A business plan for a small startup has two strikes
against it: it is small, and it is a startup. But you already know
that. You've probably been looking for funding for awhile, and just
can't latch onto it. Let's see what we can do about that.
KEY CONSIDERATION
Let's start at the beginning. Why are
you starting this business? Do you want a small business, or are you
just starting small? There's a big difference. If you want a
small business, that's fine. If you are planning on a big business
down the road a bit, well, that's a different issue. The mind set is
really different for the two scenarios.
For the purposes of this discussion, I'm
going to assume that you really want a small business, just like the
millions of small businesses that already exist successfully. If you
truly want a mid-size or big business, check out some our other business
plans for specific businesses.
STRONGEST ADVANTAGE TO A
SMALL BUSINESS
You call the shots. You decide what
the business will be, and how it will be operated.
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| Your
7-Step Business Plan Template is designed specifically for
small businesses. It is even created in MS Word and Excel, just
to make it easier for you to use. For more information, click on
the book covers. |
STRONGEST DISADVANTAGE
As you've probably discovered, raising
financing can be a real challenge.
Succession Issue. As a small
company, ensuring succession in the event you are incapacitated is a touchy
issue. But it is a real issue. So how does the bank get paid
back if something happens to you? If you've got an answer to that, put
it in your business plan. Don't wait for the lender to ask because he
won't. He will simply assume that there is no way he will get paid
back.
Skills Issue. As a small
company, each person needs to possess a lot of skills. You don't have
a Human Resources Department. Or a Strategic Development
Division. Or an Advertising and Public Relations Department.
You're IT. This makes it tough in raising financing because all the
bases still need to be covered, even if they are all covered by one
person. Prior successes are very important here.
Need for Financing Issue. If
the business is small, why do you need financing in the first place?
It's a legitimate question. Your business plan for your small startup
needs to specify just how the funding will be used, and why it is needed.
OVERCOMING THE DISADVANTAGES WITH
YOUR BUSINESS PLAN FOR SMALL STARTUP
Don't Ask for More Money Than You Need
"A million dollars" is a nice
round number. But few businesses really need that. Demonstrate
your financial expertise with well thought out projections and Use of Funds
Statement. It doesn't need to figure down to the penny, but be sure
that there's not a lot of fluff in it.
Use Your Business Plan for Small Startup
to Demonstrate Your Business Skills
Your business plan will need to answer a
lot of questions, such as:
- Where is your marketing skill?
- How did you get industry skill?
- How will you "fill in" those
spots where you are missing experience?
- How secure is the loan/investment?
- How will you get clients?
- Who handles the business if you get
sick?
- How much equipment will you need?
What is the value of that equipment?
- What makes you think you can succeed?
... and on and on. Basically,
your business plan needs to be every bit as professional as one for a larger
company.
But, depending on the amount of money you
are looking for, it may not need to be as formal.
FOR ADDITIONAL INFORMATION
FOR YOUR BUSINESS PLAN FOR A SMALL STARTUP AND YOUR MARKETING PLAN FOR YOUR
SMALL START UP BUSINESS
There are two types of statistical
information that you will need for your business plan for a small startup,
and for your marketing plan for your start up business: one set detailing the growth of
your particular industry, and one set detailing the client base in your
area. Both can come from one source.
For statistical information thousands
of different industries, go to BizMiner.
At the home page, look for the "Keyword
Search" box.
In the blank box, enter the term for your industry.
The list that is generated includes
reports for both Financial Analysis and
Marketing Research for your industry. Both reports are
invaluable. Study them prior to submitting any request for
funding.
It is important for you to have this
information because this is the information that your
lender will review to determine if your business is in the acceptable
range of financing, income, etc.
For demographic information for your
area, be
sure to check in the left hand navigation bar of BizMiner for "VIEW ALL
REPORTS", then "AREA
DEMOGRAPHICS". This will likely provide the statistics you
need to prove that your market is there.
OTHER SOURCES OF
INFORMATION
Your business plan for small startup
businesses will be aided immensely by including information from
industry organizations and/or government sources. One of the best
sources for this type of information is BEOnline
, compiled by the US Library of Congress.
YOUR ONLINE
PRESENCE
Few business can start today
without a web presence. Make yours short, sweet and effective.
Let prospective clients find out everything that you want them to know
about you and your business. The most powerful client-generating
system we know is the one at my
website host. And if you need help setting up your website, do
contact the SBI Coach.
YOUR LIKELY
LENDER/INVESTOR
The SBA
is a strong lender in the small business arena.
Also, if you are
purchasing much equipment, seriously consider leasing this equipment
rather than buying it.
Don't overlook alternative
financing. Sometimes looking in unlikely places will bring good
results.
ONE STEP
FURTHER IN YOUR BUSINESS PLAN FOR SMALL STARTUP
Do check out The Business
Plan for Small Businesses:
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Over 100 pages, stuffed
full of everything you need to know to create an outstanding
business plan for your small business. Because your
company is worth it. Best of all, the 7-Step Business Plan template
is based on MS Word and Excel, two programs you already know!
Click
on the book cover for more information.
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