan forces you to set your own goals, determine the resources you will need to execute your business plan, and to foresee problems that might otherwise broadside you and would prevent you from being successful.

If your business plan is not being used to solicit funding you can create an informal plan only, that serves primarily as a planning tool for yourself and a tool that will keep you on track. An informal plan can also be used to be shown to potential business associates and partners.

How do investors and bankers read a business plan, and what do they look for?

Don’t expect every person you will give your business plan to read it thoroughly. In fact, you really can only count on them to skim it. Investors and bankers know what they’re looking for in a business plan – they want to see a business that will grow rapidly and someday return a handsome profit. Bankers want to see a business that will be able to pay off the loan they are granting. Venture capital firms, for example, expect to receive an average of five times their original investment within 5 to 7 years.

Keep in mind that investors rarely put money into a “product” — they invest in a business. Many great products have floundered because the inventors did not understand how to get people to buy them. So be sure to show that you understand how to market your product or service. If your banker does not understand your business model, he will not grant you the loan you are looking for.

How long should my business plan be?

30-40 pages should suffice. Anything longer than that and you risk alienating a potential investor, or you force them to skim through the document rather than read it. You won’t be impressing anyone by creating a 200-page document – what’s contained in the plan is much more important than how long it is. The more concise, detailed, and readable your business plan is, the more focused your business will appear. Focus on those details that tell your business’ story, that set you apart from your competition, that make your business appear to be a good, solid financial investment, and that show you will be profitable.

With the fast changes taking place in industry and society, how can a business plan be helpful if it is quickly outdated?

A well written and researched business plan will not only prepare your company for today’s business and market conditions but tomorrow’s unforeseen events. All business plans should have a contingency section to accommodate for the future. Your business plan is a plan that will not just sit on the shelf for 12 months but will always be updated when new market conditions or strategic changes take place. Plan your changes thoroughly. Running a business requires patience – making changes too often and to fast might result in your business going down faster than you can re-write your business plan.

Do the readers of my business plan need to sign a non-disclosure agreement?

A non-disclosure agreement can raise red flags with your intended audience. A seasoned banker or investor is bound by client confidentiality and may find a NDA insulting. Secondly, if the business needs to protect its ideas and concept at this stage of the game than there may not be any barriers to entry for others to enter the market. A simple confidentiality clause at the front of the plan should suffice. If you are selling your business or if you are seeking a strategic alliance/partnership, a non-disclosure may be necessary. If in doubt, consult with your lawyer.

Filed Under: Business Plan Tagged With: business plan, how to write a business plan, small business management, small business resource

Becoming Wise – Wild & Free – Writing A Successful Business Plan

So you’ve decided to write your own business plan because you know the value that the experience will give you. With the books and software that are out there today you can probably sit down and complete the plan in a day or so, right? Plug in the numbers, add the notes, write the whole narrative (story), print it and get it out to the banks or investors.

If you can complete a plan in a day or so you are either an expert, that has already done all of the research, or you are heading for big trouble, because you have not done enough research. If you are like most people you have a job, a family and commitments that take up a lot of time. It would be impossible to write a business plan that quickly, even if you know your stuff. You have probably heard the old adage, ‘Rome wasn’t built in a day’ well, neither was a good business plan. To create a top quality business plan you need to research each and every aspect as diligently as possible. Take your time and think of everything, don’t leave anything to chance.

That sounds like a lot of work and a long drawn out process. How will you remember or even think of everything? How can you keep track of what you have to research? If you have to set your plan aside for a while, how will you remember where you left off? You may get tired, bored and even careless in your efforts because like most people you probably have Attention Deficit Disorder when it comes to doing this type of work.

The answer is to do your plan in steps. A good guide book or business plan software will ask you to complete work as you go, one step at a time. You read a section, do some research on the items(s) in the section and enter the information that you discovered. This way you are focused on each item as you go and never become overwhelmed. You will also be able to remember where you were when you have to set the plan aside for a few days, without having to re-read a novel. The process may still seem long but if you concentrate on doing your plan in steps it will be done before you know it.

This series of articles has been written in steps because most people don’t have the time to sit down and read a novel. You can even do your financial projections in steps, which is where I recommend that you start. Doing the projections will help you analyse the feasibility of your project before you spend a ton of time writing a complete plan that may or may not work for you.

About The Author
Written by Rod Francis – President of Advantage Venture
Systems Inc. creators of the Venture Planning System(tm)
Pro business plan software @ www.VPSpro.com
Suite 207, #1-1081 Central Ave. N.,
Swift Current, SK Canada S9H 4Z1
Check for more articles on writing a business plan at:
www.vpspro.com

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business resource, start a small business, starting a small business

Computer Consultant 101: How to Build a Stable Business

Know How To Bill and What to Charge

Without knowing how to bill and what to charge, you’re going to lose a lot of money that’s really yours. If you get your billing and pricing wrong as a computer consultant, you’ll send a bad message to people that you’re trying to quote for business.

You’ll be screaming that you’re a rank amateur rather than a skilled computer consultant. It could take you years to recover from this. A lot of times you would need to scrap existing clients and completely start over because certain clients you brought in at the wrong level.

Perform IT Audits

If you know how to do them right it’s an incredibly powerful technique. You get paid to write proposals and do needs assessment work. If you don’t know how to do this you’re going to wind up doing a lot of exploratory work for free. You can actually get paid for your initial consultation time for doing the technology assessments and the IT audits.

Build Local Partnerships

You’ll need partnerships as your computer consultant business evolves. These will get you some of your best clients along the way. If you don’t have good local partnerships, you can almost guarantee that you’ll lose clients along the way with this as well. You need to learn how to find these key players and how to negotiate with them.

Exceed Client Expectations

If you want to get paid the big bucks as a small business computer consultant, your clients will expect a lot from you. Your clients’ idea of perfection may be different from yours. You need to learn the magic words you need to know to avoid a lot of the stress and intense pressure. You want to come out smelling like a rose to exceed their expectations.

Maximize your Utilization Rate and Profitability

Making as much of your work-week billable as possible and eliminate a lot of the non billable, time-draining non revenue draining computer consultant activities. It’s all about delivering small business virtual IT services and how to build a stable business; how to get clients for life.

Joshua Feinberg helps small business computer consulting firms get more steady, high-paying clients. Learn how you can too. Sign-up now for your free access to a one-hour audio training program on Small Business Computer Consulting Tips.

Filed Under: Miscellaneous Tagged With: business startup, small business resource, start a small business

Intellectual Property Law 1

Intellectual Property Law

Intellectual Property Law can be quite confusing at
times. Copyrights, trademarks and patents all have a role in protecting
your hard earned content and knowing their role is half the battle.

Intellectual property in itself refers to the creations of the mind, including
such things as: artistic works, literary works, inventions, names, images, symbols,
and designs used in commerce. In other words, the intellect that is the
possession of an organization or an individual is considered intellectual
property.

Intellectual property is divided into two categories, copyrights and industrial
property.

Copyrights give the authors of an exclusive work, exclusive rights to that work
for a limited amount of time. Copyrights cover such literary and artistic works
as novels, poems, plays, films, songs and other musical works, artistic works
(drawings, paintings, sculptures and photographs) and architectural designs.
Copyrights, which must be renewed periodically, allow the creators of a piece
of work, the opportunity to benefit from that piece of work.

Industrial property includes patents, trademarks, industrial designs and
geographic indications of source.

Patents give the inventors of a new product, a certain (limited) amount of time
in which he/she may prevent others from making, selling or using the invention
without authorization.

A trademark is an intellectual property protection which is used to protect the
distinctive features that distinguish one product from another. Those features
can include such things as: symbols, colors, brands, names, sounds, smells,
shapes, and signs.

Fortunately, Intellectual property laws benefit the creator of a property, by
rewarding that creator for his/her innovation and creativity. Also, society as
a whole benefits from intellectual property laws, by the fact, that these laws
encourage creativity, therefore allowing the rest of us to benefit from the
wide range of products and services that are produced.

Any violation of a trademark, patent or copyright could constitute the grounds
for an intellectual property lawsuit. If you feel that you have been victimized
it would be wise to consult a qualified attorney in your area. Find an attorney
or law firm, which specializes in intellectual property law. Know your
rights and protect them accordingly.

About the author:

Joe Regan writes articles for many major websites including but not
limited
to: www.hugesettlements.com, www.nurseuniverse.com,, Intellectual Property Law
and www.bubbajunk.com. Joe can be
contacted
at jregan@verticalag.com.

Filed Under: Miscellaneous Tagged With: business startup, small business resource