Session II

TEST QUESTION YOU MUST PASS TO START A BUSINESS

Q: What in the one thing a business must have to be successful?

A: __________________*

If you are just starting you business or have been going to for some time, a business plan can be your road map to success. The following outline can help you develop a plan for yourself or maybe it is time to get a business loan and this will be the firs step. Writing the business plan is risk-free and its main cost is your time. A plan forces you to take an objective look at your business and allow you to identify problem areas.

CONTENTS OF A BUSINESS PLAN

COVER PAGE

· Name of Business

· Address

· Phone

· Name of Owner(s) and percentage ownership

· Statement of Confidentiality and number for each plan

INTRODUCTION

· Name of business and business form (Corporation, sole proprietorship, etc.)

· Reason for writing the plan

· If you are applying for financing, list how muck, and list how the funds will be used

· List what funds you will invest

EXECUTIVE SUMMARY: Briefly (one or two pages) give the reader an idea of what the business does. Try to cover:

· What you do

· What will be unique or different

· Why you will be successful

· When do you plan to start

· How do you plan to implement your idea

MARKETING: Go into more detail on the most vital aspect of your business.

The Industry:

· What is important to know? Is it growing nationwide? In this area? Give statistics if possible.

· Explain if there is some reason why this business is particularly suited to this area

· Who are potential customers? (Age, sex, income, profession, etc.) Where are they located? Urban? Rural? Within a few blocks or a few continents? Are customers confined to one neighborhood, one town, a whole region, nationwide?

· Is this a fad? Is this seasonal?

· Does growth depend on some other factor like interest rates or the health of a related industry?

Competition: Examine your direct competition – discuss their strengths and weaknesses:

· Price, quality, location, reputation, experience, service, etc.

· Are there any substitutes (USAIR is direct competition for Continental while Greyhound, AMTRAK, and automobiles are substitutes)?

· What are the substitutes, strengths and weaknesses?

Satisfying your market. Explain how you plan to do this, ways may include:

· Superior quality

· A new twist on an existing product

· A more convenient location

· Discount prices

· A high level of customer service

How will you price?

· Discount, average or higher than competition

· High class, high quality, high price

· Price according to volume sold

· Make sure you justify your pricing and it fits your market

Where do you plan to locate your business? Explain why your location is an asset in terms of:

· Visibility

· Proximity to other businesses patronized by your target market

· Parking, if it is important to your businesses

· Home-based? - Why?

How are you going to get customers to buy?

· Advertising – in what, how often, how much?

· Promotion

· Publicity

· Sales Force

Sum up just why and how you will be better than your competition and be the major business success that you aspire to be.

OPERATIONS: This section depends on the type of business. The reader must understand how the business will work. What are the hours of operation, staffing needed, inventory volumes, etc.

MANAGEMENT: Who will actually run the business? Assuming it is you, explain why you are so qualified.

Discuss:

· Educational or business background

· Technical training

· Management experience

· Prior work experience

Employees:

How many?

· Full or part time?

· What will they be paid – amount, salary or commission?

· What will they do?

· Are there any benefits?

· Are special qualifications needed?

FINANCIAL PLAN: Here is where you justify the words of your plan with dollars.

Cash Flow projections

· First year by month

· Next two years in total or quarters

Profit and Loss Statement

Balance Sheet

· Each of the first 3 years in total

This looks like a lot of work, and it is. But writing the plan is a lot less work than running the business. No decision involving this much money and time should be made lightly. If you’re going to do it make sure its the RIGHT thing to do and do it RIGHT

* Customers. You must have customers and hopefully lots of them to make your business a success.

This content may be copied in full, with copyright information intact, without specific permission, when used in a not-for-profit format. If other use is desired, permission in writing from Coach Fayerweather is required. mailto: lindafay@lindafay.com.

Cheshire Puss,” she began, rather timidly . . .”Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where¾” said Alice. “Then it doesn’t matter which way you go,” said the Cat “¾so long as I get somewhere,” Alice added as an explanation. “Oh, you’re sure to do that,” said the Cat, “if you only walk long enough”. Lewis Carroll, Alice in Wonderland
Would you drive to Florida without a map? Would you buy a car without test driving it? Would you wait until you’re sick to get insurance? If you answer NO to these questions, you are ready to develop a business plan. Bankers require them to lend businesses money, investors will not even talk to you without one, and your business really, really wants one! Here are the steps to develop a basic, one page, dynamic, working business plan. Vision Vision statements should stimulate thinking, communicate passion, and paint a very graphic picture of the business you are growing. *How do you visualize your company in the future?* Mission Mission Statements always answer the question, "Why will customers buy this product or service?" Why does this business exist? Objectives Objectives clarify what it is you are trying to accomplish in specific, time measurable goals. What accomplishments must this business achieve within one year to be successful? Strategies Strategies set the direction, philosophy, values, and methods for growing and managing your company. *How will this business grow and be managed over time?* Plans Plans are the specific actions the business must implement to achieve the objectives. Often there will be a more detailed plan to support these specific plan statements (marketing plan, sales plan) *What specific projects and actions will be taken this year to achieve the objectives?* That’s It! If you can succinctly answer these questions, you will be on the path to a workable plan for your business. From this point you can develop a fiscal plan, sales goals and profitability goals to use as benchmarks on your road to success.