Writing A
Business Plan:
Start Up
Business Plans --
Never, Never Be A "Start Up"!
Start up business plans present challenges
that others do not. Conquering those challenges is what makes you real
entrepreneur material.
THE "NEW" ISSUE IN A START UP BUSINESS PLAN
Lenders and investors can be real stuffy.
For the most part, they don't like "new". "Innovative" is ok.
"Creative" is so-so. But "new" is a "No." There are a number of
reasons for this, the most important one being that the idea hasn't been
tried. Do you remember the "pet rock" phenomenon? The
entrepreneur made a million dollars on it, but he never got bank financing
because the idea was too new, too innovative.
Imagine for a moment all the money and clout
it takes to introduce a "new" style in women's fashion. One fashion
house alone just can't do it, no matter how many millions it has behind it.
It takes many designers, and costs many millions of dollars, to convince the
public to try something new. That is how mini skirts and hip boots and
Afros came into style.
So let your business "grow".
No matter how new it really is, it is still growing, evolving, becoming
something more. It has some kind of success behind it. Use that
success to your advantage in your start up business plan.
TAGGING ALONG IN START UP BUSINESS PLANS
It is, of course, possible that your business
is New. It may be a new style of cuisine, or a new type of business
services that hasn't been tried before. Should you discover yourself
in a "New" position, try to latch onto something Tried and True.
That "new cuisine"? It is an ethnic
cuisine based on a very popular travel destination.
That "new business service"? It is a
business service with comprehensive services for a modern environment.
The goal is to tag your "new" business onto
something that is established and successful. That is the straightest
path to success in a start up business plan.
MAKING YOUR START UP BUSINESS PLAN EXPANSIVE
"Growing" and "expanding" are great concepts
in start up business plans.
It doesn't matter if you are growing from a
part time online business to a full time brick and mortar business.
You are growing. You are expanding. You are evolving. You
are taking success that is already there and making it better.
And that is good.
YOU GOTTA KNOW THE TERRITORY
With existing businesses, the
owner has already proved her mettle. Everyone can see The Success, and
respect it.
Not so with A start up business
plan. It is not always easy to see the success of the owner(s) behind
the business in a startup. Proving that this person (or this team) has already
generated business success is absolutely essential. The more success,
the better. And the closer the previous success is to the business at
hand, the better.
OPTIONS FOR FUNDING STARTUP BUSINESS PLANS
The
SBA is
surprisingly receptive to startup business plans, perhaps because they
typically require two to three backup equity positions anyway. (That
means that will want you to guarantee your loan with your house, your
stocks, your first born child and anything else of value that you may have.)
Angel investors are the other really great source of start up business
plan financing. Angel investors are those magical creatures who
believe in new ideas. Often they will have experience in your line of
business and be able to provide great contacts for you as well.
Bootstrapping
is a technique not to be overlooked. It is a seriously under-valued
means of funding new businesses. Basically it means that you look to
yourself and your talents to push the business as far as you can before
approaching an outside funding source.
For sophisticated entrepreneurs, don't
overlook an
IPO,
especially one offered in England. There are strong advantages to a
London Stock Market IPO.
Venture lending might also be an option. Explore
alternative financing as well as standard financing, and develop a mix
that works for you.
WRITING START UP BUSINESS PLANS
Start up business plans for each of these
entities is a bit different.
The Wine Bar would likely be
funded by an angel investor, or by the SBA, depending on security available.
If the Medical Billing Service is a smaller business, it would benefit from
bootstrapping or microloans. The Internet Cafe could be SBA funded.
If you have the security to
pledge, go first to the SBA. The rates will be lower. If that
doesn't work, expand your horizons to other potential investors/lenders.
Focus on what your lender/investor will
gain from the loan. The SBA just wants to get paid back. An
angel investor may be looking for something quite different. Figure
out what it is that they want, then target the business plan accordingly.
Return to top
of Start Up Business Plans
