How To Write A Business Plan

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My potential business partner asks me to write a business plan. In the business plan, I am required to write how much money is required and what effect that each investment will bring about respectively. But I feel it is difficult to predict exactly what effect that each investment will bring about respectively, especially web site promotion. How can you predict it, especially you are facing a new field that almost no one has done it before?

Best Answer

Most people have two balls neither of which are crystal! You should not be looking for predictions unless you business is fortune telling. Americans call it forward looking statements and we tend to say forecasts or estimates. Estimates I feel is the better term. If you are doing it for your own benefit it would best to be conservative, alternatively you could do two or three with different scenarios. Excel will come in handy here. A very succesful friend of mine said he always calculated his interest rate as 3x the current bank rate for his estimates. I am sure you understand the concept of discounting future money flow. No one can predict things like future orders but I am sure your partner will have his own ideas and will adjust your forecasts to his own. It is difficult,as you say to predict future statistics from websites (all you can do is go from historic data from your data logs, and it is difficult to get this sort of information from competitors. See Alexa rankings?However, as you know once you get visitors/sales the numbers can only go up if you keep developing the site as you have done in the past. Don't skimp on the investment. If you are in a competitive environment you really need to "go large" with your injection of capital. A website is a bit like mail order. There is a correlation to the number of orders to the funds invested. But I am sure you know all this. We hav just raised £2m for a local directory website. The company will be looking to raise much more money in 6 months time. How much money/access to money has he? It may be better to tailor the money to the plan.

I have one of the Matthew Lesko books, and see some possibiliites for small business grants. They all ask for a formal business plan in order to apply. I have everything set up in my head, but don't know the format to write one.

Best Answer

Keep in mind that if your potential business doesn't contribute to the betterment of mankind...grants are hard to come by. Also, SCORE is invaluable in that old school retired business people give you advice and direction. And last but not least, the SBA stinking blows. They tout how they help small business, minorities, women, etc... but from personal experience, you need to have mass collateral to get SBA backing. I went to open a salon. I had an immaculate business plan that I developed with SCORE and the Small Business Development Center at the local level. My credit score was 780. I owned 2 houses with approximately $100,000 equity between the two of them. I had over $60,000 in savings, a 401k, iras, stocks, bonds, etc. Net value far exceeded what was "required". I didn't want to use my savings or refinance my houses to open a salon. I wanted to borrow $125,000. Because I was not buying the building in which I opened my salon, I was turned down by 10 stinking banks - all telling me that if I'd buy the building (yeah right...it's a huge strip mall) that they back me because THEN and only then, would they feel as though I had the proper type of collateral to make them comfortable. Oh - and they would only lend me $250,000 or more toward buying the building to establish my salon. WTF? Long story short, I used my own savings for my buildout, leased my equipment and told the SBA to freaking bite me. Been in business 5 years, I paid off all my leases after 2.8 years and myself back the buildout money the following year - and all profit is now mine. When I first started my research and my business plan, an accountant told me that less than 1% of all businesses that ask for SBA backing get it. I didn't believe him then, but after being 86'd by 10 top banks, I believe him now...Phuck the SBA. If I can do it on my own, anybody can.

Will I need it for anything else besides applying for loans? I have an outline, but not a "formal" business plan written out.

Best Answer

A business plan is more than just for financing, it provides structure for 1 and 5 years. If you happen to either save in one area or overspend. The first 5years are crucial you may go almost one year without showing a profit. Here are some other things you might want to consider: How are you listed? Sole Proprietor, S Corp, C Corp LLC How are you doing your bookkeeping, receipts, invoices. are you adequately staffed? Do you have the right insurance in place? Legal Counsel? Document review, handle questions at an affordable price? Marketing advice? Human Resource questions answered? Free listing to get your company the exposure needed from others? If you need a resource or website to help let me know? I just want to make sure you have a good chance to succeed.

Any advice on how to write a business plan for being a promoter of communication trainings to companies. In other words, I would be recruiting businesses companies, and promoting and setting up communication trainings. I appreciate any advice.

Best Answer

Go to http://www.sba.gov , http://www.score.org or http://www.bplan.com for instructions on how to write a business plan and sample business plans.

I am a start-up business baking pastries and cakes in my home. I have seen sample business plans and my business does not have a projected revenue yet. I am told by others write a business plan. All of the plans I have seen have large financial projections.

Best Answer

You will need a business plan if you will use it to: - Support a loan application - Raise equity funding - Define objectives and describe programs to achieve those objectives - Create a regular business review and course correction process - Define a new business - Define agreements between partners - Set a value on a business for sale or legal purposes - Evaluate a new product line, promotion, or expansion You will get a lot of advice that a business plan is needed. However, what you need is the process that a business plan entails -- that is, the process of thinking through the business. It will help if you follow the outline of a business plan -- e.g. defining your business, determining your unique selling proposition, identifying your target market, determining how you will market the business, knowing how much you need to launch the business successfully. If you will not use it to apply for a loan or find an investor, you need not write your business plan. There was an article from the Wall Street Journal that questioned whether a startup really needs to write a business plan and this is one of the studies they found http://startup.wsj.com/columnists/enterprise/ 20070110-spors.html -------------------------------------- A study recently released by Babson College analyzed 116 businesses started by alumni who graduated between 1985 and 2003. Comparing success measures such as annual revenue, employee numbers and net income, the study found no statistical difference in success between those businesses started with formal written plans and those without them. The study concludes that "unless you need to raise external start-up capital from institutional sources or business angels, you do not need to write a formal business plan." -------------------------------------- You don't need a written formal business plan to succeed. However, you need to understand your business and know how to navigate the market in order to succeed