7 Steps to a Finance-Centered Business Plan

By Adam Toren 

CONTRIBUTOR Serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com

While many entrepreneurs can easily get started with a one-page business plan, the simple approach isn’t necessarily the right approach for every startup. If you’re going to need financing or investors, you’ll need to build a finance-centered business plan to address all your potential investors' or lending institution’s concerns.

Here are seven simple steps outlining what you’ll need for a finance-centered business plan.

1. Executive summary. You’re going to need to provide an executive summary of your business plan for investors or lenders to read. Think of this like the “cliff notes” of the whole plan. If you have already created your one-page business plan, the bulk of that document now becomes your executive summary. It should cover the highlights and key summary of all the other areas of the plan you’re about to cover.

Make sure that it’s brief enough so they can get through it quickly, but also contains enough information that they’ll want to keep reading and get the sense that you and your business are a good investment.

2. Business overview. At this stage in your plan you’ll want to outline what it is that your business is going to offer and what methods you plan to employ to make sure that it sells. It’s a high-level overview of the business’s make up that should include the type of business you’re in, how and where you plan to sell your product or service (Online? Retail location?) as well as the legal entity type you’ll be organizing as.

It can be easy in the executive summary to stray from the high-level overview so make sure you stay on point and keep this very broad. You’ll get into the nitty-gritty details later in your plan.

3. Management. If someone is going to invest in your business or lend money to you, they want to know who the leadership team is. Is it just you? What are your personal and professional qualifications for the job? What’s the rest of the advisory board or executive team like and how are they qualified?

Spell out the management so investors know your business is in skilled, capable hands.

4. The market. This is a crucial step that so many well-intentioned entrepreneurs skip. They get so excited about their passion for the business they want to create or the product they envision that they forget to sink ample time and resources into doing the market research.

No matter how much you’re in love with your idea, if there isn’t a market for it, it’s not going to sell -- which in turn means your business isn’t going to succeed. Find the need for your niche and amply describe your research for the market in this section so your potential investors know the market demand. Be prepared and don’t skip this critical step.

5. Sales and marketing strategy. This is the stage of your plan in which you will get to expand on step two’s business overview. Now you get to really detail how you plan to sell your product or service, what the marketing strategy is and how you’re going to create your specific success plan. Knowing your business and knowing the market thanks to your great market research will inform your decisions to set strategy here.

6. Financials. This step is often the one that presents the greatest challenge for some entrepreneurs. If you’ve managed to get this far in your business plan you are going to need to see it through and do the financials. The finance-centered business plan comes down in a big way to this step as those about to lend you money or invest in your business are going to want to know that their investment is projected to succeed.

Often, entrepreneurs don’t have the skills and background necessary to map out financial projections, so do yourself a favor and partner with a qualified, skilled CPA or business consultant who can help. Not only will that lend extra credibility to your business plan, but it will help you set out the financial future to anticipate your business’s success.

7. Complete your SWOT analysis. What’s SWOT? It stands for strengths, weaknesses, opportunities and threats. This step is your chance to do your market research for the business and its competitors. It's your opportunity to show that you’ve put time and analysis into the success of your business idea.

What will be the strength of your product and your management team? What are the weaknesses of your business and areas of vulnerability in your plan? What opportunities in the market are you planning to capitalize on and what threats already exist or might materialize from the competition?

Don’t underestimate the threats and weaknesses section of this analysis. You’ll want to show you thought of every angle and are prepared with ideas and answers.

Business Startup Strategy

By Greg Balanko-Dickson

I strongly suggest that would-be entrepreneurs do a business plan. As a result of completing the plan you will be much better prepared and know whether or not your business idea is feasible. Try the following article for a short-cut. However, I caution you on following a short-cut unless you have substantial experience or knowledge about your area. Proceed with caution without a business plan!

How is your business unique, and why will your goods or services appeal to customers? What are the primary differences between your company and your competitors? What are the driving factors to choose your business over another?

In other words, what is the underlying reason a customer would do business with your company?

1) Define Your Business and Vision

Defining your vision is important. It will become the driving force of your business. Here are questions that will help you clarify your vision:

• Who is the customer?
• What business are you in?
• What do you sell (product/service)?
• What is your plan for growth?
• What is your primary competitive advantage?

2) Write Down Your Goals

Create a list of goals with a brief description of action items. If your business is a start up, you will want to put more effort into your short-term goals. Often a new business concept must go through a period of research and development before the outcome can be accurately predicted for longer time frames.

Create two sets of goals:

1. Short term: range from six to 12 months.
2. Long term: can be two to five years.

Explain, as specifically as possible, what you want to achieve. Start with your personal goals. Then list your business goals. Answer these questions:

• As the owner of this business, what do you want to achieve?
• How large or small do you want this business to be?
• Do you want to include family in your business?
• Staff: do you desire to provide employment, or perhaps, you have a strong opinion on not wanting to manage people.
• Is there some cause that you want the business to address?
• Describe the quality, quantity and/or service and customer satisfaction levels.
• How would you describe your primary competitive advantage?
• How do you see the business making a difference in the lives of your customers?

3) Understand Your Customer

It is not realistic to expect you can meet the needs of everyone, no business can. Choose your target market carefully. Overlook this area, and I guarantee you will be disappointed with the performance of your business. Get this right and you will be more than pleased with the results.

• Needs: what unmet needs do your prospective customers have? How does your business meet those needs? It is usually something the customer does not have or a need that is not currently being met. Identify those unmet needs.
• Wants: think of this as your customer’s desire or wish. It can also be a deficiency.
• Problems: remember people buy things to solve a specific problem. What problems does your product or service solve?
• Perceptions: what are the negative and positive perceptions that customers have about you, your profession and its products or services? Identify both the negative and positive consequences. You will be able to use what you learn when you start marketing and promoting your business.

4) Learn From Your Competition

You can learn a lot about your business and customers by looking at how your competitors do business. Here are some questions to help you learn from your competition and focus on your customer:

• What do you know about your target market?
• What competitors do you have?
• How are competitors approaching the market?
• What are the competitor’s weaknesses and strengths?
• How can you improve upon the competition’s approach?
• What are the lifestyles, demographics and psychographics of your ideal customer?

5) Financial Matters

How will you make money? What is your break-even point? How much profit potential does your business have? Take the time to invest in preparing financial projections.

These projections should take into account the collection period for your accounts receivables (outstanding customer accounts) as well as the payment terms for your suppliers. For example, you may pay your bills in 30 days, but have to wait 45-60 days to get paid from your customers.

A cash flow projection will show you how much working capital you will need during those “gaps” in your cash position.

I recommend thinking about these six key areas:

1. Start up Investment
2. Assumptions
3. Running Monthly Overhead
4. Streamlined Sales Forecast
5. Cumulative Cash
6. Break-even

6) Identify Your Marketing Strategy

There are four steps to creating a marketing strategy for your business:

1. Identify All Target Markets: define WHO is your ideal customer or target market. Most companies experience 80% of their business from 20% of their customers. It makes sense then to direct your time and energy toward those customers who are most important.
2. Qualify the Best Target Markets: the purpose of this step is to further qualify and determine which customer profile meets the best odds of success. The strategy is to position your business at the same level as the majority of the buyers you are targeting. It is critical to figure out who your best customers are and how to best position your company in the marketplace.
3. Identify Tools, Strategies and Methods: a market you cannot access is a market you cannot serve. Marketing is the process of finding, communicating and educating your primary market about your products and services. Choose a combination of tools and strategies, that when combined, increase your odds of success.
4. Test Marketing Strategy and Tools: the assumptions we do not verify are typically the ones that have the potential to create business problems. Take the time to test all business assumptions, especially when you are making major expenditures.

ABOUT THE AUTHOR Greg is a small business coach and consultant who has worked with hundreds of small business owners and entrepreneurs in over 20 industries. He fills the gap between the lawyers, accountants, web developers, marketing and technology professionals and specializes in business start up, planning, turn-around and expansion. Greg distributes free information about small businesses on

Read more: http://articles.bplans.com/starting-a-business/business-start-up-strategy/73#ixzz3DdavhhkL

Do You Have The Mentality To Be An Entrepreneur?

By Martin Zwilling

As an angel investor and a mentor to aspiring entrepreneurs, I’m always disappointed to see founders who seem stressed out most of the time, and more annoyed than energized by the abundance of challenges they see in building their startup. The entrepreneurial lifestyle is a tough one under the best of circumstances, and it’s one you have to love in order to succeed.

Obviously, it’s not that simple, but making the right first impression is critical for an entrepreneur, not just with investors, but also with partners, customers and even yourself. Even though I’ve been working with entrepreneurs for many years, I’m sure I’m not the only person who can quickly spot the ones whose mentality for the role is suspect.

We would all prefer that aspiring entrepreneurs take a hard look in the mirror early, before they assume they can step easily into the role of a Mark Zuckerberg, Richard Branson or Bill Gates. Here are some key mentality attributes to look for, which I believe are essential for every entrepreneur to see in themselves:

1. You relish the role of leading the charge. Being a visionary or an idea person is not enough, you have to be anxious to jump in and get your hands dirty. Most success stories in business are not about envisioning the next big thing, but about making that change happen. Investors and strategic partners look for entrepreneurs who can execute.
2. Ability to balance right-brain and left-brain activities. Most technical entrepreneurs are left-brain logical thinkers, even perfectionists. Yet every business today needs a focus on visualization, creativity, relationships and collaboration, which are normally in the domain of right-brainers. Successful and happy entrepreneurs have that rare whole-brain focus.
3. Enjoy being outside your comfort zone. New businesses are an adventure into the unknown. You need to be mentally prepared to enjoy the roller coaster ride, rather than face it holding your breath with your teeth gritted at every turn. Only then can you enjoy the thrill of victory when you survive a major turn, and be energized for the next one.
4. Proactively seek input, but make your own decisions. Great entrepreneurs seek out critical customers and industry experts, and actively listen, but are not afraid to trust their own judgment as well. Ultimately they accept the responsibility of “the buck stops here,” meaning they live by their own decisions, and never make excuses.
5. Willing and able to do a little bit of everything. Technology experts tend to have a very deep level of knowledge, but not very wide. If your real interests are not very broad, then building a business will likely be frustrating and expensive. Startups have limited resources, so the founders have to enjoy trying things and learning from their mistakes.
6. Viewed by others as a successful problem solver. The best ideas for a new business are solutions to a real customer problem, rather than great ideas looking for a market. Creating a new business means tackling one difficult problem after another, until success suddenly appears. Entrepreneurs see problems as milestones to success, not barriers.
7. Don’t demand or expect immediate gratification. Seth Godin once said, “The average overnight success in business takes six years.” He is an optimist. For some entrepreneurs that success is financial. For others it is a legacy of good deeds. Because it takes so long to get there, it is important to be happy with the journey.

I’m not suggesting that you need to fit every aspect of my view of an entrepreneur’s mentality for success. Certainly there are winning businesses run by people from every background and personal style. But if you are looking for investors, team members and demanding customers, it helps to understand what their biases might be in committing to and helping the ideal partner.

I do believe that if every aspiring entrepreneur spent at least as much effort looking inward, understanding their own drivers and preparing as they do in working outward by building solutions, seeking investors and writing business plans, the startup success rate would go up.

Overall, the entrepreneur mentality is a state of mind that enjoys the activities and requirements of starting a business. Happiness is more likely to lead to success, than success leads to happiness. Are you certain that your desire and expectations of being an entrepreneur are being driven by the right perceptions?

Martin Zwilling

CEO & Founder of Startup Professionals, Inc.; Advisory Board Member for multiple startups; ATIF Angels Selection Committee; Entrepreneur in Residence at ASU and Thunderbird School of Global Management.

Do You Have The Mentality to be an Entrepreneur?

*** First published on Entrepreneur.com on 8/29/2014 ***

How to Quit Your Job & Start Your Own Business.

Nicole Dominique Le Maire

Visionary Entrepreneur, People Expert, Author, Speaker, Leader 

Many people dream of escaping the corporate world, of making their own rules and being their own boss.

Starting your own business may seem like the perfect exit from a life of monotony, but if approached improperly, it can easily leave you bankrupt and wishing you had stuck with your nine-to-five.

If you want to leave your job and start your own business, it's necessary to follow a slow, sensible, disciplined path—and to not get caught up in dreams of wealth and unlimited freedom. Before you quit your job, take the following steps:

Begin the process during your spare time. It's best to take it part-time for a while; start growing your business during your evenings and weekends, rather than just getting a bunch of loans and suddenly quitting your day-job. Almost all businesses take time to turn a profit, not to mention, you'll need to learn the ropes of how to run your business.

It's much wiser and less stressful to do this while you're still backed by some kind of steady, reliable income.

If you're not in a huge rush to make your business turn a profit, you'll avoid panicked thinking and making short-term decisions that may not be best in the long term for your business.

For example, I recently worked for a small HR business that was just getting off the ground.

The owner hired me initially to do help with the HR startup side, then got overly ambitious (lured by unrealistic ideas of fast wealth) and had me design a five year global plan in a total overhaul for the business (against my advise), wanted me to design and write a number of HR tutorials, then panicked about money as he hadn't saved adequately in order to grow his business the next five years.

Save, save, save. Most small businesses fail before they truly get off the ground due to a lack of cash flow. Create a new savings account and start putting half of your monthly paycheck into it.

Sounds drastic? Get used to it!

This is the kind of financial discipline you will need to manage a successful business, so it's best you start getting into the habit of restraint before you're fully reliant on your new business.

Cut your personal expenses down to the bare minimum. If you think having your own business is going to be all about paying less taxes, writing off expenses, and living more affluently than prior, you need to do some more research.

You're going to go from a steady income to a style of earning that is akin to times of famine and plenty.

Sometimes business will be good, sometimes it will be terrible. So, like the caveman did when he was dependent on the whims of nature, you have to learn to use only what you need, use everything you have without wasting any resource, and store away any spare resources for those times of famine. It will make all the difference to your long-term survival.

Surround yourself with supportive people. Running a business is hard, and sometimes, you're going to be very discouraged with the whole process, and likely ready to chuck it all in.

It's vital to surround yourself with people who support you in your decision to start a business, and who believe in your dreams even when you don't.

Cut ties with those who tell you the whole plan is daunting from the beginning. If you listen to negative voices, you cut your odds of success drastically.

And most of all, prepare for a lot of hard work. If you're used to working 8-hour days, it might be a shock to the system to sometimes have to work 12 or 16 hour days, but that is often necessary in the beginning when you run your own business. Remember it’s all on you, now. If the customer isn't happy, you can't pass them along to someone else. You have to accommodate all of them, all by yourself, until you can afford to have someone else work for you. Similarly, if you mess up, you can't brush your mistake under the rug and not have it come around to directly affect you.

Once you master all of the above, you'll most likely be ready to quit your day job and enjoy years of success, eventually earning the freedom that you initially dreamed of.