How to write a business plan
Start your business plan on the right foot with practical advice from business planning expert Tim Berry and the Bplans staff.
Friday, 6 November 2009
Writing a business Plan
In our experience, the process of creating and writing a business plan is as valuable as the end product itself - a document that will provide the priorities, context and sanity you’ll need as you start up your business.
Just remember that the most important audience for a business plan is YOU! You’ll be forced to be accountable to all of the statements, claims, stats and facts inside of it.
You may also use your business plan as a tool to generate interest from
financiers, prospective employees and strategic partners.We focus on 3 aspects of business planning to consider as you write a business plan:
- The "Defining Dozen" questions you must answer
- Key components of a business plan
- Writing a business plan
Sample Business Plans
Use these sample business plans for reference.- Hospitality (restaurant)
- Manufacturing (apparel)
- Service(public relations)
- Technology (software)
- Technology (hardware)
The "Defining Dozen" questions
To write a good business plan, you have to know the answers to the “Defining Dozen” questions, which we describe in detail in “StartupNation: Open for Business,” our book. Jot down the answers to each of these questions and hang on to them. You might not use every answer in writing your business plan, but they could be helpful when you update your plan as your new business grows.
- What’s your business idea? (Read the book excerpt)
- How does your idea address a need? (Read the book excerpt)
- What model suits you best? (Read the book excerpt)
- What’s so different about what you offer? (Read the book excerpt)
- How big is the market and how big will you grow? (Read the book excerpt)
- What’s your role going to be? (Read the book excerpt)
- Who's on your team? (Read the book excerpt)
- How will customers buy from you, and how much will they pay? (Read the book excerpt)
- How much money do you need, and how much will you make? (Read the book excerpt)
- Where's the startup money coming from? (Read the book excerpt)
- How will you measure success? (Read the book excerpt)
- What are your key milestones? (Read the book excerpt)
Once you’ve answered these questions, you should be prepared to write the actual business plan document.
Key components of a business plan:
Executive Summary:
Summarizes the most important information within the pages of your business plan - the people, the idea, the market, the competition, the strategy - typically no more than two pages long, the executive summary is usually written last. It takes discipline to keep the summary short, but it's a must.
Business Description:
Details the mission, goals, value proposition, business model, and key assets. After someone reads this section of the plan, they should be able to "get" what you're offering with total clarity!
Market Analysis:
Dives into the needs and wants of potential customers in the market, as well as your competition and the percentage of the market you expect to reach. Be sure to include any pertinent market research and competitive analysis you've done - and cite your sources.
Resource
To generate market size and demographic statistics for your business plan, tap into the U.S. Census or the U.S. Securities and Exchange Commission.
Marketing and Distribution:
Discusses your strategy and timeline for achieving your marketing goals and defines how you get what you offer into customers’ hands. Be sure to include any new or novel ideas you have for marketing and distributing your product.
Personnel:
Describes the management team (existing or future) and any other key personnel that will be instrumental to the business’ success. Includes each team member's role and responsibilities, as well as any background information that illustrates why they are highly qualified for their role.
Exit Strategy:
Puts into words what you see as the ultimate destiny of the company, especially as it may affect those who finance your new business, as well as other equity holders in the startup.
Financials:
Tool
Cash Management Report (419K)
Best used with Microsoft Excel 2003. Other software or versions may experience problems.
Distills your strategies and assumptions into how much they’ll cost and how much money they’ll make you in the course of your new business.
The Financials section should map out your first few years of business and contain:
- Written narrative of key business assumptions
- Income statement
- Balance sheet
- Statement of cash flow
- Cash management report
We’ve developed an important tool to help you forecast and manage the financial side of your startup business - a cash management report. It looks at how cash moves in and out of your business on a monthly basis. By preparing a cash management report before the launch of your business, you’ll be able to determine if you’ll need to raise outside capital, when you’ll need it, and how much will be required.
Writing your Business Plan
Your business plan should be concise and neatly formatted. We suggest a Microsoft Word document for the bulk of the business plan, with financial documents as attached or embedded spreadsheets created in Microsoft Excel. Avoid fancy graphics, flowery language or photos. The easier you make it to read for a potential investor or partner, the better.
If you are the type of person who works better with templates and wizards, there are many business planning software packages available that cost around $100, as well as a few free online business plan templates.
The advantage to using business planning software is that it offers a step-by-step approach to the process (similar to a “wizard”), and can include sample business plans for specific types of businesses (e.g. restaurants, manufacturing, service) to help you outline some of the unique requirements or expenses associated with that particular business. It also formats your business plan for you.
A drawback to using business planning software is that it might not provide you the flexibility to convey some of the uniqueness and creativity of your new business, since it's written through the software system.
Get out of debt........
You may not think you have a debt problem – but then again, you may be in denial! Here is how to tell...
These days, most of us have some form of debt to deal with – whether it is a loan, a credit card, or an overdraft. But the big question is, at what point does that debt become a serious problem?
If you are just about managing financially, you might not think you have a debt problem. But if your finances are a bit of a mess and if you, even occasionally, struggle to keep up with your debt payments, this could indicate that your debt is a bigger issue than you realise.
Facing up to these problems can be really hard. And it can seem far easier to simply ignore the problem, shove your bills in a cupboard somewhere, and hope it will all go away. Unfortunately, it does not work like that, and the longer you ignore your debt problem, the worse it will get. So here are the top 10 warning signs that your debts could be spiralling out of control.
1) You only pay the minimum monthly repayment on your credit cards
Minimum monthly repayments are typically set at ridiculously low levels. This means that if you only manage to pay this amount, it is going to take you a long time to pay off your credit card debt in full. Not only that, but you will end up paying far more in interest before you clear your balance.
2) You do not know how much you owe and you do not want to find out
If you have lost track of how much you owe and have no idea how you ended up in debt, you are probably overspending. Losing track of what you are spending where is not a good idea, especially if you are spending large amounts. It indicates you have no control over your finances.
3) You're borrowing more to pay off your debts
Borrowing more and getting further into debt to meet your other debt payments is a dangerous path to follow – particularly if you're using payday loans, logbook loans or credit card cheques. Equally, if you're taking money out on your credit card just to cover monthly payments on other debts, you could find yourself in serious trouble in the future.
4) You are spending more than you earn
If you have no idea what your budget is and you are spending more than you earn each month, or you are not sure whether your salary is covering your expenses, you could be in serious trouble.
5) You use your credit card to pay for everyday spending
If you regularly use your credit card to pay for necessities such as food or petrol and cannot afford to clear the balance each month, your debts will continue to build up and put more strain on your finances.
6) You are regularly late paying bills
If you regularly fail to make your bill payments on time, your cheques bounce, or you overspend on your credit card or overdraft, you will incur extra fees and charges from your bank. This will drive you further into debt and could also damage your credit rating.
7) You have no savings
If you are unable to put even a little money aside into a savings account each month because your debts are too high, that is not a good sign. Having said that, it is usually wise to pay off your debts before starting to save - so it is the right strategy, but do not be blase about it: it is a sign that you are struggling.
8) You find it hard to talk about your situation
If you find it difficult to be honest with your friends and family about your debt problems, or you are lying to them about your spending habits, you could be in denial about your debt.
9) You have been rejected for credit
This could be because you have too many credit cards – even if you no longer use them – or because you have missed payments in the past. All of this can damage your credit rating.
10) You are constantly worried about your finances
Recent research from talkaboutdebt.co.uk has revealed that 61% of people in serious debt are not sleeping due to debt stress, and 29% have taken up to six months off work. If your money problems are affecting your working life, leisure time, and how you sleep, it is time to seek help.
Help yourself
If any of the situations outlined above apply to you, you are probably feeling concerned. Debt can have a serious impact on your life, but the important thing to remember is that you do not have to deal with it on your own. Simply talking about your financial problems with your friends and family can feel like a huge weight has been lifted off your shoulders. Iit is a big step in helping you to face up to your debt problem.
If you want to get back in control of your finances, the first thing to do is to adopt this goal: Destroy your debt.
Financial products
The following financial products may also help you to fight back against your debt: If you have credit card debt that is earning a hefty rate of interest, transfer that debt to a 0% balance transfer deal right away. This will give you some breathing space and give you a chance to tackle your debts head on. The current market-leader is the Virgin Money Card which offers a fantastic 16 month interest-free period. And as well as paying off a credit card or store card debt, you can also use this card to transfer money directly into your bank account to pay off an expensive overdraft or settle a debt with cold hard cash.
Just be aware you will have to pay a transfer fee of 4% for this money transfer, and just 2.98% for the card balance transfer. You also need to remember to try to clear the balance within this 16 month period. If you not, make sure you are ready to transfer the remaining debt to another 0% card – just remember you will be charged another transfer fee in the region of 3%.
Alternatively, you could switch your current account to a bank which offers an interest-free overdraft, and use that to pay off debts or transfer an overdraft. The Alliance & Leicester Premier Direct Account, for example, offers a 0% overdraft for an impressive 12 months!
It is also a good idea to get a 0% new purchases credit card for any further spending you need to do. The Tesco Clubcard Credit Card, for example, will give you 12 months interest-free on your spending. What is great about this is that you will be able to focus on your more expensive debts without worrying about racking up any interest on any purchases you make, for a year.
So if you cannot move all your debts onto interest-free deals, try snowballing – it is a very effective way of tackling your debts. Find out more here. Finally, if you desperately need more money, you could consider taking out a personal loan such as the Alliance & Leicester Personal Loan or the Sainsbury Finance Shopper with Nectar Card Loan – both of which offer a low rate of 8% APR.
Seek advice
If you are still feeling completely at a loss as to how you are going to tackle your debts, contact a free independent debt advisory service such as Citizens Advice, National Debtline, the Consumer Credit Counselling Service, Payplan and Advice UK.
These charities will be able to provide guidance on a range of options to help you sort out your debt problems, and you will not have to pay anything for this advice. But whatever you do, do not bury your head in the sand and think your debt problem will go away by itself. Because it wont.
There are people out there who can help you and the sooner you start to face your debts, the easier it will be to get yourself out of debt. So do not give up hope!
Thursday, 5 November 2009
Tips from a self-made billionaire
self-made billionaire, financier and philanthropist Seymour Schulich has written a book to pass on the lessons of his 67 years to young, business-minded persons. Entitled Get Smarter: Life and Business Lessons, this mentoring book will be in bookstores as of August 15.
Long intrigued by Schulich and his path to fortune, I obtained an advance copy of his book (co-authored by Derek DeCloet of the Globe and Mail) from the publisher, Key Porter. Having just finished reading it, I think it's worth writing up a review if only because it could be one of the more important business books of the year. Indeed, I have heard (unconfirmed) that pre-orders over the Internet at Chapters Indigos are second only to the new Harry Potter book.
It's captivating, has plenty of sage advice, and is worth adding to one's library. But I do have one complaint: I wish there was more of it. It's a quick read, one that can be finished in a sitting or two. Maybe that's good given the book is aimed at entrepreneurial 20 to 40 year olds, a group usually pressed for time. But what might also be useful for others with more time is a full-length biography that goes deeper into aspects of his life. Mr. Boswell, where are you?
Nevertheless, with a few well-placed brushstrokes, Get Smarter deftly tells us who Schulich is and where he is coming from. He's a billionaire with an eleven-year-old car and a thirty-year-old house, a veteran poker player with several tournaments under his belt, and a bookworm who devours one book a week (2,500 to date). And he modestly describes his personality as "introverted, studious nerd."
Schulich explains why he has turned to helping young people, as highlighted by the $200 million he has donated to fund scholarships, university chairs, etc. and his writing of a mentoring book. Instrumental in the decision, like many other important moments in his life, was a passage read in a book:
"A hundred years from now it will not matter what your bank account was, the sort of house you lived in, or the kind of car you drove… but the world may be different because you were important in the life of a young person."
Schulich started out as an oil analyst at a small brokerage firm in 1967 and then moved on in 1969 to work at Toronto-based investment counseling firm Beutel, Goodman and Co. as an oil analyst, head of research, and partner until 1990. He was involved in running mutual funds, pension funds and private accounts, but where he really made most of his money was in the venture capital and merchant-banking division of Beutel, Goodman and Co., investing in energy and mining start-ups.
Schulich and office mate, Pierre Lassonde, also teamed up for a "weekend diversion" called Franco-Nevada, a public company formed to buy royalty interests in junior gold exploration companies in the Nevada area. It was set-up almost as a lark: Schulich liked to visit Nevada two or three times a year to ski and play poker and thought at least he would be able to write off his vacations.
After 40-some "dry-holes," Franco-Nevada hit it big with an 18% royalty on the output from Barrick Gold's huge Goldstrike discovery, and went on from there to more successes. Franco-Nevada's stock turned $1,000 into $1.25 million over 19 years to 2002, the year it merged with Newmont Mining (I believe that works out to an astounding average compound return of 39% per year). Schulich now works three days a week at Newmont.
The way to make money in the stock market is to buy $2 of assets for $1 or by identifying commodity price trends, says Schulich. Concerning the latter, gold and oil are now the places to be. Gold will benefit from the debasement of the U.S. dollar and oil "is entering a golden age of shortage of supply. Very tight oil markets will last for the next thirty to fifty years, until fusion power becomes commercialized." Right now, Schulich has major investments in BlackRock Ventures Inc. and Canadian Oil Sands Trust.
Forger Forbes!
AIC Limited announced today that Manulife Financial has signed an agreement to acquire AIC’s Canadian retail investment fund business.
The business is being sold by privately held Portland Holdings Inc., which is owned by prominent Jamaican Canadian billionaire Michael Lee-Chin.
Under the agreement, Manulife Mutual Funds would manage all AIC funds in Canada and AIC would continue to act as a fund sub-advisor for Manulife Mutual Funds.
“This sale reflects our overall strategy to return to our roots of managing money and concentrate on our investment advisory services, said Michael Lee-Chin, Executive Chairman of AIC Limited. We are committed to ensuring our clients continue to receive high-quality service and are very pleased that Manulife Financial is the purchaser of our retail fund business, since they share our passion for providing advisors and clients with a broad array of products and services.”
Upon completion of the transaction with Manulife, AIC Investment Services Inc. is expected to commence operations under a new name to aptly reflect the values and principals of founder Michael Lee-Chin, Executive Chairman. The new company will be a Portland Holdings company.
“Our intent is to build on our core competencies and service the investment advisory market across Canada,” said Michael Lee-Chin, Executive Chairman, AIC Limited. “While a number of our staff members are expected to join the Manulife organization, we intend to remain an active employer within the Burlington community as we have been for years.”
As the market meltdown whipped AIC, the billionaire fund manager began quietly shopping the company around more than a year ago finally finding a buyer in Manulife.
“It is a bittersweet day,” said Mr. Lee-Chin, who bought the AIC Advantage Fund in 1987 with less than C$1-million in assets. “It's been my baby for nearly 23 years. It's my passion and my legacy.”
While Mr. Lee-Chin and the Manulife Financial did not release a price, sources estimate he will receive less than C$150-million. Mr. Lee Chin is taking full payment in Manulife stock, reflexing his faith in the financial services sector.
Born in Port Antonio, Jamaica in 1951, Michael immigrated to Canada in 1970 to study civil engineering at McMaster University in Hamilton, Ontario. After beginning post-graduate studies, Michael decided to explore career opportunities within the mutual fund industry. At the age of 26, Michael became a financial advisor and, with growing success, progressed to the position of branch manager.
In 1983, at the age of 32, Michael borrowed money to purchase C$500,000 of Mackenzie Financial stock. After four years, this stock appreciated seven-fold, and Michael used the profits to make his first acquisition, a small Ontario-based investment firm called AIC Limited. At that time, Advantage Investment Counsel (a division of AIC Limited) had assets under management of just C$800,000. Within 20 years, assets under management for this 1987 acquisition had surpassed C$4 billion. AIC Limited was to become the first in a series of acquisitions for Portland Holdings Inc., which has made Mr. Lee-Chin a billionaire, and he has all the toys, including the same type of C$60-million Global Express corporate jet used by Bill Gates.
Portland Holdings Inc. is a privately held investment company which owns a collection of diversified businesses operating in sectors that include media, tourism, health care, telecommunications and financial services. Portland Holdings Inc., holdings include, Advantage General Insurance Company Limited, AIC Financial Group Limited (Trinidad), AIC International Investments Limited, AIC Limited, CVM Communications Group, Medical Associates Limited, National Commercial Bank Jamaica Limited (NCB), Reggae Beach, Senvia Money Services Inc., Trident Villas & Hotel Jamaica.
Wednesday, 4 November 2009
Good Website by Dragon
Smarta.com is a new business support and advice network for small business owners and entrepreneurs.
Smarta provides free access to real business advice from established entrepreneurs, featuring exclusive video interviews with Theo, fellow Dragon Deborah Meaden and some of the most experienced names in business.
Monday, 2 November 2009
Make your business lean
Principles of Lean
The five-step thought process for guiding the implementation of lean techniques are easy to remember, but not always easy to achieve:
- Specify value from the standpoint of the end customer by product family.
- Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
- Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
- As flow is introduced, let customers pull value from the next upstream activity.
- As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.
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