Mini-Biz Buzz

A business plan allows you to plot the course of your new business and should be prepared in the initial phase of your business. Many people believe it is an unnecessary use of their time if no one is asking for it, but in the long run you can save time, money and anxiety by preparing this up front. If you have a road map to look at, you will more likely keep on course, especially during times of rapid growth. And because it is used as supporting documentation when applying for a loan or pitching to potential investors, this is not something you should throw together in haste.

As you create your business plan you will get clear on how your company will reflect your ideals. As your business takes shape, it will be useful to revisit your plan to see if you are heading in the right direction, or let you know if you need to make changes.

A good business plan needs to be simple, specific, complete and have reasonable goals. If the plan is precise it will increase the chance that people will stick to it. If it is vague, people may interpret the points differently. Also, it is tough to commit to something that seems unclear. And even the best plan ever written is wasted if nobody follows it.

Here are some basics of a good plan:

1. The plan is simple and clear. 

2. The objectives are specific and measurable. The responsibilities are clearly defined, tasks are clearly assigned, costs are detailed, and completion dates are scheduled.

3. The goals and expectations are reasonable and doable.

So that you know what to expect, here are some things you will include in your business plan:

1. Name of your business – This is a good time to reevaluate your business name. Make sure it reflects your brand.

2. Vision - what will your business look like 2 years? 5 years? Do you want get up and running and just enjoy an easy flow of work, or do you have plans for expansion?

3. Mission statement – the purpose, approach, and overall goals of the company.

4. Goals and objectives – measurable monetary and expansion goals with time tables.

5. Sales and marketing strategies.

6. Financial plans and pro forma financial statements.

7. Contingency plans – what will you do in the event of a huge industry shift, and economic downturn, technology changes, etc…

You can get a business plan template on the SCORE website.  You can change it up to fit your needs, but it will give you a starting point.

A micro loan is different in than a regular business loan from a bank. First, micro loans are very small. The loan may be for as little as $100 up to a maximum of $35,000, and the repayment period may not to extend beyond 6 years. And second, the loans are made by private nonprofit intermediaries, using funds from the SBA.

The borrowed money may be used for anything from working capital to inventory. One of the few difficulties in obtaining micro loan funding, however, is that the nonprofit intermediaries distribute funds regionally, in their own communities. If you don’t live near one of these 170 lenders, you may have trouble getting one of these SBA loans. But there are other micro loan programs outside of the SBA program. Google “micro loans for small business” and do some research.

If you decide to apply for an SBA micro loan, be prepared to offer the following information:

Is your company a startup or existing business?

How much money is needed, and what will you use it for?

Who is included in the management team, and what is their experience?

What collateral is available? (business and personal)

How much have you already invested or are you willing to invest?

After your initial phone call, a loan application and personal financial statement form will be mailed to you. Previous financial statements are required for existing businesses, but if you’re a startup, personal tax returns are usually substituted. Submitting an incomplete loan package will delay the process, so make sure you send everything that is being requested. Loans of $5,000 and less are usually processed within a few days. Larger loans may take two to four weeks.

Unlike most banks, these lenders are comfortable with the needs, collateral and experience level of small business borrowers (you guys). The process is as simple as it sounds, so get clear on what you need and then go here to start the ball rolling. Small Business Administration