Writing a Business Plan

Hosted by:Westbank Community Library

Moderated by:Chris

Bio• Hometown: San Antonio• Created Education Mobile Company for

Central Texas• Experienced teaching in a variety of training

programs from major software platforms to social media to business development and more.

• Maven on a variety of industries, trends, and news.

IntroductionsThings to includeYour nameCity you were born inWhat you studied in collegeWhat is your interest in business?What do you hope to get out of this class?

Welcome

News• Atlantic City Lost Three of its major casinos this

week• Detroit Judge, Steven Rhodes, will determine the

fate of the city today in his ruling.

Outline• Assessment• Reality Check• Would you pass a Banker’s Approval right now?• “What Business Should I start?”• Businesses with high failure rates• What Problem Does your Business Solve?• How is your business classified?• What experience and education do you bring to your business?• Who will make up your startup team? What is their background?• Where will your business be located?• Who are your competitors?• How do you plan to manage your finances?

AssessmentStarting a Business is difficultDoes that mean you are the right person for the job?Consider the following• What are your strengths and weaknesses for

running a business?• Have you run a business before?• What experience qualifies you to run a

business?• What skills will my potential business need?• Likes and Dislikes• What are your specific business goals?• Why do you want to start a business?

Reality Check

• Are you really the one to run your company?• Do you have the discipline for starting a company that

requires more hours than a full time job?• Do your personal habits match the kind of business you

want to start? (i.e., poor people skills vs customer focused business, sloppy habits = poor management)

• Are you aware of the success and failure rate of your business type? (Restaurants/Bakeries have very high failure rates)

• Do you know your business? Like your business?• Can you describe your business in detail?• Do you know what business profit margins to expect? Are

you ok with those numbers?

Banker’s Approval

• Banks look for people who have experience in the industry they want to start a business in.

• Banks look for people who don’t need loans since they are low risk.

• Someone with a well-thought out and researched business plan.

• Carries sufficient financial reserves and personal collateral to handle any expected problems.

• Has sufficient cash flow to make payments for existing business owners.

• New business owners with proven track record of profitability and operating the SAME type of business

Did you pass?

What Business Should I Start?

If you are asking this question, you need to think carefully about starting a business.Don’t let a banker hear you ask that question.

Common Business Types• Retail – Supermarkets, Online Stores, Department Stores• Wholesale• Service – Hairdresses, plumbers, consultants, accountants• Manufacturing – Artisans, Car Production, etc• Project Development – Home Builder and Seller, etc

Businesses with High Failure Rates

• Computer Stores• Laundries and Dry Cleaners• Florists• Used Car Dealerships• Gas Stations• Local Trucking Firms• Restaurants• Infant Clothing Stores• Bakeries• Car Washes (hence why you see so many automated ones)• E-Commerce• Grocery and Meat Stores

Businesses with High Failure Rates

• Business Failure Rates by Industry• Businesses that have high failure Rates• For Companies, it pays to be old

Business Type for this class

• In order to follow along in this course and see examples the type of business we will be using in this course will be a clothing retail store.

• Business Type: Retail• Business Name: Hanging Off the Rack• Business Description: Brick and Mortar Store offering

local hand-made items for causal wear.• Business Problem: ?• Business Gross Profit Margin: 4-13% (Standard for

Clothing retail company)• Business Goals: Become profitable within 6 months and

extend to second store within two years.

Business Description

• Describe your business in detail.• If you are a restaurant, what kind of menus will you have

and what kind of items will you make and sell?• What kind of equipment will you use or need. Will the

restaurant cater to lunch and dinner crowds or breakfast and lunch?

• What kind of atmosphere will your restaurant create? Remember this will entire a certain type of eater for your business and push away other types.

• What kind of employees will you hire? Employees new to the industry or experienced employees from previous similar restaurant types.

Type your Time Now

Business Description

• Additional Questions to Consider for your business description

• Who is my typical customer?• How will I communicate with my target customer?• Where will my business be located?• Where will I buy my supply to sell?• What will be my hours of operation?• How many employees will work for me? Paid?• How will I advertise?• How will I stay competitive?• Will my location have lot of foot traffic?• How much inventory do I need to keep in stock at any one

point in time?

Business Description• Similar questions for other industries• Wholesale• What products will I keep in inventory?• What distributors will I use to move inventory?• Will manufacturers market my product for me or do I

have to?• Service• Do my credentials and skills compete better than the

competition or worse?• Can I match my service will how well I sell it?• How will I manage each financial transaction? Cash or

Credit?• How will I get my first clients?• Should I join an organization to help build a client

base?

Business Description• Similar questions for other industries• Manufacturing• What will what I produce be safe for use?• How will I hire labor?• Will products be made in mass or by order?• Who am I selling to?

• Project Development• Is my price competitive yet still profitable?• Are my prices in line with projected costs?• How will I contract work with other people?• Who is my targeted buyer for the work I create and

produce?

What Problem will your business solve?

Write out a description of the problem and explain how your business will solve the problem.

What you write here will be included in your business plan.

Business Problem: Provide in-person and on-call support for men and women needing causal wear for any kind of event. Men and women attend many events and enjoy having clothes that fit the look of the event. In order to meet demands we offer several options for finding the right outfit. All employees are empowered to help the customer in any way, including meeting any special needs.

Business Classification

What is the legal structure of your company?• Sole Proprietor• Partnership• Limited Partnership (LP)• Limited Liability Partnership (LLP)• Corporation (S,C)• Limited Liability Corporation• Professional Association

Business Classification

Hanging Off the Rack is classified as a LLC because it allows the owners to protect their personal assets from being collected if the company goes under.

Education/Experience

Any investor will want to know the level of education of each person running the company.

If you and three other people will be co-founders then every one will need to list their education and accomplishments, including previous work history and experience to show how their knowledge and education relates to the business they want to start.

Education/ExperienceTaylor Barns – OwnerDuring my time in college I worked with many students to help start their companies. I provided experience researching their markets and providing insight into what they need to know about how to get started. I graduated with a major in Business and then went completed four years at a clothing wholesaler working my way up from entry level employee to managing director for several regional warehouses. I went back to school to get my MBA from Ohio State. I now work in the field of consulting for several small clothing retail outlets. My experience in both the wholesale and retail clothing industry make me a perfect recipient for funding on my first startup.

Education/ExperienceThings to include in your business plan• Professional Resume• Contact Information• Martial Status• Awards

• For corporations this information is minimized and kept to just experience and education background.

Education/ExperienceSince Hanging on a Rack is filed as a Corporation the description would be filed as a brief understanding about the industry and competitor.

Example:Hanging on a Rack was incorporated on the 5th of March in the year of 2010. The corporation was formed in order to sell and resale causal clothing that caters to adult target audience. Our offices are located on 123 Mainstreet Ave, Austin, TX and our office number is 123-456-7890.Two other member are part of founders group and hold equal share of ownership. All owners are in agreement of all financial dealings within the company.

Startup TeamTeam Member 1: Taylor BurnsTeam Member 2: Sarah FranklinEducation: BA in EnglishWork History: 3 years in retail salesTeam Member 3: Frank BillingsEducation: BA in Textile IndustriesWork History: 2 years in textile design, 3 yrs in fashion show management.

Competitors• Your investors will want to see a compiled list of

competitors who are near you that can take away business.

• You also need to consider who the dominant competitors are in your city and how long they have been in operation.

• Most investors want to see a list that also includes their address, including a map that shows where all competitors are located in your city.

• The more detailed the better.

Finances• You will need to create a spreadsheet that shows all

your beginning costs, including fixed and variable.