Have you been thinking of starting a business but aren’t sure how to proceed? The first step is to craft a business plan. Your business plan will serve as a guide throughout the life of your business, and will help to stay true to the principles that inspired you to begin the venture in the first place. A good, well thought out business plan is also a requirement in the loan-seeking process with most lenders. According to the Small Business Administration (SBA) you should take a piece of blank paper and write the following questions:
Who will I sell to? What will I sell? Where will I market my product? When will I make my product available? Why is my product or service necessary? How will I market my product? How much will my product cost to produce and how much can I charge?
1. A business plan
There is no prescribed length for a business plan. Some very effective plans have been a single page. However, long your plan is, it should be packaged with a Cover Letter that includes the following information:
The name of your company
Company phone number (with area code)
Logo (if available)
Name, titles, addresses (including email), phone numbers (with area code) of owners
Date of the plan
Name of preparer
2. Mission statement
Think of your mission statement as your calling card. Good mission statements are clear and concise, and let others know exactly what your business does and why (i.e. your purpose).
3. Put it together
An effective professional presentation is a key to success:
Once you are finished preparing the business plan, make sure it is packaged correctly. Spiral binders in neutral colors: blue, slate gray and black are safe for bankers who tend to be quite conservative folks.
Make it businesslike, but don’t spend unnecessary time on bells and whistles. Readable type and well-executed graphs should suffice.
no longer than 30 – 40 pages of supporting documents
Table of contents:
Make it easy for readers to find what they’re looking for.
Make sure you have plenty of copies for every meeting.
4. Keep it current
Make revisions to keep up with any changes affecting the company or plan. Keep up to date and make revisions that reflect current swings of the industry, market and community. Also, anticipate the negative impact to the company if sales decrease and costs increase beyond your projections. An alternate budget my help to assuage lenders.
After you have completed planning and documentation, it’s time to move on to the execution phase and make your business a reality. Here are some early considerations:
Funding – Opening your business might require raising or borrow capital. A solid plan and good documentation puts you in a good position for those conversations.
Choose a location – Selecting the best physical (or virtual) location is critical to success.
Pick a name – This deserves plenty of thought. Choose something unique that accurately reflects your business and mission. Consider testing a couple options.
Get state and federal tax IDs – Your Employer Identification Number (EIN) is important to make your business viable. Some states also require a tax ID.
Apply for business licenses – States and municipalities will determine what kind of licenses you will need.
Open a business bank account – Having an EIN will allow you to open a small business account to handle the day to day operations, including legal and tax matters.
As a new business owner, you’ll also need to make sure your business is protected. Our friendly agents at General Insurance can help you get started with a Business Owner’s Policy or Commercial General Liability Insurance Policy. Call us today at 818-837-6500 or get a quote online by visiting our website.