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Monthly Archives: May 2017

Started Guide to Self Employment

How detailed a plan do you need before you jump in and get started? That depends on two things-the amount of risk you are taking and how much outside financing you need. For example, if you are a painter that has been employed by a reputable contractor and you want to start your own business by taking some additional jobs on your own, you aren’t taking much risk. As long as you verify that you are not putting your full-time income at risk, you may be able to just start taking jobs and plan as you go. When I started my coaching and consulting business, I used a personal credit line in an amount that I knew I could pay off to cover expenses. I did some planning to ensure that I would have a good chance of success and keep my expenses under budget. If you are planning a business start up that involves significant upfront investment, you will want a more detailed plan. Even if you plan on financing the business through personal loans, a second mortgage, or your own savings, you will want to know that you are investing your money wisely and developing a plan will help you be sure of this. If you are seeking outside investors or business loans that are not secured by your personal assets, you will need to convince investors or lenders to say yes to your request with a detailed, realistic and well-researched plan.

Business description

The description of your business is based on its mission, vision, and values. What will your business do and how will it generate income? Will you have employees? If so, what training, education or experience will your key employees need? Your description should clarify exactly what service or product(s) your company will offer and identify your target market. It should also indicate what business structure you will use and identify the key players in the company.

Market

After you have defined those basics, it’s time to discuss the market for your business. Who are your competitors and who dominates the market? Think about the unique strengths that will allow you to obtain a sustainable competitive advantage in serving the target market you identified above. In order to succeed, you will need to identify and build upon your unique strengths. You might want to perform a SWOT analysis to help you clarify your competitive position. A SWOT is simply a collection of lists-your strengths and weaknesses (things that are inherent to the business you plan to run) and your opportunities and threats (things that are external to your business) You should only list things that pertain to your business objective. For example, if you want to be a model, an attractive appearance would be strength. If you want to be a technical writer, your appearance is probably irrelevant. Once you’ve made your list, take it a step further. Clarify how you can use your strengths to counteract your weaknesses and take advantage of market opportunities to build a sustainable advantage over your competitors and develop a plan to overcome potential threats.

Financial

This is the most important piece of your plan. If your business is not profitable, it won’t work as a business! If it’s something you love, you can still enjoy it as a hobby. If it makes a difference in the world and you want to fund it, that’s fine. Just be realistic and recognize whether or not you can make a living out of what you plan to do. If you can’t-it’s better to know that up front.

You will start with a detailed listing of your start-up expenses. While expenses will vary depending on the type of business you plan to establish, common start-up expenses include legal work, logo and brochure design, training, and site selection and improvement. You will also include the available assets you will use to pay for start up expenses and the loans or outside capital that you will obtain. Start-up expenses, assets and funding all refer to what is needed and available before you actually start your business.

Then you will project your future income and expenses after you start doing business for the first year in a projected profit and loss statement. It’s important to be as accurate as possible here. Many businesses will operate at a loss when they first open because it takes time to build up a customer base and becomes established. That’s OK, if it’s part of your plan and you know how you will keep the business going. It’s not OK if you were too optimistic in your projections and can’t find the money to keep operating until the business starts turning a profit. When I studied for my MBA, we learned to game the system by starting with the numbers that we needed and adjusting the different income and expense numbers so the end result was a profitable “business.” That’s OK for the classroom, but it’s not really an effective or smart way to plan your business. If your projections show that the business is not likely to show a profit or that you can’t afford to fund it until it does, rethink your plan. Is there anything that you can realistically do to turn things around? If not, it’s better to look at a different business idea until you find one that works.

As you work on your profit and loss projections, give a detailed monthly forecast for the first year and quarterly forecasts for years two and three. Of course, these forecasts will change as your business grows and prospers, but they should be based on a realistic evaluation of the market and the competitive conditions your business faces. Be prepared to explain to lenders and investors where you will find your first clients and how you will establish and grow your customer base. In business, nothing happens until somebody buys something. Who will buy from you and what will you do to ensure that they keep buying?

Packaging the Plan

Congratulations! You’ve finished the hardest part of completing a business plan. If you’re a solo entrepreneur and you don’t need outside funding, you can stop planning and stop doing. If you need to convince lenders or investors to help you fund your business, you’ll want to take the time to present your plan in a professional format.. A good way to do this is to add a cover sheet and executive summary in front of the body of your plan. The cover sheet will identify your business and the key people involved in the business. The executive summary will briefly summarize your plan so an investor or loan officer can quickly determine whether or not they want to look at the details in the body of the plan. Obviously, you want the answer to be yes, so take the time to make your summary as compelling as possible. Then, attach supporting documents as an appendix at the end of the plan. This section would include things like tax returns for the owners that are funding the business and any documentation that supports your financial projections.

Business Plan Organization

A Business Plan is a business document; you are not writing prose. It should contain a precise and concise format and be organized into numbered Sections and Sub-Sections, which contain specific information in short, paragraph form. Plans should be produced in paper form, computer format and online format. Computer Format means the Plan is integrated into the Company’s Computer Network. It also means the Table of Content’s Sections are hyperlinked so you can easily navigate and access information on the Plan just by clicking on the links.

You should have your Business Plan uploaded securely, online (via login and password access) on your website so that Key Managers, Employees, Sales People, etc can access the information remotely no matter their location. You can have different versions available online for particular purposes, segregated by different logins and passwords. For Example, you can have your Sales Plan accessible remotely so your Salespeople can use it as a sales tool or update it with up to the minute feedback for the Sales Manager and the Marketing Department. Another example would be having your Funding Business Plan accessible online with versions for different audiences: bankers, venture capitalists, angel investors, etc.

Business Plan Sections

The Table of Contents is one of the most important parts of the Plan. The TOC should be very detailed and well organized so that the reader and user can find and access the information easily and quickly. You can write a great Plan with all the necessary information in it, but if the reader can’t easily find or access the information, then the Plan ceases to be a useful tool.

The TOC should be organized by each Section and Sub-Sections of the Plan with the corresponding page numbers. It is strongly recommended that your Plan be developed as an outline document, with all the Sections and Sub-Sections in the Table of Contents hyperlinked to the page where the information resides. This way the reader and user can access the information quickly and easily.

The Executive Summary should be written last. Why? Because it organizes and summarizes the entire Business Plan. You cannot achieve this effectively until all the other sections (2 through 8) of the Plan are completed. We suggest developing two renditions of the Executive Summary – a short version of 2 – 3 pages in length and a longer version of 5 – 7 pages. The short version should be written after the long version is completed, keying on the most significant information from the long version.

The Executive Summary gives the reader a quick overview of the important facts contained in your Business Plan. The long version of the Executive Summary can act as a standalone document to be used to succinctly explain your Business and generate interest in your opportunity, or products and services. For instance, the long version of the Summary can be sent to a Venture Capital Firm to generate and gauge initial interest, to be accompanied by your one-sheeters: Fact Sheet / Venture Overview / Investment Overview. If interest is indicated, you can send the VC Firm a custom tailored Funding Business Plan (customized to their particular investment requirements) which will contain the short version Executive Summary.

Brevity, yet completeness and inclusiveness, is key when writing your Executive Summary. It should be concise yet have adequate detail about your Business Plan. It may take several attempts to achieve this balance.

This section encapsulates who you are as a Company: the History, Structure, Ownership, Locations, Products and Services Summary, Strengths and Weaknesses, Performance, Customers, Trends, Company Assets and so forth. This section comes first in the Business Plan (following the Executive Summary) since it serves as an introduction to the necessary details and background of your company.

This section builds on the Company Section explaining in more detail who will run the company and how it will be run. You can have the greatest business idea but lack the right people to execute your Plan. Therefore, the Management and Operations Section is one of the most important elements of the Plan.

Writing Business Plan For Small Business

Press for Success

Far be it from me to dampen your enthusiasm, but you should give yourself every opportunity for success. That’s what the planning part of the process of creating your business plan will do. By the time you have pressed your way through it, you will not merely have some neatly arranged document to keep on file, you will have a working tool that addresses the essential factors that influence your future.

Besides, your friends may be 100% behind you in your new venture, but, in case you are hoping to involve others who have actual money to invest, you may need to be able to make a convincing case. Wouldn’t it be nice to have anticipated possible questions and be ready with plausible answers? If you are risking your own money, that is perhaps even a stronger reason to do some indispensable planning.

Easy Writer

If you are one who is intimidated by the blank page, never fear! There are several good software packages that will guide you through the process, such as Business Plan Pro Complete from PaloAltoSoftware. Business Plan Pro Complete walks you through the entire planning process and generates a complete, professional and ready to distribute plan with a proven formula for success. The planning wizard makes it a snap to get started since you simply answer yes or no questions to create your custom business plan framework. Bplans.com offers free business plan samples and how-to articles as well as a wealth of other information. It is definitely worth taking the time to checkout. Microsoft Office Online Templates also has a variety of free templates to use with their products. The wizard indicates the information you need and you fill it in as you go.

Business Plan Short cut

  • Why You Need a Business Plan

For start-up businesses, planning can make or break your business. As little as 20% of new businesses make it past their first year. A business plan will also help when you’re seeking financing from banks, as it clearly demonstrates your plans and intent. If you have a good business plan and stick to it, it’s hard to go wrong. For businesses that have been operating for a while, planning may not seem to be that important. Most business owners will have created some sort of business plan at the start but may not have updated it as the business has grown. By revisiting the plan you can incorporate new growth strategies and identify fresh opportunities. If nothing else, it’s a good chance to sit down and spend some time thinking about your business and your personal goals.

  • Getting Started Using Templates

If creating a business plan seems daunting, don’t worry. Microsoft has teamed up with a number of organisations to create lots of templates to help you get started. Visit Office Online to download a wide array of business templates for both new and existing businesses. Each template has of sections for you to complete, describing your company, products you will sell and so on. The majority of the content of a business plan is in narrative form. This is where you describe your business and plans, relying on Microsoft Word’s features. For financial content, including cost and revenue calculations, expenses and so on, use Microsoft Excel to enter and calculate figures. If you are not sure where to get started on the financial side of things, the Template Gallery even has financial templates that will help you create all kinds of useful documents.

  • Inserting Financial Information

To make life easier, Microsoft Office has a few tricks to combine both the business plan narrative and financials. To start, open the Word document that contains your plan and scroll to the section where you want financial information to appear. Then, open your Excel spreadsheet and select the range of cells you would like to paste into the business plan and select Copy from the Edit menu. Then, back in your Word document, select Pastefrom the Edit menu to paste the financial information into your document. You’ll notice that on the bottom right-hand side of the table of data you have pasted, there is an icon that looks like a clip board, with a drop-down menu. This is a ‘smart tag’. Click on the down arrow to open the drop-down list and select the option for Keep Source Formatting and Link to Excel.

This option will link your spreadsheet to your Word document so whenever you change or update the spreadsheet, the changes will be reflected in the document as well. This will enable you to keep your business plan up-to-date. As your revenue and costs change, your business plan will reflect those amendments with a minimum of effort.