Business Plan Tips Part 2

These past several weeks has been interesting since my mind has shifted from what I thought a business plan was to what a business plan really is.  I thought a business plan was just an explanation of your initial idea and people would be happy to come along.  Now I understand that a business plan is more than that which encompasses a projection of sales and revenues, expenses, an overview of your board and much more. 

I believe the most important part of a business plan is the business itself, which will allow an investor to determine if they would be interested or not.  The second most important part is the financial part of the business plan, which allows them to see income statement, projected cash flows and the balance sheets. The business plan should show good profit potential in a short period of time as stated by Tim Berry. (Articles.bplans.com 2012)  This allows an investor to see several things, first if you understand your business enough to see how you will earn money and take care of expenses.  Second it allows an investor to determine if you have projected enough sales to cover expenses, pay yourself and the investor back.  The investor is interested in how long it will take to get back their initial investment along with the return on investment.

Another important aspect of a business plan is the structure and how you will run your business. Will it be a C or S Corporation, Sole Proprietor or Partnership to name a few?  These business structures allows an investor to determine if you have carefully planned and allocated risks when it comes to the type of organization.  If you plan on being a sole proprietor then you assume all risk and debts of the company and an investor might not be interested in investing money into a solo entity.

The specific changes that I made with my plan in particular is to find a way to increase sales to create a greater rate of return for investors.  The business plan allows me to see on paper what areas that will be a potential concern and needs adjusting.  From reading what Mark Cuban states I believe if you are not passionate about your business then it will never work. (Entreprenuer.com 2012)    The investor before reading the business plan reads you and determines how passionate you are about your plan.

The most important section of my plan that would interest the investor would be my sales projections and how I plan to make money.  This area needs to be defined more clearly so they can how soon the company would be profitable and when they can potentially receive a return on their investment.  Another great tip that I can take away is that you should always prepare several business plans, this allows you to make modifications and adjustments along the way since it is a document in the works. (Smallbusiness.foxbusiness.com 2012)

Reference:

Articles.bplans.com 2012 Funding Tips for Small Business retrieved on March 25,    2012 from http://articles.bplans.com/financing-a-business/funding-tips-for-  small-business/133

Entreprenuer.com 2012 Mark Cuban’s 12 Rules for Startups retrieved on March 4,             2012 from http://www.entrepreneur.com/article/222524

Smallbusiness.foxbusiness.com 2012 Top 10 Business Plan Tips for raising money   retrieved on March 25, 2012 from http://smallbusiness.foxbusiness.com

Business Plan Tips

           Developing a business plan is important if you want investors to read it and take your potential offer very serious.  But when it comes to a business plan what do investors look for?  What makes a great and interesting business plan that will pique the interest of investors and allow them to write a check and fund your idea?

            While reviewing successful businesses we decided to review what were some points entrepreneurs should focus on when presenting ideas to investors.  Steve Ellis, who is the founder of Chipotle states that one of the most important aspect of a business plan is the name.   Steve began his dream with a loan from his father for $85,000 and is currently the co-CEO and Chairman of the Board in 2005. (Bpexpertviews.blogspot.com 2012)  I am one that agrees that if a name does not match the idea or theme of the business then it will leave the customers or patrons wondering who you are.  If the potential customer wonders who you are then they will take their resources elsewhere where they know what to expect.  

            A name can project a grand idea or it can come across as a small mom and popshop, well it depends on what you are looking for.  Ellis states that it must portray who the owner is and the concept the owner is trying to portray. (Bpexpertviews.blogspot.com 2012)  Ellis also states that “ a logo must be simple and to the point for it to be appealing”. (Bpexpertviews.blogspot.com 2012) Also the slogan must be catchy and unique and take the consumer on a journey and be well rounded with the concept.  (Bpexperts.blogspot.com 2012)  I believe what Steve Ellis is telling us to do is to Keep it simple and clear when it deals with the concepts of your business plan so the consumer can understand your vision and idea.

            Billionaire and Investor Mark Cuban states that for a business to succeed you must know your core competencies and focus on being great at them.  He also states that you should “never start a company unless it’s an obsession and something that you love”. (Entreprenuer.com 2012)  I totally agree that if you are not passionate about your dream and vision then when turmoil’s and trouble comes then you will seek a way out.  Successful business owners all have one thing in common; they over come adversities and find a way to win.

            I believe the most important task of a business plan is to create a vision and outline and a coherent set of values for your company. (Allbusiness.com 2011)  I believe that you can have the best or better idea than your competition but if your plan dies not create a vision for the future or a vision period then it will not last through the test of time to be and remain successful such as McDonalds, Dell Computers, Apple, Microsoft and others just to name a few.   As we walk away with these tips I hope they will assist you in penning your dreams and making your business a reality for all to enjoy.

References:

Allbusiness.com 2011 Top 10 tips for writing a business plan retrieved on March 4,             2012 from http://www.allbusiness.com/writing-small-business-         plan/16689921-2.html

Bpexpertviews.blofspot.com 2012 Bobby Flays and Steve Ellis retrieved on March 4,            2012 from http://bpexpertviews.blogspot.com/

Entreprenuer.com 2012 Mark Cuban’s 12 Rules for Startups retrieved on March 4,             2012 from http://www.entrepreneur.com/article/222524