Client Requests and Assignments
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Business Plan AssistanceFor SCORE 34 Mentors
Client Requests and Assignments
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Client Requests for “Business Plan Assistance”
The two most frequent areas of assistance asked by new clients of SCORE are:
• Starting a Business• The Business Plan
Both are so vague that it is not clear what knowledge the client has or whether it is even the right question to ask.
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First--Get to Know Your Client
• Have your client talk about their current work, their family and their financial position (i.e. own home, credit score, etc.)—very important if client needs a loan
• Listen more; talk less– have the client get comfortable talking to you
• Identify their strengths and weaknesses (so you can be prepared to address areas of which they are not aware (e.g., accounting).
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A Simple Start to Business Planning
A Business Plan [BP] is the end product not the next step.
Most clients can’t handle the complexity and confusion of even the outline of a BP
Use the following 5 Assignments to outline the really key issues before working on the full business plan
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Five Initial Assignments
Answer* each on 1 page of paper:
1. What is my vision of the new business?2. Can I make money on an individual sale?3. How much must I sell in a month to make a profit?4. How much cash do I need to start.5. Do I have stakeholders buy-in?
* Use details in the referenced SCORE Briefs
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Assignment 1 - Vision
1. What is my vision of the new business?
Assignment: Have client write a one page newspaper article about their next year in business, Use the required details outlined in:- Brief # 20.10 Instructions for One Page Newspaper Article
Note: - Most clients can write a simple newspaper article whereas a “business plan” is just not yet in their comfort zone. This will also force them to focus on the key issues. -If client is already in business, then do both Part A and Part B of the Assignment #1
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Assignment 2 – Make Money
2. Can I make money on an individual sale?
Assignment: Have client complete a one page form that will identify the estimated gross margin [with no overhead] on a sale. Use one of:
- Brief # 20.21 One Page Gross Margin Calculation - Product - Brief # 20.22 One Page Gross Margin Calculation – Service
Note: Ignore the fixed costs, just see if the product/service sales price has enough margin to cover the “variable” costs. We will deal with volume and fixed costs later
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Assignment 3 – Break Even Point
3. How much must I sell in a month to make a profit? Assignment: Have client complete a one-page form that estimates fixed costs and then determines the volume of sales needed to make any monthly profit. Use instructions in Briefs: - Brief # 20.31 One Page BEP Calculation - Product - Brief # 20.32 One Page BEP Calculation - Service
Note: client estimates costs and then must up the sales volume until there is enough gross margin to cover it!
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Assignment 4 - Cash
4. How much cash do I need to get started? Assignment: Have client complete a one-page form that estimates the startup expenses and two months of operating capital needed (inventory, A/R) and then identifies where that cash will come from. Use instructions in: - Brief # 20.40 One Page Needed Cash Calculation
Note: client estimates items and amounts then struggles with where all this money will come from. A rough but a good introduction that will let you know whether their business idea has the “smell” of practical.
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Assignment 5 - Stakeholder
5. Do I have stakeholder buy-in?
Assignment: Have client complete the check list to introduce and document potential stakeholder issues.
Use:-Brief # 20.50 – Stakeholder Buy-in Check List
Note:
- Stakeholders are any persons [wife, kids], groups [bank], organizations [employer], or system who affects or can be affected by the proposed business. -Client will probably find this eye opening as they likely will not have thought about a lot of the support/time/other stakeholder issues. This will be used for subsequent discussion of participation in the business.
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Use of Initial Five Assignments
Having simply raised these fundamental issues in the clients language, you have: 1. Identified the KEY issues to be dealt with before all of the
confusion and secondary questions of a business plan are tackled.
2. Likely raised real questions in the client ‘s mind about continuing. Not committing family assets to a failure is a WIN!
3. Determine if an economic basis for the business exists.
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Other Frequently Used Briefs:
• Pricing Procedures for Retail (Brief # 07.00)• Pricing Your Service (Brief # 07.01)• Pricing For Manufacturers (Brief # 07.02)• Legal Structure (Brief # 02.00)• Partnership Agreements (Brief # 02.09)• Balance Sheet (Brief # 04.07)• Income Statement (Brief # 04.05)• Cash Flow Projections (Brief # 04.09)• Your Business Accountant (Brief # 04.01)• Your Business Attorney (Brief # 08.00)
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