Business Toolkit
4. Plan
ONE YEAR TIMELINE FOR ENTREPRENEURS
Starting your own business is not something to be rushed into. Careful, advanced planning can ensure the success of your venture. Below is a suggested one-year plan.
ONE YEAR BEFORE START-UP
· Decide what business you want to start. Be specific in your business definition.
· Assess the impact on your family and personal life. How will this affect your relationships? Will your family support the use of finances and time?
· Begin research. You must determine if there is a need for your product/service. This research can be performed by students, professionals, or even on your own.
· Contact the Small Business Development Center at University of Wisconsin-River Falls - 715-425-0620.
SIX MONTHS BEFORE START-UP
· Determine the focus of your business. What do you want to specialize in? It is easier to excel at one area than at many.
· Start writing your business plan.
· Define your target markets. Who is your intended clientele? Who should you aim your advertising towards?
· Research business and trade organizations. Most areas of business have agencies and organizations set up to facilitate business. Take advantage of what these groups have to offer.
FOUR MONTHS BEFORE START-UP
· Name your business. Be careful in deciding on a name and be aware that someone may already be using the name. Have a few back-up ideas. You can check to see if a name is being used by contacting the Wisconsin Secretary of State.
· Make a final selection of the business location. Make sure that the location you choose is within your budget and also fits into your business plan. Cheaper rent may cost you more in the long run. Remember: Location, location, location.
· Select outside advisors. This will be a very hectic time. It will be beneficial to have people you can call on to listen to your ideas, problems, and plans and provide feedback. These people should be able to provide you with guidance, constructive criticism, and feedback. They should be people experienced and knowledgeable in business.
· Choose your business’ legal form. Will you be a partnership, sole proprietorship, or corporation? A legal form should be chosen very carefully as it can impact your business in many ways.
· Set up bookkeeping, accounting, and office systems. How are you going to operate your office? If you are going to keep your own books, make sure your skills are adequate. Will you need to hire a bookkeeper/bookkeeping firm?
· Seek outside demographic information on your targeted customer base. Gather secondary information.
THREE MONTHS BEFORE START-UP
· Determine your cash needs. How much money do you need for start-up? What will be your monthly variable and fixed costs? What is your break-even point? These are all questions that must be answered. You must estimate your cash flow.
· Review preliminary financial objectives. How much profit do you expect to make? Are you planning on making investments? What is your intended cash flow?
· Decide on your pricing strategy. After determining your variable and fixed costs, decide what your markup rate will be. You will also need to consider demand and competitive factors in setting your price.
· Forecast sales. Contact the Small Business Development Center (SBDC) at 678-839-5082 or others in your field to help you forecast accurately.
· Determine your company’s employee needs. How many people do you need on your staff? This is important to decide as it affects your requirements for insurance, cash flow, etc.
· Project your cash flow. Write out an estimated statement of all revenues and expenditures. This statement should cover one calendar year. Also project your net cash flow for the entire year.
· Set up your office, display areas, etc. Have everything exactly as you want it. The last few days before opening are not the time to do this. The look of your store or office sets the tone of your business. You should put thought and time into it.
· Continue working on your business plan.
TWO MONTHS BEFORE START-UP
ONE MONTH BEFORE START-UP
· Fine tune your cash flow budget.
· Review your final checklist.
· Hire your staff. (See Labor/Safety)
· Make sure everything works. It is better to find out that your equipment does not work in advance. In that case, you can make any necessary repairs and be ready to open your doors on time.
THE BUSINESS PLAN
A business plan precisely defines your business, identifies your goals, and serves as your firm’s resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals. The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the plan into several components will help make drafting it a more manageable task. The Small Business Development Center at the University of Wisconsin-River Falls is available to help with understanding how to put together a business plan.
Introduction
· Give a detailed description of the business and its goals.
· Discuss the ownership of the business and the legal structure.
· List skills and experience you bring to the business.
· Discuss the advantages you and your business have over your competitors.
Marketing
· Discuss the products/services offered.
· Identify the customer demand for your product/service.
· Identify your market, its size and locations.
· Explain how your product/service will be advertised and marketed.
· Explain the pricing strategy.
Financial Management
· Explain your source and the amount of initial equity capital.
· Develop a monthly operating budget for the first year.
· Develop an expected return on investment and monthly cash flow for the first year.
· Provide projected income statements and balance sheets for a two year period.
· Discuss your breakeven point.
· Explain your personal balance sheet and method for compensation.
· Discuss who will maintain your accounting records and how they will be kept.
· Provide “what if” statements to address alternative approaches to any problem that may develop.
Operations
· Explain how the business will be managed on a day-to-day basis.
· Discuss hiring and personnel procedures.
· Discuss insurance, lease or rent agreements, and issues pertinent to your business
· Account for the equipment necessary to produce your products or services.
· Account for production and delivery of products and services.
Concluding Statement
· Summarize your business goals and objectives and express your commitment to the success of your business.
· Once you have completed your business plan, review it with a friend or business.
· When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. The business plan is a flexible document that should change as your business grows.
SOURCE: www.sba.gov
Starting your own business is not something to be rushed into. Careful, advanced planning can ensure the success of your venture. Below is a suggested one-year plan.
ONE YEAR BEFORE START-UP
· Decide what business you want to start. Be specific in your business definition.
· Assess the impact on your family and personal life. How will this affect your relationships? Will your family support the use of finances and time?
· Begin research. You must determine if there is a need for your product/service. This research can be performed by students, professionals, or even on your own.
· Contact the Small Business Development Center at University of Wisconsin-River Falls - 715-425-0620.
SIX MONTHS BEFORE START-UP
· Determine the focus of your business. What do you want to specialize in? It is easier to excel at one area than at many.
· Start writing your business plan.
· Define your target markets. Who is your intended clientele? Who should you aim your advertising towards?
· Research business and trade organizations. Most areas of business have agencies and organizations set up to facilitate business. Take advantage of what these groups have to offer.
- Start looking for the best location for your business. Do you need little or lots of space? Would your business be better suited in the city or in another part of the county? Is a storefront location needed or can you work from your home? Location can make or break a business. Conduct the search on your own or contact a real estate agent.
FOUR MONTHS BEFORE START-UP
· Name your business. Be careful in deciding on a name and be aware that someone may already be using the name. Have a few back-up ideas. You can check to see if a name is being used by contacting the Wisconsin Secretary of State.
· Make a final selection of the business location. Make sure that the location you choose is within your budget and also fits into your business plan. Cheaper rent may cost you more in the long run. Remember: Location, location, location.
· Select outside advisors. This will be a very hectic time. It will be beneficial to have people you can call on to listen to your ideas, problems, and plans and provide feedback. These people should be able to provide you with guidance, constructive criticism, and feedback. They should be people experienced and knowledgeable in business.
· Choose your business’ legal form. Will you be a partnership, sole proprietorship, or corporation? A legal form should be chosen very carefully as it can impact your business in many ways.
· Set up bookkeeping, accounting, and office systems. How are you going to operate your office? If you are going to keep your own books, make sure your skills are adequate. Will you need to hire a bookkeeper/bookkeeping firm?
· Seek outside demographic information on your targeted customer base. Gather secondary information.
THREE MONTHS BEFORE START-UP
· Determine your cash needs. How much money do you need for start-up? What will be your monthly variable and fixed costs? What is your break-even point? These are all questions that must be answered. You must estimate your cash flow.
· Review preliminary financial objectives. How much profit do you expect to make? Are you planning on making investments? What is your intended cash flow?
· Decide on your pricing strategy. After determining your variable and fixed costs, decide what your markup rate will be. You will also need to consider demand and competitive factors in setting your price.
· Forecast sales. Contact the Small Business Development Center (SBDC) at 678-839-5082 or others in your field to help you forecast accurately.
· Determine your company’s employee needs. How many people do you need on your staff? This is important to decide as it affects your requirements for insurance, cash flow, etc.
· Project your cash flow. Write out an estimated statement of all revenues and expenditures. This statement should cover one calendar year. Also project your net cash flow for the entire year.
· Set up your office, display areas, etc. Have everything exactly as you want it. The last few days before opening are not the time to do this. The look of your store or office sets the tone of your business. You should put thought and time into it.
· Continue working on your business plan.
TWO MONTHS BEFORE START-UP
- Prepare your marketing plan. How are you going to market your product/service, and how much will it cost? Are you going to use publicity? Are you going to use paid advertisement? You must decide how you will go about introducing your business to the public.
- Get your business license. (See Occupational Tax)
- Review non-financial objectives (public image, legal questions). How do you want the public to see your business?
- Prepare a preliminary balance sheet. Contact the SBDC for assistance.
- Secure necessary financing. Whether through a private lender or through other sources, you must obtain the necessary amount of start-up capital.
- Secure insurance coverage if applicable. (See Labor/Safety)
- Complete improvements to your facility.
- Start your hiring process. (See Labor/Safety)
- Refine your business plan.
ONE MONTH BEFORE START-UP
· Fine tune your cash flow budget.
· Review your final checklist.
· Hire your staff. (See Labor/Safety)
· Make sure everything works. It is better to find out that your equipment does not work in advance. In that case, you can make any necessary repairs and be ready to open your doors on time.
- Implement marketing, promotion, and opening plans. This will be a good time to start advertising in local newspapers, radio, and television if your budget permits. Remember: Word of mouth is your most powerful publicity! It’s also the least expensive. Spread the word.
THE BUSINESS PLAN
A business plan precisely defines your business, identifies your goals, and serves as your firm’s resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals. The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the plan into several components will help make drafting it a more manageable task. The Small Business Development Center at the University of Wisconsin-River Falls is available to help with understanding how to put together a business plan.
Introduction
· Give a detailed description of the business and its goals.
· Discuss the ownership of the business and the legal structure.
· List skills and experience you bring to the business.
· Discuss the advantages you and your business have over your competitors.
Marketing
· Discuss the products/services offered.
· Identify the customer demand for your product/service.
· Identify your market, its size and locations.
· Explain how your product/service will be advertised and marketed.
· Explain the pricing strategy.
Financial Management
· Explain your source and the amount of initial equity capital.
· Develop a monthly operating budget for the first year.
· Develop an expected return on investment and monthly cash flow for the first year.
· Provide projected income statements and balance sheets for a two year period.
· Discuss your breakeven point.
· Explain your personal balance sheet and method for compensation.
· Discuss who will maintain your accounting records and how they will be kept.
· Provide “what if” statements to address alternative approaches to any problem that may develop.
Operations
· Explain how the business will be managed on a day-to-day basis.
· Discuss hiring and personnel procedures.
· Discuss insurance, lease or rent agreements, and issues pertinent to your business
· Account for the equipment necessary to produce your products or services.
· Account for production and delivery of products and services.
Concluding Statement
· Summarize your business goals and objectives and express your commitment to the success of your business.
· Once you have completed your business plan, review it with a friend or business.
· When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. The business plan is a flexible document that should change as your business grows.
SOURCE: www.sba.gov
***To determine these amounts, get estimates from suppliers, contractors, professionals and/or government authorities to ensure accurate amounts.
FINANCING INFORMATION
When starting a business, one important consideration is where to obtain capital to back your venture. Most start-up businesses require a capital contribution by the entrepreneur, usually 20%. The remaining financing may be available from your local banks or may require private investors. You may contact SBDC for a consultation. There are several loan programs available to businesses, all of which require bank participation. Examples include the following SBA loans currently available.
All loan programs require that certain standards be met. A loan applicant must be of good character, show the ability to operate a small business successfully, and have a good reasonable amount of his/her own resources to invest to withstand possible losses. In addition, the following will likely be required:
Credit Report
Collateral adequate to secure the debt; list of collateral and its value
Appraisals required on real property used as collateral
Personal guarantees required of those persons (or companies) with 20% ownership
Secondary collateral may be required
Personal financial statements & financial statements of business (if applicable)
Business Plan
Local Banks
MidWestOne Bank
304 Cascade St.
PO Box 188
Osceola, WI 54020
715-294-2183
https://www.midwestone.com/
Royal Credit Union
500 Chieftain Street
Osceola, WI 54020
(715) 294-4200
https://www.rcu.org/
Hiawatha Bank
409 N Cascade St
Osceola, WI 54020
(715) 294-4000
http://www.hnbank.com/
First National Community Bank
111 State Road 35 N.
Dresser, WI 54009
715-755-2174
https://fn-cb.com/
FINANCING INFORMATION
When starting a business, one important consideration is where to obtain capital to back your venture. Most start-up businesses require a capital contribution by the entrepreneur, usually 20%. The remaining financing may be available from your local banks or may require private investors. You may contact SBDC for a consultation. There are several loan programs available to businesses, all of which require bank participation. Examples include the following SBA loans currently available.
- SBA Guaranteed Loan Program 7(A). This program provides financing to small businesses through guaranteeing a percentage of the bank’s loan to the business. Eligible expenditures are for land and building, machinery and equipment, working capital, and some restructure of existing debt. The maximum SBA will guarantee is $1.5M and not more than 75% of the total loan.
- SBA 504 Loan Program. This program provides financing for small businesses through a low interest, fixed rate, and a long-term loan. The Small Business Administration takes a second line position behind the bank. Eligible expenditures are for land and building, long-life machinery and equipment. The minimum SBA will finance is $125,000, and the maximum is $4,000,000 for manufacturing and job creation/retention.
All loan programs require that certain standards be met. A loan applicant must be of good character, show the ability to operate a small business successfully, and have a good reasonable amount of his/her own resources to invest to withstand possible losses. In addition, the following will likely be required:
Credit Report
Collateral adequate to secure the debt; list of collateral and its value
Appraisals required on real property used as collateral
Personal guarantees required of those persons (or companies) with 20% ownership
Secondary collateral may be required
Personal financial statements & financial statements of business (if applicable)
Business Plan
Local Banks
MidWestOne Bank
304 Cascade St.
PO Box 188
Osceola, WI 54020
715-294-2183
https://www.midwestone.com/
Royal Credit Union
500 Chieftain Street
Osceola, WI 54020
(715) 294-4200
https://www.rcu.org/
Hiawatha Bank
409 N Cascade St
Osceola, WI 54020
(715) 294-4000
http://www.hnbank.com/
First National Community Bank
111 State Road 35 N.
Dresser, WI 54009
715-755-2174
https://fn-cb.com/