012 Do I Really Need a Business Plan?

Hello there, Small Business owners, entrepreneurs, and community! Welcome to Episode 12, of Web and BeyondCast. This episode is part of our new Business Startup Series on Web and BeyondCast, where we’ll discuss issues specifically related to small business startup and management issues. To do that, I’ll be bringing on startup experts from around the world to discuss issues that are pertinent to startup entrepreneurs.
(If you’re reading this in a podcast directory/app, please visit http://webandbeyondcast.com/012 for clickable links and the full show notes and transcript of this cast.)
As an SBDC consultant, I hear clients ask the question all the time, do I really need a business plan? And, the answer is always the same: yes. But, many resist for all kinds of reasons. They don't understand what a business plan is and how it's constructed, they're concerned it's going to take too much time (instead of simply getting started on it), and they believe it's a do-it-and-done document you never look at again. All of these things couldn't be further from the truth, albeit a business plan will take the time it takes to assemble. Thankfully, there are SBDCs and experts, like my guest today, who can demystify and help you with building your startup business plan!
If you'd like to discuss this episode, please click here to leave a comment down below (this jumps you to the bottom of the post), or feel free to contact me here about any other questions or comments.
In this Cast
Ray Sidney-Smith, Host
Robin Suomi, MBA, is an experienced small business expert and founder of Startup to Growth, LLC.  Working with clients remotely through video meeting platforms, she helps clients answer their technical business planning questions. She also encourages them to dig deeper, dream bigger, and works with them to create their Success Steps!  Check out the website for ongoing How to Start a Business and Business Plan Boot Camp workshops and seminars, as well as 1-1 small business coaching and group coaching, including QuickStart Mastermind and Growth Mastermind groups.
Show Notes
Resources we mention, including links to them will be provided here. Please listen to the episode for context.
NAICS Code Search Tool
Best Tool of the Week
Enloop
Runner-Up: SBA Business Plan tool
Honorable Mentions:

Bplans
Liveplan

Raw Text Transcript
Raw, unedited and machine-produced text transcript so there may be errors, but you can search for specific points in the episode to jump to, or to reference back to at a later date and time, by keywords or key phrases.

Read More

Unknown 0:00Welcome to web and beyond cast where small business comes to learn about marketing and managing on the web and beyond with your host Ray Sydney Smith. Hello there small business owners, entrepreneurs and community. Welcome to weapon beyond cast. This episode is part of a new and hopefully ongoing series called Business Startup series which will publish about every five to 10 episodes on web and beyond cast. And this is where we'll discuss issues specifically related to small business startup and management issues. Today on this show, we are going to be talking about and really answering the question Do I really need a business plan? It's a question that I get all the time and I'm sure that my guest today on the show gets quite often as well. I have on the show and I'm pleased to have on the show my colleague and friend Robin Sumi owner and founder of startup to growth, LLC, a small business coaching, mentoring and educational firm. I know Robin, originally from her time as executive director of Loudon Small Business Development

Unknown 1:00center where she spent over nine years helping thousands of small businesses through seminars one on one counseling and business planning classes. She's also been an adjunct professor at Northern Virginia Community College teaching entrepreneurship and small business management and Introduction to Business courses.

Hello there, Small Business owners, entrepreneurs, and community! Welcome to Episode 12, of Web and BeyondCast. This episode is part of our new Business Startup Series on Web and BeyondCast, where we’ll discuss issues specifically related to small business startup and management issues. To do that, I’ll be bringing on startup experts from around the world to discuss issues that are pertinent to startup entrepreneurs.

(If you’re reading this in a podcast directory/app, please visit http://webandbeyondcast.com/012 for clickable links and the full show notes and transcript of this cast.)

As an SBDC consultant, I hear clients ask the question all the time, do I really need a business plan? And, the answer is always the same: yes. But, many resist for all kinds of reasons. They don’t understand what a business plan is and how it’s constructed, they’re concerned it’s going to take too much time (instead of simply getting started on it), and they believe it’s a do-it-and-done document you never look at again. All of these things couldn’t be further from the truth, albeit a business plan will take the time it takes to assemble. Thankfully, there are SBDCs and experts, like my guest today, who can demystify and help you with building your startup business plan!

If you’d like to discuss this episode, please click here to leave a comment down below (this jumps you to the bottom of the post), or feel free to contact me here about any other questions or comments.

In this Cast

Ray Sidney-Smith, Host

Robin Suomi, MBA, is an experienced small business expert and founder of Startup to Growth, LLC.  Working with clients remotely through video meeting platforms, she helps clients answer their technical business planning questions. She also encourages them to dig deeper, dream bigger, and works with them to create their Success Steps!  Check out the website for ongoing How to Start a Business and Business Plan Boot Camp workshops and seminars, as well as 1-1 small business coaching and group coaching, including QuickStart Mastermind and Growth Mastermind groups.

Show Notes

Resources we mention, including links to them will be provided here. Please listen to the episode for context.

NAICS Code Search Tool

Best Tool of the Week

Enloop

Runner-Up: SBA Business Plan tool

Honorable Mentions:

Bplans
Liveplan

Raw Text Transcript

Raw, unedited and machine-produced text transcript so there may be errors, but you can search for specific points in the episode to jump to, or to reference back to at a later date and time, by keywords or key phrases.

Read More

Unknown 0:00
Welcome to web and beyond cast where small business comes to learn about marketing and managing on the web and beyond with your host Ray Sydney Smith. Hello there small business owners, entrepreneurs and community. Welcome to weapon beyond cast. This episode is part of a new and hopefully ongoing series called Business Startup series which will publish about every five to 10 episodes on web and beyond cast. And this is where we’ll discuss issues specifically related to small business startup and management issues. Today on this show, we are going to be talking about and really answering the question Do I really need a business plan? It’s a question that I get all the time and I’m sure that my guest today on the show gets quite often as well. I have on the show and I’m pleased to have on the show my colleague and friend Robin Sumi owner and founder of startup to growth, LLC, a small business coaching, mentoring and educational firm. I know Robin, originally from her time as executive director of Loudon Small Business Development

Unknown 1:00
center where she spent over nine years helping thousands of small businesses through seminars one on one counseling and business planning classes. She’s also been an adjunct professor at Northern Virginia Community College teaching entrepreneurship and small business management and Introduction to Business courses. She’s created a curriculum for business plan boot camps, and she’s worked with small businesses from every industry. And so Robin, welcome to web and beyond cast grey. Thank you for inviting me. I’m so happy to be here today. I’m excited about our conversation. You’re such a strong supporter of success businesses general I loved working with you through the years and being your friend and colleague. And so thank you. I’m really delighted to have you. And so we’re going to be talking today about business planning. And I know that it’s a it’s a it’s a big topic and we’re going to try to spend the time we have together on what and why a business plan is necessary because there are a lot of people out there who say, Oh, well, you don’t need a business plan. You just you know, go go create one and I think

Unknown 2:00
today’s conversation is going to help us answer that affirmatively and decisively from now on so let’s let’s start off with what fundamentally is a business plan? I think a lot of people don’t actually know Ray that’s such a great question in a nutshell a business plans are written document that describes your business idea, your product, your services, and how you’re going to establish a sustainable business from that idea. That’s it. It’s your guide your roadmap in words to starting and then growing your business your dream the way you want it to grow its complete with goals and objectives. I say crust the fear and step into definition plan. A lot of business owners can get so much out of understanding what a business plan can do for you once they really understand fundamentally that’s what a business plan is there’s quite a bit of talk out there about business plans versus what are called Lean Startup canvases and these kitschy one page business plans that everyone talks about. Can we talk about

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little bit about what the differences between these and the business plan are.

Unknown 3:06
I believe that all planning is worthwhile. And you’re absolutely right. The business world is a fire with I don’t really need a business plan, I’ll just do a one, this one page business plan in 10 minutes, I’ll be fine and not so much. I think that all planning is worthwhile no matter what form it takes, whatever you use to get you started into the planning pathway I’m happy about. So I say I welcome the one page business plans for that reason, are they enough? I don’t believe that they are. Some plans are better than others. I believe that everything you do in life can be used somewhere. So when you’re using those tools to get you started, it might shorten your trial and error period down the road. It’s like a feasibility study. At the end of the day, you need a business plan and I’m talking about a formal plan the lean startup process where you’re shortening the product development cycle, getting the good enough product out there. Sometimes that works and sometimes it does not the minimum viable product if it’s not good enough, it hurts your brand that I believe you’ve hurt yourself. not helping.

Unknown 4:00
yourself at the end of the day, if it were that easy, we’d all be billionaires. And it depends. So those are the two answers. I give most small businesses and this falls devil’s advocate here. I’m a small consulting business startup. And I have say one major client, why do I need a business plan and this goes for a new food truck business online store that’s selling say handmade crafts Why do any of these businesses need business plans?

Unknown 4:29
Another excellent question the person the small business owner that has one major client is actually one of my major clients because say they’re in the federal contracting field they think they have a contract for years and all of a sudden that contract cancels or their consultant their their major client they’re only client goes out of business has it has a business change or they get notified that a contract is ending in the next six months and they’re like oh my goodness I have no idea I started shop I had this client I thought it was fine. They’re not a business plan would do away with all

Unknown 5:00
All of that because there would be a marketing plan in place would be a diversification plan in place. Say you are a food truck, you still need a business plan. You’re always monitoring your competitors what the food trends are looking at a landing new corporate clients, there’s always a reason to be planning ahead. You never know what the environments going to bring you the online store, great example. Trends change even in homemade cards. I’m here to tell you everything changes. The millennials have changed a lot of our different marketplace so they have a recyclable card. Maybe that’s a new product line they could bring it that would really attract the millennials, maybe they want to give away us a certain portion of their profits to a cause that would be attractive to the millennials are so many reasons to have a business plan even in these very simple operations. We’re not talking to 30 page plan. I think it’s really knowing what you’re doing. Recognize that no matter what size of the business you have a business plan is as you said, I love the term feasibility study. I think that’s I think you’re right on point there, Robin that people need to really fundamentally recognize

Unknown 6:00
is is this business feasible, and the business plan not only helps you make that determination, but once you do make that determination, it now allows you to go forward with confidence. Now, I know that you talk about your basically five reasons for preparing a business plan. Ultimately, what is the consequence of both writing a business plan and of those that do not prepare a business plan before they go into business?

Unknown 6:29
Let’s get into my five points. The first point I have is fail on paper. First, when I’m working with clients, or when you’re doing your own business plan, you come to maybe the financials portion, or the marketing portion and you have all these ideas and you cannot possibly do it all. You cannot go to the bank and get alone that’s going to support the marketing activities of the levels that you have. And so for all of those reasons, we want to make sure that you can actually make this business sustainable so we don’t want you to put your hard earned money or scarce time at risk. So let’s plan it on paper first.

Unknown 7:00
In the financials, keep them simple, keep them grounded in reality, understand them. So we want you to don’t fail out in the marketplace fail on paper first. The great part about that is you can revise it and try again. Point number two, it forces you to think to every phrase, I call it turning over every rock mentally, when you’re thinking about your business, you’re thinking about the parts of the business you love. You are not thinking about the parts of the business that you don’t love, which are equally important. They can actually be your success factors. So my plan you’re going through the entire formal planning processes, even the parts you hate turning over those rocks, touching those bases, and being Atlas. Let’s take logistics. For example, if you’ve got a couple service business, you don’t have to have a huge section on logistics. However, if you’re a moving company that packs moves and even stores household goods and business goods for people while they’re overseas for five years, logistics take on a whole new meaning turn over that rock. Is there any juice there if there’s not move on. The third reason is organize your thoughts just write things down.

Unknown 8:00
I work with very creative people that all these ideas are bouncing around in their head. They find that when they actually write these ideas down into one document, it frees up their creative brain. They can go on and explore new ideas. So it helps them stay organized. One place to find everything. The fourth reason I call this curb the bright shiny object dragon. A lot of the folks I work with are wildly creative, but this helps them focus on their priorities, what is actually going to make their business grow, remember, it helps them remember their ideas and act upon them. I also talked about this as parking the rest of the ideas on a shelf, you’ve got a business plan, this new idea pops into your head that’s lovely. Put it in your business plan for a future product. It doesn’t go away. You’re not going to forget about it. But you’re not going to act on it now because it’s not the highest and best use of your time. Again, it frees up your mind is the most important reason for yourself. It’s your life and your business. I want you to make the I want you to make both of them the best that they can be. So this is really all about you.

Unknown 9:00
The sixth reason is the reason most people put number one they want to get a bank loan their landlord their banker someone needs this business plan that’s lovely but I go back to number five do it for yourself first make sure that you’re not putting all your assets at risk. I love your number six there, Robin of needing a bank loan. because really it is the that is the reason most people come into, say, a Small Business Development Center or another economic development agency like that is because they’ve gone to the bank of the bank and said, Hey, where’s your business plan and then they then they are forced to create the business plan and really most often than not if you’re if you’re listening to us right now and you’re thinking about starting up a business Do not wait for the point in which the SBC counselor or your your banker tells you Where’s your business plan. You should really be thinking about this from the get go for all of the reasons that Robin said and more so thank you for that. Robin. At this point. We have defined a business plan we’ve talked about the differences between business plans.

Unknown 10:00
Lean Startup canvases. And otherwise, we’ve given ample reasons for why you should start a business plan. And now in this segment, what I’d like to do with you, Robin is to talk some about the fundamental structure of the business plan. And then we’ll probably close out that segment with what we do with the business plan once we have the business plan. So let’s get into it. What does a business plan physically and visually look like? What’s its structure? And why is it laid out in that particular order traditionally, and why do you prepare it in a different order? Because I know you do. So demystify the business planning process for small business startups.

Unknown 10:40
I would be happy to rate and I want to give an example here a while back, I was taking a chemistry class and it was a college level chemistry class. I’ve never taken chemistry is high school, I get into one class and I completely bombed I failed. I withdrew within one day went over to another school, another university took a chemistry class and then

Unknown 11:00
thing that professor told me was, he said, for those of you who don’t have a background in chemistry, this is just like following a recipe or doing anything step by step, follow through the process, and you will have your experiment and be successful. In the end. That’s the same approach to a business plan. People get very excited about business plans and very worried about them. It’s kind of like a recipe, there are certain standard parts to a business plan. And I’m going to go over those right now. And then I’ll go into more depth in the different parts. And the really important part about this is that every business plan is going to be different. There is not one process that will capture all businesses are all business plans, you’re going to have to choose the parts that are important to your business plan. The general parts though are there will always be a cover page that’s going to give some specific information. There’ll be a table of contents because you want your readers to be able to find the parts that they need. There’ll be an executive summary a company description then we’re going to get into strategy I pull strategy out different people put strategy in different places, but I like to have

Unknown 12:00
His own category I think is critically important, then you’re going to go over the industry and market analysis that’s going to include your target market, your market research, competitive analysis, then you’re going to talk about your products and services. Again, that’s that’s a portion that I always pull out by itself, because that is important. You’ll talk about your value statement in the intellectual property aspects that you have. Then you’ll talk about your pricing strategy. And again, that’s one section that I pull out because I want you to understand exactly what you’re charging and what it’s costing you. Robin is actually going to share with me her outline of these portions of the business plan. So I’m going to put that into the show notes for you. So as Robin is describing these, the outline of the business plan, you can actually follow along there at web and beyond cast calm. The next section I talked about is the marketing and sales plan. Again, I pulled that out specifically because I want you to know very clearly what your tactics and what your marketing budget is going to be. Next we talked about the management operations plan then finally the financials your income

Unknown 13:00
statements, cash flow statements and balance sheets, breakeven analysis and your personal financial statements. And then for everything else that didn’t make it into plan that you feel is important. There’s the appendix. And that’s it. So that’s the outline of the business plan. Now we’re going to look more in depth into each one of these sections. Take it away, Robin, let’s move on to the company description there. You’re going to include your name, your address, your phone number, just the facts, ma’am. Include the business location, if it’s different, or if there are multiple locations you want to talk about your classification. Are you retail or wholesale or service or what are you you’ll talk about your legal structures, assuming that all the aspects of your company, your start date, your history, if you have some or if you’re a startup, your projections, the talk about your team, your board of advisors, all that very factual information. Then the section that I love, and this is actually where I do start with clients. A lot of times rate is their strategy. This is going to include their mission, their vision, their values, their SWOT analysis, and for those of you have never done this. Why

Unknown 14:00
analysis that’s strengths and weaknesses, which are internal, and opportunities and threats, which are external, you have no control over. So that’s the SWOT analysis. Then you’ll talk about your goals and objectives out of three to five years, 10 years for your major goals. And you’re going to include your marketing goals later here, we’re talking about sales and time. Your executive summary is the best part of your plan is actually the last part of the plan that you do. But one did you pages no more than that. Think of it as introducing your company to someone that has never met you before? What do you want to tell them? Your mission and vision should be parts of what you’re talking to them about? give a brief history of your company. Talk about your management team? What milestones have you achieved, or will you achieve? What are your future expansion goals? Who is your target? What do you offer? Why will your idea your company work and be profitable what makes you different include some basic financial information here to just the highlights you include a lot more later on in your in your financial section. This is your plan.

Unknown 15:00
be brutally honest about this section. Next is your industry and market analysis for the industry analysis. How big is the industry? Next, you’re going to do industry and market analysis, what is the nays code, you can find the next code, which is the NA IC s code or, or sick code. I will put a link to the next code search tool in the show notes. So you could just check that out. And you can find your own next code from that place. Perfect. Thank you. Right. And so for some businesses that will be very relevant for some businesses, it won’t be as relevant at all, if it’s relevant. Put it in there. Is your industry growing? What’s the outlook? Is it stagnant? Is it dramatically changing? And here I talk about technology technology is impacting almost every industry on the earth today. So what is technology doing to your industry? What market share Do you expect to gain? Keep this simple you’re starting out as a small business. You do not need 3 billion customers as you’re starting out. Keep it simple. What can you logically expect to gain over what period of time

Unknown 16:00
How many clients do you need at that price that you want to charge given your expenses to make a profit? And does that result seem reasonable? Are there any regulatory restrictions or trends that are negative? That’s the type of thing you have to look at your industry analysis next year market analysis target market, you will hear a lot about target market and it’s very, very important. Who are they? Who are the people that will be your customers? Where do they hang out? What are the demographics, what are their ages, their gender, their household income, their education level where they’re psycho graphics? Do they like social media? Do they prefer flyers? All types of things we’re going to talk about with your target market, but most specifically, where do they hang out? How are you going to find them? One thing that I want people to typically add in their business plan are techno graphics and techno graphics is basically how technologically savvy are those people because it really makes a difference on the internet. how sophisticated people are going to be with technology as it relates to your product, even if your product has not

Unknown 17:00
Nothing to do with technology, because that’s going to be how you get in front of them. As you were talking about Robin, I love that. I’ve never heard that phrase. And I am going to include that for now on with your permission. I love it. You got to find them. So where are they? And how savvy are they and how are you going to reach them and where they comfortable? We talked a lot about niche a target niche or niche market. I wanted to be niche but not to niches sort of like Goldilocks, you want the just right niche? Are there enough buyers in your niche? Is it big enough for you to create your business? That’s what we’re talking about. We’ll talk about market research include any primary or original research, those are focus groups and surveys and speaking with others, and secondary research generated by others articles, trade journals, the Bureau of Labor and stats, that type of research so include both primary and secondary research and then a competitive analysis. Who are your competitors? I want you to find the closest competitor to you. Who are they? How are you going to beat them and a lot of times today, people can collaborate with our competitors if the niche is locked.

Unknown 18:00
off, you might have just a little bit different offering and, and collaborate with some of your competitors. Some competitors you will never be able to collaborate with the answer will live with you and you’ll have to decide which approach you’re going to take. When you’re when you’re thinking about competitive analysis. You should also probably think about marketing alliances because many times your competitors are people who don’t, who may serve the same population, but who will like you and not like them or vice versa. Be prepared for the fact that you can’t help everybody and not everybody will like you. So you can actually work with your competitors as marketing Alliance partners, where you market together to the same group of people. I see this all the time with graphic designers, for example. So graphic designers have styles and personalities that don’t mesh with everybody. So if you work together as graphic designers, you can actually both help one another by reducing your overall marketing costs your marketing advertising dollars and

Unknown 19:00
Make more business, right? Get more business by the fact that you’re working together to communicate out to the same audience. So don’t think about this as a scarcity mindset, you really need to think about this as how can we how can we have an abundance mindset that there’s more than a business for both of us for all of us if we work together? That’s an awesome concept. Right? I agree with you, 100%. Next, we have products and services. This is the value statement I talked about before your USP unique selling proposition Why are you better what’s your competitive advantage, spell it out, you talked about it all throughout your plan and bits and pieces now put it all together your products and services we want here your names and descriptions, what are your products is what are their features and benefits include some pictures include some promotions and you can also put your promotions and marketing material in the appendix. If it’s too bulky to put here in the ongoing research and development that you have talked about here any innovative new products that are coming out

Unknown 20:00
down the road. I also like to include the intellectual property aspects here. If you have any way to protect your products, please do so are there any trademarks, service marks, trade, secret patent, anything like that, that you can arm secure to protect your product pricing strategy? Again, I like this section all by itself to make sure it does not get asked what are you charging? And why are you taking a high price strategy, a low price strategy or a moderate pricing strategy? What perceived value does this lend to your company your products and services. There are some companies who are absolutely high end high value companies. There are other companies that are going to compete more on volume and have a lower price here. I always talk about Nordstrom and Walmart. I can buy a dress or a suit at both companies. I’m going to pay different price point at each company. I’ll have a different shopping experience these at each company. If I go online, look at their websites, two different experiences. I can tell you that both companies will make money

Unknown 21:00
Which strategy Are you going to follow? And this? This absolutely goes into your branding. How will you make a profit? That’s what you’re really talking about here? And do you have a free offering are using a freemium model where you’re going to bring something, offer something for free with the enticement of bringing this person into your marketing plan? marketing sales plans, this is really your promotional and sales strategy. You’ve already decided your company strategy, your mission, your vision, all the other information, but how are you actually going to sell your product here? We talked a lot about tactics. Let’s just go through a few of them a website by the way, please have a website there are way you probably know the number much more strongly than I do. But two thirds of the companies in the United States don’t have websites. Is that accurate? It’s it’s currently 60%, 60%

Unknown 21:44
of small businesses in the US do not have a website and I find that shocking people will rely on Facebook and other social media platforms and that’s part of the the marketing strategy but I encourage you to have a website also are you getting

Unknown 22:00
is a blog a blog is really social media but I break it out and how about your social media platforms all the platforms you’re going to use now or in the future include them here. I’m also including podcasts here and videos. We have an email newsletter and I really strongly encourage people to have newsletters. Every time I talk about this CMOS, I Oh, I never open newsletters and newsletters are no longer effective. It’s actually not true. When I ran the nonprofit no matter what my open rate was. Every time I put out my newsletter, we had calls for appointments, we had calls for people to take our seminars, there was activity every time we put out our newsletter, so newsletter can be very valuable. Do you have any free lead ins? You have any white papers, a free console resources page, what are you offering on your website or in your social media platforms for free always include networking. Talk about your referral network, this is your referral partners. And by the way, referrals are two way street. You can’t just assume that somebody’s going to refer to you all the time and you never refer back to them. So make sure you’ve got a two way referral relationship. You can do that.

Unknown 23:00
Working one on one. You can go to lunches and coffees and you can do online networking. I have a university that does online networking is one of my favorite activities. I meet people from all over the world through this online networking platform. You can have video meetings, you can go to chamber meetings, all types of networking, and then the one on one follow ups from other networking events. Make sure when you go networking and you meet someone that you follow up with them. I love the salespeople who said every lead that followed up on a sale last we’d be a speaker, you can be a paid speaker. Otherwise be strategic about your time. Are you going to put some books out some paid books or print books or ebooks and don’t forget phone calls. I now live in a more rural part of the country in the urban part of the country where I live before people didn’t pick up the phone and call as much here telephone is the primary way to contact people. So figuring out all the different methods and which one works best for you. Are you going to offer rewards will you put ads out we use the newspaper will use social media ads. There are so many marketing tactics but that’s just scratching.

Unknown 24:00
The service and that’s where you want to put your marketing tactics in your business plan. And other part of this is your marketing budget. What do you need to spend by when to achieve your marketing results. If this figure is too low or too high, go back and adjust your tactics. I can give you an example of a person who started a brick and mortar and spent $30,000 in marketing and had almost nothing to show for it at the end of six months. That was my heart hurt for this person, but she just overspend on her marketing and didn’t use good tactics. So there are lots of ways to spend your marketing dollars, make sure that you’re optimizing your marketing dollars. Next, we talk about management and your operations plan. Look at your distribution, your location or your bricks and mortar. Are you going to be online? Do you have logistics aspects would you have for floor plans? This would be like a yoga studio that was opening in a town and they had to coordinate all of the pieces of the build out and setting up the yoga studio and hiring their Yogi’s and all that fun stuff. Absolutely.

Unknown 25:00
Yes, and that’s an important part. For a lot of businesses. If you’re a solo printer from a home based office, it’s not going to be as important. So again, this is a great example of where some of these aspects will make it into your plan. Some will not. What are your operating regulations? Is there anything specific to your industry? Are there any licenses or regulations or zoning or fees that you have to look at any special taxes, then look at your HR human resources include your org chart here, your organizational chart, even if it only includes one person for now, that will clearly show you all the different tasks that you’re doing, how many hats are you’re wearing. I also like to include your risks and challenges and future plans, spell them out here, then become to your financials. If you’re a startup, I like you to include a startup list. What are you paying for is you’re starting a company list all the expenses for your professional expenses, you might have some research and development you may be paying someone to create your legal entity. You may be paying for trademarks, you may be getting some insurance, putting in telephones, whatever your startup expenses are, then as you

Unknown 26:00
Move forward, I’d like your income and expense statement for that that’s money flowing into your company and money leaving your company and break it into as much detail as you need to have, I want you to have a very clear picture at the end of each month, whether you’re in the black, or if you’re in the red, if you’re in the red, you’ve spent more that month, then you’ve had money coming in, and there’s no cash that you can go to to make up that gap. So you need to know when that’s going to happen so that you can get alone or put some kind of financing in place to turn that red magically into black. We talked about your balance sheet. That’s the stuff that you have. So do you have plans and equipment? Do you have a building a lot of our companies do not have robust balance sheets because they’re very lean their home based businesses and they don’t have a lot of inventory. So it will depend again on your business. But you always want to have a picture of your stuff and that’s the balance sheet. Your income and expense statement will be a point in time so for example, you might want to create your your income statement per quarter.

Unknown 27:00
for six months, you can compare. If you use a program like QuickBooks, you can can probably compare your income statement. Maybe I’ll just pick a month, march of year, why over march of the prior year, and that will give you historic look back as you grow your business, then make sure you include your breakeven analysis and your personal financial statements specifically if you’re going for a bank loan. And often for leasehold, we’re going to use a very simple example let’s say that you’re making handbags or persists and you’re going to sell your purses for $10 is going to cost you $7 to produce those verses. If you subtract the seven from 10, your profit would be $3 per unit per purse. Let’s just say that you had fixed expenses of $300 per month. These are not actually realistic figures, but they’re easy for math. So if you were to take that $3 profit per unit that you sell divided into the 300, you would have to sell 100 units each month just to break even to pay your fixed expenses in that scenario.

Unknown 28:00
At that point, you better really enjoy, make it 100% per month, because there’s no profit. So you’d have to add your profit on to that, and then divide that $3 into the profit that you want to make. So that’s just a very simplistic way to look at your breakeven analysis. There are lots of awesome calculators out there online that you can use to plug in the numbers and calculation breakeven in the appendix you’re going to include things that need to be included in your business plan, but they’re not pertinent to the main body that will be perhaps your floor plan, always the resumes of your top key personnel go in here. And that’s it. Fantastic. So So you’ve given us a detailed look into the business plan parts and its construction. And so at this point, once a business plan is as the lyrics go to the song Signed, Sealed, Delivered, it’s yours. What do you do after all those long hours of working on it? What What do you do with the business plan? How often do you look at it? How often do you update it and and I know that some people say, you know, you should remember

Unknown 29:00
Right it every year, every 10 years, there’s all kinds of

Unknown 29:04
advice out there. What’s the life of a business plan look like. It’s really a living document. You mentioned that before. And it truly is the person who’s going to make their business plan to spend all this time on it, and then turn it into our never look at it. Again, that’s not the approach that you should take. I really believe that you need to look at your business plan. And it really depends on the stage you are with your business, some people who want to look at it every year. And I think that’s a really great approach. As you’re starting out though, I’d like to have you look at it just review it monthly in the beginning and then you might progress a quarterly and then I believe that you always need at least an annual review but when something comes up and a problem occurs bank you go right back to your business plan. With that. That takes us to our final segment of the show which is best tool of the Week. This week. I have a tool for everybody called n loop and n loop is a business planning software. So what you do with this business plans

Unknown 30:00
Software is that you’re able to open up an account online, you could try it for free, there’s a, there’s a fee associated with it if you plan to, you know, go forward with it, but it allows you to share it with users. And you can create real time performance metrics. So you can score yourself against these particular metrics. You could put text in and customize that text, it does financials, that automatic automatically generates financial reports. It’s just a really great tool for being able to give you an understanding of your business plan and help produce the business plan and even has like a pass fail reporting functionality so that it can you can look at critical issues and identify those and figure out whether or not this is actually going to work for you. And I really liked the tool. It’s just it’s a simple tool with a lot of stuff working under the hood, and I think that’s really useful. One quick runner up though, is actually on the SBA website, the Small Business Administration. If you go to sba.org, they have a business planning tool and their financial tools.

Unknown 31:00
is actually really good for free tool. It’s really great for being able to put together your financials. So I put a link to both end loop and the SBA business plan tool in the show notes, I put a couple of honorable mentions in there as well, so you can check out those. And that brings me to the closing of this episode and our time together. Robin, thank you so much for being here on the show with us. Ray. Thank you for inviting me. It’s been a pleasure and an honor to be on your show. Absolutely. How can people get in touch with you after the show? if they have questions? The very best way is to go to my website which is startup to growth calm and that’s s ta RT up to G r o w. t h.com. There’s a Contact link there. You can also email me at Robin at startup to grow. com. I would love to hear from you. If you have any questions. Please reach out wonderful great so people can go to start up to growth.com and reach out to Robin or Robin at startup to growth calm and reach out to her if you have any questions.

Unknown 32:00
With that before we close out this cast if you have a comment or question, please feel free to visit the podcast page at web and beyond cast.com. And if you want to send a direct message to us, click on the Contact button on the website. There. You can ask a question suggest a topic for a future episode and we can get back in touch with you if necessary. Also, if you are able to help us out, please leave a rating or review on Apple podcast iTunes or Stitcher on your phone or desktop. This helps us know how we’re doing and it encourages apple and the other podcast directories to display web and beyond cast to more listeners. So thank you. Thank you for listening to web and beyond cast where small business comes to learn about marketing and managing on the web and beyond. I’m your host racing Smith. Until next time, here’s to your small business success on the web and beyond.