Posts filed under ‘13 Step Business Plan’

Download the 13-Step Business Plan for Wedding Professionals

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I believe that the success of your business has a direct impact on the success of the wedding industry.  I believe that smarter wedding businesses leads to a big strong league of professionals. I also believe that I’ve been fortunate enough to learn from some pretty amazing people.  And, I hope I can share some of this with you.  More on what I believe tomorrow.

For now… I invite you to download the 13-Step Business Plan…

My 13-Step Business Plan was in large part an adaptation of what is available on the SCORE website*.  I tweaked a lot of the information to make it applicable to your wedding business.  If you’ve found it useful and want to download it in an easy readable form, you can do so here.  (It’s free!)  The only thing I ask is for some feedback.

1 – Fill out this 3 question survey:  SWP Survey

2 – Download this: Sage Wedding Pros – 13 step business plan

*SCORE is a division of the Small Business Adminstration and serves America as small business counselors.  Their tools are free and easy to use.

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June 3, 2009 at 6:00 am 4 comments

The Evolution of Your Business Plan!

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If you’ve been following along for the last few weeks, we uncovered the 13-Step Business Plan… and what fun it was!  You may have only been reading along… or maybe even writing along… whatever the case, the business plan is a constantly evolving organism.  Your business plan should live and breathe, much like a living thing.  These are my recommendations for making sure you are breathing life into your plan on a constant basis:

  • Set a monthly or twice monthly date to spend a few hours on your business plan.  Rewrite and revise the plan as your business changes.
  • Find a planning partner and meet up for coffee to work on your plans routinely.
  • Do this little by little.  Take one piece and work on a piece each week.
  • Take “perfection” out of your vocabulary.  Strive for excellence in your plan, not perfection.  Perfection is unattainable and it will cause you to procrastinate.
  • Have someone else read your plan.  Do they understand your business?  What recommendations do they have?
  • Read this post from Sean Low.  In it, he discusses the practice of journaling about your business daily.  “The journal will keep you in touch with what is confronting you and your business today” Sean says.  It’s a great way to work on your business strategy between planning sessions.

Come back tomorrow…
I’ll have all 13 steps on an easy-to-download pdf.


June 2, 2009 at 6:10 am Leave a comment

Writing Your Business Plan, Step 13: Refining the Plan

Your business plan is most likely going to need a little fine-tuning to make it better reflect your business.  The 12 steps we’ve discussed are fairly general for most small businesses.  Here are a few things you’ll want to elaborate upon, depending on your situation.

Remember the Executive Summary?

Do you remember when we started this?  We first worked on the Executive Summary.  In Step 1, we wrote a draft for this.  Now, we are going to go back and refine it.  Go back, read the post, and write the Who, What, Where, Why, and When of your business.

Seeking financing from a Bank

These days it is challenging but not impossible to get bank financing for your business.  Banks are most nervous about getting paid back on the loans they extend.  You’ll want to make sure you provide them with enough information.  SCORE recommends providing the following:

  • Amount of loan you are requesting.
  • How you will use the funds.
  • What will this accomplish (how will it make the business stronger)?
  • Requested repayment terms (number of years to repay). You will probably not have much negotiating room on interest rate, but you may be able to negotiate a longer repayment term, which will help cash flow.
  • Collateral offered, and a list of all existing liens against the collateral.

Seeking financing from Investors

Investors are going to want to see what your business’s short-term and long-term growth is expected to be.  They want to know that they are going to be rewarded for their investment.  SCORE recommends including the following with your plan:

  • Funds needed short term
  • Funds needed in two to five years
  • How the company will use the funds, and what this will accomplish for growth
  • Estimated return on investment
  • Exit strategy for investors (buyback, sale, or IPO)
  • Percentage of ownership that you will give up to investors
  • Milestones or conditions that you will accept
  • Financial reporting that you will provide
  • Involvement of investors on the board or in management

Information to provide depending on the Type of Business

You’ll also want to provide different information, depending on the type of your business.  Here are a few different types of wedding industry businesses (not all inclusive) and details you may want to include.

Manufacturing Businesses: Wedding Invitations, Wedding Gowns, etc.

If you manufacture and carry inventory you’ll want to include details about your production.  SCORE recommends including:

  • Present production levels
  • Present levels of direct production costs and indirect (overhead) costs
  • Gross profit margin, overall and for each product line
  • Possible production efficiency increases
  • Production-capacity limits of existing physical plant
  • Production capacity of expanded plant (if expansion is planned)
  • Production-capacity limits of existing equipment
  • Production capacity of new equipment (if new equipment is planned)
  • Prices per product line
  • Purchasing and inventory management procedures
  • Anticipated modifications or improvements to existing products
  • New products under development or anticipated

Services Business: Wedding Planners, Officiants, etc.

If you have a service business, you are selling yourself as a product.  You may have little if any inventory or assets.  SCORE recommends including the following:

  • Prices
  • Methods used to set prices
  • System of production management
  • Quality control procedures
  • Standard or accepted industry quality standards
  • How do you measure labor productivity?
  • What percentage of total available hours do you bill to customers?
  • Breakeven billable hours
  • Percentage of work subcontracted to other firms
  • Profit on subcontracting?
  • Credit, payment, and collections policies and procedures
  • Strategy for attracting new clients

Retail Business: Dress Shop, Shoe Store, etc.

If you have a retail business, you’ll want to provide details on your store policies and your inventory.  SCORE recommends including the following:

  • Company image
  • Pricing: Explain mark-up policies. Prices should be profitable, competitive, and in accord with the company image.
  • Inventory:
    • Selection and price should be consistent with company image.
    • Calculate your annual inventory turnover rate. Compare this to the industry average for your type of store.
  • Customer service policies: These should be competitive and in accord with the company image.
  • Location: Does it give the exposure you need? Is it convenient for customers? Is it consistent with company image?
  • Promotion: What methods do you use and what do they cost? Do they project a consistent company image?
  • Credit: Do you extend credit to customers? If yes, do you really need to, and do you factor the cost into prices?

Hybrid Businesses: Photographers, DJs, etc.

You may have a combination of these businesses.  Photographers provide a service, but they sometimes carry inventory of albums and photo processing goods.  DJs also provide a service, but have a lot of equipment and fixed assets.  Make sure to tweak the “extra details” of your business to provide as much information as you can.

Congratulations!

You’ve made it through the 13 steps of writing your business plan!  Maybe you’ve just been reading along… and maybe you’ve been writing along… whichever one it is, it is a start and you should be proud.  Tomorrow, we’ll talk about how the business plan is constantly evolving.

June 1, 2009 at 6:00 am Leave a comment

Writing Your Business Plan, Step 12: Appendices

Today, we are working on the final piece of your business plan: The Appendices.  Here is where you can give your Plan a little more oomph.

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You may want to include more information about your business.  This is particularly important if you are seeking financing from a bank or investors.  These are usually additional information which link to the rest of your business plan.  Here are some details that SCORE recommends you include:

  • Brochures and advertising materials
  • Industry studies
  • Blueprints and plans
  • Maps and photos of location
  • Magazine or other articles
  • Detailed lists of equipment owned or to be purchased
  • Copies of leases and contracts
  • Letters of support from future customers
  • Any other materials needed to support the assumptions in this plan
  • Market research studies

Next Step

VOILA! We made it!  On Monday, we’ll be wrapping things up with a discussion of fine-tuning our business plan.  Come back tomorrow for a fabulous industry insider!

May 28, 2009 at 6:00 am Leave a comment

Writing Your Business Plan, Step 11: Financial Plan (Future)

Today we are writing the last part of the Financial Plan: The Projection.  A projection, or forecast, is written as a goal-setting tool for the financial future of your business.  It serves as an estimate of your company’s ability to be profitable.  It is great information for potential financiers of your business, and a great exercise for you to plan your financial road map.  If you don’t have a map, how do you know where you are going?

The following 5 templates are taken from SCORE, SBA small business counselors, and are spreadsheets that will constitute your financial plan:

12-Month Profit and Loss Projection

This projection shows your expected income and expenses by month for the next year.  You may find it helpful to use the sales forecast that you created in Step 6 during your marketing plan.  You’ll want to make sure to explain any assumptions or exceptions in your projection.  For example, the wedding industry generally has seasonality in its revenue stream.  You’ll want to explain those variations in your projection.  This is the template from SCORE: 12 Month Profit and Loss Projection.

Three-Year Profit Projection (Optional)

If you are seeking bank financing or outside investment, you’ll want to provide a three-year profit projection.  This will be important to your financiers in determining the long-term viability of your business.  This is the template from SCORE: Three-Year Profit Projection.

Projected Cash Flow

The Cash Flow Projection is probably the most helpful tool for small businesses.  The number one reason most businesses fail is poor cash management.  With the seasonality of the wedding industry, having a good handle on the ins and outs of your cash stream is very important.  You’ll want to use the profit and loss statement to determine where you expect your cash to come from (sales, loans), and where you expect it to go (expenses, debt repayment).  Here is the Cash Flow Projection from SCORE.

SCORE recommends explaining your major assumptions, including:

  • If you make a sale in month 1, when do you actually collect the cash?
  • When you buy inventory or materials, do you pay in advance, upon delivery, or much later?
  • How will this affect cash flow?
  • Are some expenses payable in advance?
  • Are there irregular expenses, equipment purchase, or inventory buildup that should be budgeted?

Projected Balance Sheet

Your Projected Balance Sheet will show your assets, liabilities, and owner’s equity as expected for the 12 months you’ve covered in your 12-month profit projections.  You’ll want to take a look at your current Balance Sheet (remember we did this in Step 10) and use your profit projections to determine what your balance sheet will look like in a year.  This is the Projected Balance Sheet from SCORE.

Breakeven Analysis

The Breakeven Analysis enables you to determine what you have to earn in income to recover the costs of doing business.  This is a powerful tool for all businesses, but more so for new businesses.  Here is the SCORE template for Breakeven Analysis.

Next Step

Tomorrow we’ll be discussing the appendices and addendums to your business plan.  These are the items that go at the end of your plan to give it just a little more meat.

May 27, 2009 at 6:00 am Leave a comment

Writing Your Business Plan, Step 10: Financial Plan (History)

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We are in the final section of the Business Plan, the Financial Plan. You’ll recall that we have broken down the financial plan into 3 parts:

  • Preparation (what to prepare before writing the financial plan)
  • History (looking back on the finances of your business)
  • Future (looking forward on the finances of your business)

Last Thursday in preparation for today, I had you prepare the following information:

  • Assets – what do you own in your business? (computers, inventory, etc.)
  • Liabilities (AKA Debts) – what do you owe in your business?
  • Equity – how much have you invested (or has someone else invested) in your business?
  • Revenues – how much did you make in sales in 2008? (this can typically come from your tax return)
  • Expenses – how much did you spend in 2008? (also should be traceable to your tax return)
  • Cash – where is that cash register? (not the physical register, but that paper thingie that tracks which checks you’ve written)

We are going to take these numbers and create the financial history of your business: your financial statements. Because I don’t expect you to be an expert accountant, I encourage you to ask questions (post a comment below) or talk to your accountant to put some of these details together. If you use a program like Quickbooks, you’ll be able to pull some of these reports from that.

The “History” of your business

You’ll want to include the balance sheet and income statement for your business going back 3 years. (If you’ve been in business less than 3 years, then provide what you can.) I’ll provide a little Accounting 101 on some of these financial statements.

Balance Sheet

The Balance Sheet is a snapshot of your business at any given moment. It shows what you own (assets) and what you owe (debts or liabilities). The balance sheet basically looks like this: Assets = Liabilities + Owner’s Equity

In plain English:

What you own = What you Owe + What you have invested in your business

Here is an EXCELLENT template in Excel for your Balance Sheet, courtesy of SCORE.

Income Statement

The Income Statement (also called the Profit & Loss, or P&L) gives the history of your business performance in a period of time. Typically you’ll create this for the most recent year. It typically looks like this: Revenue – Expense = Net Income or Net Loss

In plain English:

Sales – Expenses = Profit or Loss

Here is a RAD template in Excel, direct from the Microsoft website.

Personal Financial Statements

If you are applying for a loan with a bank or seeking investors, you should also include your personal financial statements. Bankers may want you to personally guarantee you commitments, depending on the size of the loan. For example, if you own a portion of your home, this may become collateral for your business loan.

You’ll want to list out your personal assets and your personal debts:

Assets

  • Home or Property you own
  • Automobiles that you own (that are paid off)
  • Any investments that you’ve made

Debts

  • Loans – personal (mortgage, auto, student, etc)
  • Credit Cards

I recommend including all of the details of your debts including to whom the loan is payable, the original amount, the outstanding amount, the interest rate, and the monthly payment.

Here is an AWESOME template, also from SCORE, for personal financial statements.

Bonus Stuff

If you are applying for a loan or seeking investors, you should have some additional financial information prepared. Financial ratios allow comparisons between some of your numbers. (Here is where we go really nuts with the math and the Excel – but WOW – it is powerful information.) For example, showing what your cost of sales is in relation to your sales gives your investor an understanding of your profit margins.  Here is a GREAT template, also from SCORE, that helps you put together some of these ratios.  If you are not seeking outside financing you may decide to opt out of this information.

Next step

Tomorrow, we’ll be wrapping up the Financial Plan and digging into the financial future of your business.  So, start thinking of what the future of your business will be!

May 26, 2009 at 6:00 am 1 comment

Writing Your Business Plan, Step 9: Financial Plan (Preparation)

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Did you fire up your calculator?  We are going to work through the financial plan.  This is the final segment of your business plan.  HURRAH!  It requires some prep work and is a bit lengthy.  So, we are going to break this down into 3 posts:

  • Preparation (what to prepare before writing the financial plan)
  • History (looking back on the finances of your business)
  • Future (looking forward on the finances of your business)

First: Preparation

The financial portion of your business plan requires some planning and preparation.  Let’s break it all down.  (NOTE:  This is just the summary in preparation for the actual writing of the financial plan which will take place next Monday and Tuesday.)

Soooo… here is what you are going to need to know.  We’ll assemble this into financial statements next week:

  • Assets – what do you own in your business? (computers, inventory, etc.)
  • Liabilities (AKA Debts) – what do you owe in your business?
  • Equity – how much have you invested (or has someone else invested) in your business?
  • Revenues – how much did you make in sales in 2008?  (this can typically come from your tax return)
  • Expenses – how much did you spend in 2008?  (also should be traceable to your tax return)
  • Cash – where is that cash register?  (not the physical register, but that paper thingie that tracks which checks you’ve written)

Spend the weekend putting these numbers together.  Next week, we’ll be putting them into the “magical” financial statements of your business.

Come back tomorrow for a little business plan break.  We’ll be featuring another fab industry insider.

May 21, 2009 at 6:00 am Leave a comment

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