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Business PlansBy the Numbers
Business Planning By the Numbers
Mark Lieberman
Get the Most For Your BUSINESS
Here is what SCORE offers to youFree of CHARGE:
*A confidential, business counseling session with a SCORE volunteer counselor who has the business experience you seek to address your questions.
*An assignment to help you think through your business challenge or opportunity and a follow up appointment to be set at your first counseling session.
*Follow up from your SCORE business counselor or charter office, checking on your progress and offering additional assistance.
Chicago SCORE ChapterCiticorp. 500 W Madison Street, #1250
Chicago, Illinois 60661312 353-7724
Mark LiebermanMark Liebermanmark.lieberman0mark.lieberman0
[email protected]@gmail.com
Business Planning Addresses To Remember•Me: [email protected] http://www.Linkedin/In/LiebermanMark•Score Chicago: scorechicago.org•Score National: score.org
Today’s Topic
Business Plan, what? why? when? who? how?Elements of good Business Plan Brief descriptions of each of elements How to write one?Common mistakes to avoid
Myth #1
Myth: All I need is a good idea to be a successful entrepreneur.
Reality: A good idea is a great start, but it takes hard work, research, and planning plus successful implementation strategies to turn your idea into a profitable enterprise.
You Need A Business Plan Unless You Are Talking to One of the 3 F’s
Business Plan is a Process
Simple
Specific
Realistic
Complete
RESULTS
ACTIONPLAN
FOLLOW UP
One Plan: Many Uses
Business Plan
Laboratory
PromotionPromotion
MotivatorElevatorSpeech
Typical Business Plan Outline
1.0 Executive Summary2.0 Company Summary3.0 Products (or Services or both)4.0 Market Analysis Summary5.0 Strategy and Implementation Summary6.0 Company’s Organization7.0 Financial Plan
7.0 Financial Plan
What is the Goal of the Financials?
Balance Sheet Shows The Financial Position of a Firm
The Income Statement Shows the Performance of a Firm Over Some
Period
The Cash Flow Statement Gives Insight How Cash Has Been
Generated and Used Over the Period
How They Relate to Each Other
If That’s the Goal, How Do I Get There?
You can get there this way …
But there is a better way
What the SCORE Template Contains
Purpose Tab Number
Use
Introduction None Documentation and Company Name
Input 1 - 6 Basic Expenses, Sales Forecast, Cash Flow Controls
Financials 8 - 17 3 years of Income Statements, Balance Sheets and Cash Flow Statements
Miscellaneous 18- 21 Reasonableness Checks and Break Even Analysis
Your Worksheets
? Your own custom worksheets; scratch area
Don’t look for tab 7. It’s there but it’s hidden and unused. Tabs 1 – 6 are where you’ll spend most of your time. Your thought goes here. Tabs 8 to 17 are protected. They are read only. Your payoff is here.Tabs 18 – 21 may or may not be useful.
What to remember about
Introduction (0)Here’s where you will enter your company name. That name will carry through to all future statements. The Introduction also contains some documentation on color codes.
What to remember about
Sales Forecast (4 and 5)•Although this isn’t the order in which they appear, work on 4 and 5 before any others. They should be where you spend most of your time and thought.
•Try to confine yourself to 4 or fewer products or product groups.
•If your business is seasonal, make sure you reflect that pattern in the sales forecast. Almost certainly, you won’t begin in January so change the time buckets here to align with your actual start date. The change will carry though all other slides.
•If you use a supporting sheet, link to it.
What to remember about
Fixed Operating Expenses(3)•Use the Expense captions as a start, but over key them with better captions if you need them.
•At first, you won’t know these. Take a guess, and refine the guess as you learn more about the business.
•Don’t key in Other Expenses. They come from the Amortization Schedule (20) which in turn comes from Required State Up Funds (1).
•This amortizes all annual expenses equally over 12 months. If that is inappropriate, you’ll have to modify the Income Statements (8,12, and 15).
What to remember about
Salaries and Wages (2)•Be honest. Are you going to pay yourself during the first year?
•The spreadsheet will amortize pay and contractors evenly across all months. If that isn’t true, you will need to do some changes to the spreadsheet.
•Estimate average wages for full and part time employees if you have them.
•Contractors who work for you full time aren’t contractors. They are employees. Treat them correctly.
What to remember about
Start Up Funds (1)•You probably won’t know all this when you start so put in estimates you revise as you go. Over key inappropriate captions, but be sure the total are correct.
•Fixed assets will be automatically depreciated.
•Sources of funding will be repaid as appropriate using the Amortization Schedule.
•Don’t be afraid to change your estimates based on what you see in the Cash Flow statements. Cash flow balances may never be negative.
Remember Only You Can Make the Business Plan
Volunteers for Business Plan Boot Camp?
Requirements
•Know Excel or equivalent
•Need to get done in 4 to 6 weeks
•Serious about a business plan
•Ready to work hard to complete financials