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Mapping your path with a business plan

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The U.S. Small Business Administration (SBA) and its partners help millions of existing and prospective small businesses start, grow and succeed. They help with SBA loans, counseling, training and contracts. SBA also helps businesses and families recover from disasters with loans, and is a voice for small business, helping reduce regulatory impact. Each month, this section provides information to start, expand, and manage small business.

A business plan defines your business, identifies your goals and serves as your firm’s resume.

It helps allocate resources properly, handles unforeseen complications and helps the owner make good business decisions. A good business plan is a crucial part of any loan application because it provides specific and organized information about your company and how you will repay borrowed money.

One of the greatest benefits is that putting a plan together forces you to map out exactly how you expect to make your business idea successful. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.

There are four core questions to answer before you write your business plan. What service or product does your business provide and what needs does it fill? Who are the potential customers and why will they purchase from you? How will you reach your potential customers? Where will you get the financial resources to start your business?

Although there is no single formula for developing a business plan, some elements are common to all plans. Your plan should start with a cover sheet, a statement of your business purpose and a table of contents.

Then start with a section about your business idea: describe your business, tell how you plan to market it, review your competition, describe the operating procedures you plan to adhere to, discuss your plans for employees and how you plan to hire and train them, and describe your approach to insuring the business.

Next, provide detailed financial data, a list of the equipment and supplies you will need and how much they will cost, a balance sheet showing your assets and liabilities, an analysis of what it will take for you to break even and a projection of your business’ income, including anticipated profits and losses.

Your financial data should be organized in a three-year summary, with detailed projections of cash flow, costs, and income organized month-by-month for the first year and quarter-by-quarter for the second and third years. Be sure to include a discussion of the assumptions on which your projections are based.

You should have an executive summary in which you summarize the plan, and be prepared to attach supporting documents and financial projections. The supporting documents should include resumes and tax returns of the principal owners for the previous three years, a copy of a franchise agreement if your business is a franchise, copies of proposed leases or purchase agreements for business space, copies of licenses and other legal documents, and copies of letters of intent from suppliers and known customers.

You can find a detailed guide to producing a solid business plan on the SBA Web site at www.sba.gov. Visit www.sba.gov/ca/sandiego for information pertaining to San Diego and Imperial counties.

Small Business Success

In 1997 Matt Meis, a 30-year veteran in the jewelry industry, was laid off from his job with a local diamond importer and decided it was time to start his own business, Matt Meis Goldsmith. Meis had worked various jobs in the jewelry industry for many years. He created and sold jewelry privately to family and friends on the side, leading to more referrals.

Eventually, he created a niche market for fine jewelry customers looking for an alternative to the traditional retail store-buying experience. Meis’ clients nicknamed him the “wandering jeweler” since he goes to his clients rather than having them come to him.

In the spring of 1998, Meis sought assistance from the North County Small Business Development Center (NCSBDC) to create a business plan for his new venture. In October 2003, Meis once again contacted the NCSBDC for assistance with expanding his client base and sales.

The NCSBDC worked with Meis to develop a revised marketing plan, in which he incorporated direct marketing strategies and promotional ideas. The NCSBDC also counseled Meis on creating opportunities for publicity, utilizing local television media. As the end of 2005 approaches, Meis is on track to report an approximate sales increase of 40 percent over the two-year period since 2003. Earlier this year, Meis incorporated his eight-year-old business, naming it Wandering Jeweler Inc.

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