Part Three of Preparing A Business Plan That Guarantees Profits
June 3, 2008 by Glenn
People becoming involved with any new venture want to know that the person in charge - the person running the business knows what he’s doing, will not lose his cool when problems arise, and has what it takes to make money for them.
After showing the “muscle” of this person, go on to outline the other key positions within your business; who the persons are you’ve selected to handle those jobs and the sources as well as availability of any other help you might need.
If you’ve been in business on any kind of scale, the next chapter is a picture of your financial status - a review of your operating costs and income from the business to date. Generally, this is a listing of your profit & loss statements for the past six months, plus copies of your business income tax: records for each of the previous three years the business have been an entity.
The chapter on the explanation of your plans for the future growth of your business is just that - an explanation of how you plan to keep your business growing - a detailed guide of what you’re going to do, and how you’re going to increase your profits.
These plans should show your goals for the coming year, two years, and three years. By breaking your objectives down into annual milestones, your plans will be accepted as more realistic and, be more understandable as a part of your ultimate success.
Following this explanation, you’ll need to itemize the projected cost and income figures of your three-year plan. It’ll take much research, and undoubtedly a good deal of erasing, but it’s very important that you list these figures based upon thorough investigation.
You may have to adjust some of your plans downward, but once you’ve got these two chapters on paper, your whole business plan will fall into line and begin to make sense. You’ll have a precise “map” of where you’re headed, how much it’s going to cost, when you can expect to start making money, and how much.
Now that you know where you’re going, how much it’s going to cost and how long it’s going to be before you begin to recoup your investment, you’re ready to talk about how and where you’re going to get the money to finance your journey. Unless you’re independently wealthy, you’ll want to use this chapter to list the possibilities and alternatives.
Make a list of friends you can approach, and perhaps induce to put up some money as silent partners. Make a list of those people you might be able to sell as stockholders in your company - frequently you can sell up to $300,000 worth of stock on a “private issue” basis without filing papers with the Securities and Exchange Commission.
Check with a corporate or tax attorney in your area for more details. Make a list of relatives and friends that might help you with an outright loan to furnish money for the development of your business.
Then search out and make a list of venture capital organizations. Visit the Small Business Administration office in your area - pick up the loan application papers they have - read them, study them, and even fill them out on a preliminary basis - and finally, check the costs, determine which business publications would be best to advertise in, if you were to advertise for a partner or investor, and write an ad you’d want to use if you did decide to advertise for monetary help.
With a listing of all the options available to your needs, all that’s left is the arranging of these options in the order you would want to use them when the time comes to ask for money. When you’re researching these money sources, you’ll save time by noting the “contact” to deal with when you want money, and whenever possible, by developing a working relationship with these people.
In your documentation section, you should have a credit report on yourself. Use the yellow pages or check at the credit department in your bank for the nearest credit reporting office. When, you get your credit report, look it over ant take whatever steps are necessary to eliminate any negative comments. Once these have been taken care of, ask for a revised copy of your report and include a copy of that in your business plan.
If you own any patents or copyrights, include copies of these. Any licenses to use someone else’s patent or copyright should also be included. If you own the distribution, wholesale or exclusive sales rights to a product, include copies of this documentation. You should also include copies of any leases, special agreements, or other legal papers that might be pertinent to your business.
Lastly, write out a brief, overall summary of your business - when the business was started, the purpose of the business, what makes your business different, how you’re going to gain a profitable share of the market, and your expected success during the coming 5-years…
The last page of your business plan is a “courtesy page” listing the names, addresses and phone numbers of personal and business references - persons who have known you closely for the past five years or longer - and companies or firms you’ve had business or credit dealings with during the past five years.
And, that’s it - your complete business plan. Before you send it out for formal typing, read it over once a day for a week or ten days. Take care of any changes or corrections, and then have it reviewed by an attorney and then, an accountant. It would also be a good idea to have it reviewed by a business consultant serving the business community which your business will be related. After these reviews, and any last-minute changes you want to make, it’ll be ready for formal typing
.
Hire a professional typist to type the entire plan on ordinary white bond paper. Make sure you proofread it against the original. Check for and correct any typographical errors then again - read it through for clarity and the perfection you want of it.
Now you’re ready to have it printed and published for whatever use you have planned for it - distribution among your partners or stockholders, as the business plan for putting together a winning financial proposal, or as a business operating manual.
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