"Creating a Business Budget"
Tools for Creating Your Business CREATING YOUR BUSINESS IDEA Before you can have a successful business you have to have a sound business idea. Rather than trying to find a million dollar business concept, look for an idea that will work FOR you because it is unique TO you. Outline for your business idea I. Know yourself A. Beliefs 1. the cosmological questions 2. the nature of work 3. the evolution of your beliefs B. Values 1. what values are most important to you 2. what ideals would you be willing to sacrifice for 3. what personal characteristics or behaviors are you working to change or eliminate within yourself C. Dreams 1. describe all the dreams and desires that you have for your life, they do not have to be realistic II. Know your service A. Relationships 1. who will benefit from your service B. Touching 1. know what „touching‟ or massage can and/or will do for those who will benefit from your service—be an expert C. Intention 1. what is your intention with your bodywork 2. what is your intention with your business D. Skills 1. what training have you had 2. how many hours of practice have you had, or how many massages have you done 3. what will your menu of services be III. Know your market A. Personal profile 1. list your demographic characteristics—age, gender, where you live, etc. 2. develop a lifestyle analysis 3. generalize yourself into what markets you represent B. Who do I know? 1. list the people you know 2. list the relationship you have with each person you know 3. list people you would like to know C. Market analysis 1. affinity 2. accessibility 3. affordability IV. Your business idea A. your vision B. your service C. your market CREATING YOUR BUSINESS PLAN Writing a business plan is the first formal test of whether the idea for your business can stand up to the harsh light of reality. If the business still looks good after you have examined it on paper, then it is probably worth pursuing. Some purposes for writing a business plan: 1. To give you the internal conviction necessary to pursue your idea 2. To convince others that you know what you are doing Some tips for writing a business plan: 1. Remember that a business plan is only a description of your current best understanding of the ecology of your business—it may change and evolve 2. The easiest time to work on a business plan is before you start a business 3. It‟s a good idea to schedule regular times when you will review and modify your plan, at least once a year—when your business is young you may want to plan on monthly or quarterly updates 4. Remember that your goal is to create a public document that is linear, logical, grammatically correct and visually impressive 5. Remember to create a business around work that you love 6. Review your commitment to operating an honest business, and be sure your plan reflects that commitment Types of business plans You should write the type of business plan that best suits your needs: A Complete Business Plan will help you gain a thorough understanding of all aspects of your business. This type is especially helpful if you are starting a new business. This form of plan is also excellent for convincing prospective backers to support your business. You‟ll be more successful in raising the money you need if you answer all of your potential backers‟ questions throughout the plan. A Quick Plan (one-day plan) will allow you to produce a basic business plan in a short time—as little as one day in some cases. If you know your business, are familiar with and are able to make financial projections and have done the necessary research, you may be able to create a plan in one day. But understand that a quick plan is a stripped-down version of a business plan. It won‟t convince you or your prospective backers that your business idea is sound. It is appropriate only if your business idea is very simple or someone has already committed to backing your venture. A Customized Plan allows you to start with a quick plan and add components from the complete business plan to suit your needs. When deciding what to include and what to exclude ask yourself: Which of my statements are the strongest? Which statements do my backers want to see? Outline for a complete business plan I. Title page II. Table of contents III. Executive summary IV. Business description V. Market description VI. Marketing plan VII. Business risk analysis VIII. Management plan IX. Financial analysis X. Objectives/milestones XI. Controls and reporting XII. Appendices Outline for a quick business plan I. Title page II. Plan summary III. Table of contents IV. Problem statement V. Business Description VI. Business Accomplishments VII. Sales Revenue Forecast VIII. Profit and Loss Forecast IX. Capital Spending Plan X. Cash Flow Forecast XI. Supporting Documents Brief description of each part of your business plan The outlines and sections included in this guide are suggestions only. Remember that the best business plan is one that accurately reflects your business idea, so feel free to add elements, rearrange their order, rename them for clarity, or eliminate them entirely at your discretion. Title Page—The title page doesn‟t have to be elaborate. Just include a line which states “Business plan for” or “Business and loan proposal for” followed by your business name, the date and your name, address and telephone number. Table of contents—List all of the topics contained in your business plan, along with the page number on which the topic begins. Include a list of Exhibits, if you have any, and Appendices. Generally, most private practice or small business plans will not be longer than 25 to 30 pages. If you are developing a large business, your plan may be as long as 75 pages. Executive summary—This is the most important part of the business plan. Your reader will usually decide within the two minutes it takes to read this part of your business plan whether or not they think your business idea is feasible. Often, people write this section last because they have trouble describing the business accurately or succinctly prior to the completion of the plan. Include a description of your service, your market, your background (and those of other principals), and your goals. If your goal is to raise money, you should mention the amount you are seeking, what form you want it in (loan or equity investment), and how the money will be used. Include all of the most important points and emphasize the positive aspects of your business. Let your enthusiasm come through. Business description—Your business will offer a service, not a product. In this section, you will describe exactly the nature of your service and its unique features. What type of bodywork will you provide? What will you achieve through your bodywork? How will you offer your services? What will the facility look like? Do you offer any special amenities or an outcall service? What image do you want to project? Are you low cost? Exclusive? Medical? Personal service? Alternative health? These pages should make your business come to life for the reader. They should know exactly what to expect when they walk through your front door. Include any photographs, drawings, floor plans, or other graphics that can help bring your plan to life. Market description—In a shorter business plan, you can combine this section with the next. The market description needs to include a detailed profile of your customer. Distinguish whether your customer will also be the one who uses your service. For example, in a seated massage business, the corporation which hires you is your customer, but the employees are the ones who use the service. Define the demographics of your customer, including: geographic location (work and home); income; age; interests and hobbies. You may want to conduct a market survey, and display the results in this section. Be sure to note whether any other businesses are offering a similar service to the same market and what make your service different/better? Marketing plan—This section describes how your customer will find out about your service, and how you will deliver the service to the customer. Are you going to rely on advertising, referrals, direct selling, public relations, or a combination of these? What will happen to other businesses trying to reach the same market with a similar service, and how will you respond? Include a chart of what sales volume you hope to achieve over a specific period of time. Explain whether your intention is to create a new market for massage services or tap into an existing market? Be sure to define the rationale for every strategic marketing decision you make. Business risk analysis—This section is not seen in all business plans, but it will let the reader know that you are aware that your business, like any other, faces certain difficulties. Write them down and explain how you will deal with them. Also, explore your honest limitation and how you are going to compensate for them. Management plan—Here is where you define who the people are who design and execute the business plan and describe their backgrounds. If there is only you, then you can title this section “Owner‟s resume and financial statement”. If your massage business will hire other bodyworkers, describe who you hire, how you hire them, how they will be trained and supervised, and include their job description. Financial analysis—Your financial statements should be projected for each year for the next three to five years. If you are seeking money for your business, be sure to include how you will pay back the money in your budgets. You will need an income and expense budget as well as a balance sheet. A cash flow statement should also be included. The best thing to do is to first project all of you income and expenses in as much detail as possible, and then put it into summary form. Objectives and milestones—Objectives are what you want your business to accomplish, milestones are when. Simply put, you need to make specific, measurable goals that are always linked to a timeframe or a “by when”. Some business plans put this in a chart form, marking goals on a calendar with weeks, months and quarters. Others use a narrative to describe the objectives and milestones. Objectives should relate to organizational development, the marketing plan, or financial goals. Controls and reporting—You need systems to evaluate whether the objectives of the business are being met, and what the most efficient and effective means to meeting those objectives are. Generally, you will want to include what daily, weekly, monthly, quarterly and annual reports will be used to control the flow of business. A daily report might include how many clients were massaged, how many phone calls turned into appointments, or how much money is the bank. Appendices—This section contains all of the detail, which will support or amplify the statements and figures which you have included in the main part of the business plan. Here will be your financial detail, key employee resumes, job descriptions, copies of client cards, newspaper clippings, sample press releases, full details of marketing surveys, copies of contracts and leases, example of your logo, and brochures. The binding—Your plan should be bound together in a secure fashion, which is easy to read. Local print shops can often help you find the most effective form of binding for your plan. Be aware, that some change or correction may need to be made at the last minute, so make sure that it‟s easy to insert or remove something quickly.