FIRST SESSION (approximately 120 Minutes)
I. SELF ANALYSIS (30 minutes)
How do you grade yourself on the five basics necessary for a Happy Life?
- Spiritual – Philosophical grounding.
- Home, including family and physical surroundings.
- Social life, including work associates.
- Financial stability.
- Health, both physical and mental.
Why do you want to do this?
What are your strengths?
What are your weaknesses?
II. FUNDAMENTALS (90 minutes)
Is there a need?
If so, why has an existing competitor not filled it?
- Location of products and services (area to be served – MSA)
- Labor availability
- Education and training of labor force
- Labor costs in MSA
- Availability and prices of products sold
- Prices for like products and services in MSA
- Per capita income in MSA
- Availability of physical facilities and costs
- Professional Advisers (accountant, banker, attorney)
Finding a niche
- Why you and not existing competitors?
III. Functional structure of all businesses.
Who does what, with which, and to whom?
Prepare an Organizational Chart.
IV. Developing a business plan. Excel worksheet is excellent.
What type of business (Corporation, Proprietorship, etc.) is best for you?
Amount needed and for what
- Startup costs; e.g. advertising, legal fees, insurance, licenses, etc.
- Initial operating capital: how much, how long before business can support, etc.?
- Investments, life insurance cash value, etc.
- Investors (borrowing or working investors?)
- Credit Lines (Banks)
- Borrowing (Banks, individuals)
- Based on demonstrable figures; e.g. per unit sales, per day sales, gross profit per unit, etc.
Projected Costs and Expenses
- Costs v Expenses
Fixed expenses v Variable expenses
V. Type of Business Structure
a. Comparisons of Corporations, Proprietorships, Partnerships, LLCs, Joint Ventures, interim and temporary investors, etc.
b. Ownership percentage rights, profit sharing, buyout options, etc.
VI. Final Considerations
Family support, especially spouse
- When to call it quits?
- How do you end it?
- Develop a Vision Statement
SECOND SESSION (approximately 120 minutes)
VII. Recap before beginning
Everything should be based on the business model reflected in your business plan.
Banks and Investors will need to see the business plan.
Is your capital secure and in place? Make sure it is enough; you can’t have too much.
Functional Business Structure:
Do you know who will do what, with which, and to whom?
Do your investors and future employees know?
Facilities and equipment:
Is everything ready and will it be in place by opening day?
Have you already begun advertising and other marketing? If not, when? What is your budget? Whatever it is, you will probably need more than anticipated.
Double check revenue projections. Know the minimum required, and be prepared to live on less than that.
Double check costs and expenses. Know the maximums and be prepared to live with more than anticipated.
Double and triple check everything against your business plan. Make sure you have a PLAN B, and possibly PLANS C and D. One thing you can always count on: the unexpected will happen; Murphy’s Law is always in place – “If something can go wrong, it will.”
VIII. Time to Start!
The key is planning.
Your employees, if any, are in place and presumably trained.
Your facilities are adequate.
Your capital is in place,
Each person is identified on your organizational chart.
You have operational and financial goals.
Each person on the team is thoroughly familiar with your Vision Statement.
ALWAYS operate on an ethical and moral basis, with everyone in your life. This may or may not be stated publicly to employees, but people will know. All employees will unconsciously follow your lead, your mannerisms, and your examples; whether or not that’s what you intend. Presumably, you have started your business for the long haul, not to simply gain as much money as possible and move to something else.
You know what you must accomplish according to your business plan; set about immediately acting toward those accomplishments. Call on new customers, use your advertising plan effectively, check yourself daily or at least weekly against your plan.
Cash Flow is everything. Presumably, you have already made arrangements concerning billing and collection. Depending upon your industry and capital structure, try not to build accounts receivable. Know your niche; operate within it and build your business from there. Don’t try to conquer the world the first few months; build your reputation for quality, stability, professionalism, etc. As Confucius said “The journey of 1,000 miles begins with the first step.”
Open a separate bank account for your business; do not mix revenues and expenses from business activities with other revenues and expenses. Keeping excellent records is a MUST. Don’t neglect the administrative functions leg of the three-legged stool. If you need to inject cash into the business, use an appropriate journal entry; likewise, have your withdrawals from the business properly accounted for.
Operate from Day One with the mindset that you have 1,000 employees; you may have someday. The basic principals are the same for all businesses; operate that way from the beginning.
Well, you are off and running. Hopefully if will be a rewarding future. If you have planned well, operate your business well, and continue to do so; you will be well on the way toward the American Dream!