Writing a Business Plan – Presented in American Sign Language (ASL)
August 28, 2019
Now we will start. We just explained how to start a business. Now we will discuss how to write a business plan. The Arkansas SBTDC helps the deaf and hard of hearing start a business. The SBTDC is a joint partnership of the Small Business Administration and also of UALR’s College of Business. The SBTDC has a network of seven offices in Arkansas. Their goal is to help you start up a business. Also, for those of you who already have a business, they can help expand businesses. So they are very supportive and helpful. They also provide one-on-one feedback and training. This one-on-one discussion is confidential. This presentation will include information from some volunteer speakers on how to start a business. If you need more information, there is a website at asbdtc.ualr.edu/training. The ASBTDC will advise you and give you feedback on business ideas with one on one consultations. They will advise you on whether or not to proceed with your business idea. They have extensive information on market research because of their sophisticated mapping software that can identify business and marketing opportunities. They can identify competitors with their software. So it’d be a good idea to meet with the ASBDTC for some education and training. All of this training, feedback, and consultation is free. There is no cost for their services. Also, they can give you feedback on a product or business idea. They also have the know-how to advise you on the financial aspects of a business. Today, the purpose of this course is to help you to put together a draft business plan. The ASBDTC will help you in putting together this business plan. A business plan is an important element of a business and will help you manage your business. This advice will provide you with the tools you need to write a business plan which we will discuss. You have to understand how to use these tools to create your business plan. You and your consultant can discuss your draft business plan and suggest how to improve it if need be. They can encourage you and give you other ideas and research to help your business plan You can’t just present an idea for a business, you have to create a business plan to make it clear that you put time and effort into your idea. This will prove to an important stakeholder, like a lender, that you are ambitious about your business. Why write a business plan? Why not just go ahead and do it? You should write a business plan because it makes sure you are organized. For example, a business plan will help you know how to succeed. A business plan makes you consider all the aspects of your business, even the negative ones. This means there will elements you enjoy, and elements you find frustrating and confusing. A business plan makes sure you are expecting the pros and the cons so you can think about how to adjust. Your business plan can help you evaluate and identify what may be wrong so that you can fix it. Your business plan is like a resume that helps you market your business ideas to others. This means everything must be included in your business plan. This plan helps you clarify and adjust your thinking by putting it in writing. Now your idea and business plan must be to the point. Your plan should include what your company plans to achieve. You have to start with a plan. Think about why a business plan is important and how your plan will help you succeed. The business plan is a very time consuming process, but it is very worthwhile for your business. Remember the principle of quality over quantity. Your time is valuable. If you don’t spend enough time making your plan, you will sacrifice quality. So it’s very important to spend enough time making your business plan. You have to think about how to make your own cover page for your business. It should include the owner’s name and business name, company logo, phone numbers, mailing address, email, and website. Don’t overdo your cover page with too many colors. Keep it simple, like the picture shown. A busy looking cover pages with lots of colors won’t be more attractive. It’s best to be simple. This cover page is used to present your business plan. There are five points to your business plan that are involved in the business goals we just discussed. The ideas involved in your business plan come from the five points. We will discuss these five points today and what each one means. These five points will help your business succeed. It will be really helpful to meet and talk with a team before showing your business plan to a lender. Now we’ll look at the first of the five points. The first point is products and services. Will your products and services be demanded? Will customers want to buy your products or hire you? How will you advertise your business? Online? Will you set up a storefront with a sign? At home? You have to think about where you will set up your business. That’s the first point. You also have to think about pricing. If someone is selling the same product, maybe you need to lower your price. Is it worth it? Or should you match their price? Or maybe you should raise your price if your product is of better quality than your competitor. You have to think about comparing your business to your competitors. It depends on your comparative business skills. Also, the success of your business depends on your location. Like for example, maybe you want to set up a business in a small town. Maybe, for example, you want to start a business that works with high school dancers. But there is only one high school in the area. Just one! Will the business really succeed? No. So you have to think about the need in an area. Also, ask yourself, will my products beat other competitors? What distinguishes my business from my competitors? That’s something to think about. You also have to think about area. For example, it may be better to establish a business in a more affluent area. It may not be a good idea to set up a business in a poorer area. Or think about an area where many young people live if your business is geared towards that group. Or, an area where older people live may be a better market. So think about what fits your business. Now the second point, market. You have to think about what your business’ target market is. Who are they and how much are they willing to pay? You have to know who makes up your target market. That’s one topic you have to research. A second topic is your business’ competitors. Think about how you can position yourself to compete with them. For comparison, Lowe’s and Home Depot. They sell the same things like lumber. So who’s better? It depends. You need to think about comparing yourself to your competitors. Also, think about where you want to establish your business. Location can determine your business’ failure or its success. Now, how can you know that customers will buy your product? What proof can you provide? For example, listing potential customers who agree to buy from you can indicate your business’ future success. And the last topic, marketing and sales strategy. Using market research that the SBDTC can assist with can help you to understand the market. This will help lenders see that you understand the marketplace and likely support you with a loan. Like I just explained, you have to understand your customer and their buying preferences. You can’t rely on how you think it is best to market your business. You have to understand your customer. That’s why demographic information is really important. It includes data like age range and population distribution, relationships, children, and average income. This information can tell you where it would be best to establish your business. That last point mentions that you can also consider the geographic location to describe the target customer. How far will a person realistically drive to reach your business? It might be better to establish your business somewhere else. Or, would it be economical to ship products very far? Try and think about that. Your goal is to ensure that your target market will be attracted to your business. Now, once you define your target customer, consider who your competition is. For example, Lowe’s and Home Depot are competitors. Always research your top competitors and try to estimate their market share. You may even be able to attract some of their customer overflow. You also have to think about where your competitors are located and if they could take away your business. Analyze your competitors’ major strengths and weaknesses. For example, a competitor may have many customers coming to their business but not provide delivery. That could be a space in the market for you to fill. Also, you may also be able to find a niche opportunity. For example, while Walmart sells many products including bicycles, you may want to sell only bicycles. Customers may prefer your more diverse selection.So that’s something to think about. Thinking about these things will help your business be successful. Moving on to location decision. Location is one of the most important business decisions. You may not have to have a physical facility for your business; you can work at home. Think about the visibility of your business location; can customers see your business easily, or is it hidden? Some businesses may not have to be easily visible but can advertise instead on signs or the internet. Or you may wish to establish your business in a high-visibility area. It’s best to work with a professional real estate broker if you’re looking to lease commercial real estate. Brokers can help you identify what areas are best for your business. Get your questions answered by them. Before signing a leasing agreement, check with a knowledgeable professional. If you have any questions, ask them before you agree. That will help you make the best decision. Notice there are four Ps. Marketing and sales involves four things: product, price, place, and promotion. Part of a marketing and sales strategy must include educating potential customers about your business. This will help generate interest from the target customer and is part of marketing. Now the third point:Industry. Learning about the industry you intend to start a business in will be helpful. Where are competitors located? How do they advertise? Learn about other businesses. This helps you understand the finance and regulation issues that impact the industry and how it operates. For example, is seasonality a factor, like during Christmas, Valentine’s Day, and Mother’s Day? Also, learn the rules and regulations of your specific industry. Also, consider if business can be conducted mostly over the internet. Doing research to understand the industry’s rules will help you integrate your business into the industry. Now the fourth point, business operations. You have to assess both others’ and your strengths and weaknesses. That will help you know how your business can succeed. However, when you start a business, not every decision you make will be perfect. Sometimes, you will make mistakes, yes. But that’s learning the hard way. You have to endure challenges so you can improve Or, you can ask for feedback from those with experience to help you fix your mistakes. You can’t give up if you make mistakes; pushing forward is the only way to improve. This means that working with professionals like lawyers, CPAs, and insurance agents will be helpful. If you decide to hire workers, the success of your business can depend on your employees. For example, giving commissions to sales workers can encourage them to be motivated. If you don’t offer a commission, they may lose motivation and your sales will plateau. So those are some ideas to help your business. Now also, hiring and training a good manager is important. You have to think about whether you will hire someone or manage yourself. Organization means delegating tasks to employees who will specialize in a specific type of work. Mixing responsibilities is not efficient. If each employee has something to specialize in, a manager will know who best to delegate a task to. That’s how a successful business is run – in an organized fashion. The fifth point is budget. Many business ideas require start up money. Maybe you’ve already started a business but you need to expand; a good budget will help you achieve that goal. Most businesses get start up money through personal savings, borrowing from family, friends, or a lender. You have to determine exactly how much money you need by making a budget. Making the right estimate will ensure your business can keep running. A budget should also account for paying employees a sal ary, including yourself. Your budget should account for three to six months of costs so that you don’t run through your funds. When your business starts to make money from paying customers, that income can keep business running Your budget should also take into account costs like equipment and inventory, so that when someone wants to purchase an item, you can quickly sell it to them. You may also need to put down a deposit for rent or a business vehicle, so those are other costs to consider. You should also calculate how much it will cost in utilities and rent to run your business for six months. Think about internet too and all the other costs for a six month period. Once your business starts making a profit, that money can cover those costs. Remember we just talked about income, that’s called cash flow. A strong cash flow means that your business is doing well and will help it improve. Cashflow is the lifeblood of a business and helps it run. You have to be responsible to help up with your cash flow. You may choose to hire a bookkeeper to keep track of monthly cash flow that you can evaluate and check on. Or you can do it yourself to keep up with your business’ performance; either way you must have good records. Having emergency savings is also very important. In case something happens, you can still pay the bills. It’s also important to keep track of who you owe so that you can repay your debts instead of getting behind. The ASBDTC can help you with many things related to finances. They can give you tips and tools to use. They can advise you on risks and give you feedback. They also have classes on small businesses that can give you some ideas. They have software and tools that can help with keeping financial records and they can support you. Really, anytime you need help or feedback the ASBDTC can help you. You can also use the internet to do research on different topics to help your business succeed. When you borrow money from a bank, the bank has to know how you will pay back the loan. Banks also look for substantial available collateral and your equity in case your business venture fails. Collateral means property you have that is of value, like equipment worth 50,00 dollars. Maybe you need 30,000 dollars; A bank will lend an amount that you hold in collateral in case you default. The bank will ask you about all these things because 95% of small business start ups fail. Lenders clearly have good reason to be concerned about your collateral. Banks also want to know and see proof of your management ability. Can you manage a business well? Also, will your business work in the area you are looking to open in? That’s something to think about. Also, a good credit score will help you get a loan. These are the type of documents and informations about you that banks like to see. Banks will want to see 3 years of tax returns. You should provide a list of all property you would consider collateral in case you have financial problems. You should also include price quotes and estimates in your financial statement. Also banks will want to see your tax returns and proof that you have filed taxes in your financial statement. Now that we have finished explaining how to write a business plan, the next step is to do it! But remember it takes time. DOn’t hesitate to contact your local SBDC for help. They’re happy to help you. Do the best you can to work up a draft of your plan and then you can meet with your local SBDC for help. Contact information is located at… You can call on a videophone, email, or go on the website. Thanks for your attention!