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Seven Key Topic Areas in a Good Business Plan

December 9th, 2011 Posted at Business

Busineß, doing the business, market, potential market, sole proprietorship

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If you really want to improve your business, the best way to do it is to write a Business Plan. It is not the plan itself that is so important, although it is a valuable asset but the process as it makes you really think about the business and focus on the way that you will operate and grow the business in the future.

There are seven key topic areas in a good business plan as follows:

1. The Executive summary

Although this is at the beginning of the plan, you will write it last as it is an overview of the entire plan. Most banks will read it first or use it when considering future funding so ensure that you have the most important points of the plan written well. Include rationale for needed financing and how this will be used, the growth you will expect as well as the products and services that you provide and staffing required. Remember, you are writing this for someone who may not be familiar with the details of your business so be clear and and comprehensive but also keep it brief so the reader is not bored.

2. Mission statement

This is an enthusiastic statement or two that condense your motivation for doing the business and how others including clients, employees, staff and investors benefit.

3. Company description and history

This is a section where you will talk about when the business started and how it has progressed since then. Include past, present and future products and services that have been sold, and why you have a competitive advantage over similar businesses. Also include the type of business you have under the law (incorporation, sole proprietorship etc.) the physical location and number of staff you employ.

4. Market analysis

In this section you will be talking about your “ideal client” and how far your business reach has extended to this point. You will also outline the potential market you will reach with expansion and the trends that might affect greater demand for your goods and services. Describe the delivery methods you will use (in person, through physical products, internet etc.) as well as the reasons why people will make purchasing decisions (price, quality, trust etc.). Finally, describe the competition and how they attract the same buyers that you want.

5. Marketing plan

This section describes how you will advertise or promote your business in order to increase revenue. Include a budget to cover the costs of preparing materials and having them delivered as well as the pricing strategy that you have developed for the market. (more…)

Start A Coffee Shop Business – Building A Road Map Using The Plan-Do-Check-Act Process

November 17th, 2011 Posted at Business

Busineß, Coffee, coffee business, deming circle, sound business plan

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If you have long dreamed of running a successful coffee business, your inspiration could have come from one of any number of places. Was it a favorite scene from an old movie whose setting was a quaint coffee shop? Maybe you have great memories of studying for finals at a favorite coffee bar. Your inspiration could be that you simply love the smell and taste of coffee – one of the most popular beverages in the world. Or, maybe you just have a nose for business and know a good thing when you see it.

No matter what your inspiration for starting a coffee business, in order to be successful you will need to fortify that passion for having your own coffee business with a solid, cool-headed approach. You need a road map to get you on the path to success. Otherwise, your dreams could end up becoming a very expensive investment that never gives you the return on investment that you expect.

Of course, your future coffee business success lies not only in the planning, but in the doing. And, any experienced business manager will tell you that success is never a destination, but rather a process.

Taking a cue from a well-recognized business management process called PDCA (also called the Deming circle, the Stewhart cycle, or plan-do-study-act), let’s review some key points required to build and execute on a road map to coffee business success. We’ll frame our thinking in terms of Plan-Do-Check-Act.

1. Plan

The planning phase of your new business is one of the most important, since it sets the tone for all of the future steps you will take. (Of course, as the PDCA process indicates, you will be revising your plan over time. But, the first steps you take are key).

The elements that you need to take into consideration for your plan include creating a sound business plan, creating a list of potential locations, designing your coffee bar layout, building a list of potential lenders, creating forecasting plans, and developing your menu.

Remember that all of the items included in the Plan phase should involve your setting targets – or measures – of success. In other words: how will you know if you are successful once you have taken taking each individual action? Be sure to set up concrete metrics that you can later use to evaluate the degree of your success. Remember, metrics can be both quantitative (numbers-based) and qualitative (value or quality-based).

2. Do

Next, it is time to start taking concrete actions. This is the Do phase of the cycle.

For your coffee business, this includes choosing a final location, purchasing your coffee bar equipment, designing your logo and branding materials, hiring contractors, ordering plenty of coffee and other products, and beginning your promotional efforts (both online and via more traditional marketing channels).

3. Check

After you have taken these concrete steps during the Do phase, it is time to check your results against the targets (or metrics) you set up during the Plan phase. This is, appropriately, called the Check phase.

How are you doing? What is working? What is not working? If it helps you to visualize your results, try recording your metrics and your actual results in a spreadsheet or on paper.

4. Act

During the Act phase of the 4-part PDCA process, it is time to evaluate the areas of your coffee business where you have fallen short of your target metrics. In particular, you will want to focus on analyzing the root causes of those shortcomings in your business so that you can continue the cycle back at the Plan phase. Next time around, you will have an improved plan for even better business results. (more…)

Canadian Franchisee Loans and Business Funding – 4 Secrets To Financing A Franchise

November 16th, 2011 Posted at Business

Busineß, financing your franchise, franchise, franchise industry, franchise success

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The inside edge. You want it, we have it! Have we got some tips and secrets to share for you.

We’re talking about financing your franchise – the successful completion of your entrepreneurial dream in Canada. As a franchisee you want to be aware of your options in loans and funding programs that are geared specifically to financing a start up business in the booming franchise industry.

We’re going to discuss 4 key elements of a proven formula for franchise success. What are they? Simply speaking its ensuring you have a business plan that accurately resembles the financial aspects of your business. Number two is the types of emphasis that is put on your own personal background and credit history. Number 3 is the knowledge of franchise financing options in Canada, and number 4, (often # 1 in your mind probably) the amount of personal funds you have to commit or invest to get your business going and your franchisee funding approved.

Let’s dig in! OPM. What is it? It’s stands for other peoples money and its critical you understand that a franchise is composed of two elements with respect to your financing plan – debt (what your borrow) and equity (what you put in). Our key point here is simply that while there is no proper mix of what works for the combination of those two elements. No franchise is financed with 100% borrowed funds – conversely you don’t want to ‘ pay cash ‘ for your business and risk all, or a lot of everything you own (house, savings, etc) for a start up business such as a franchise.

We will also share with you that some of the very specialized franchisee loan program in Canada typically require a 30 – 40% owner equity, or down payment. That can be achieved in several different ways.

Should you tap into your retirement plans to fund your franchise? That’s not our call, but if you have capital outside your savings we would not recommend collapsing RRSP’s, or taking out home mortgages, etc for the purpose of financing and funding your franchise.

Clients often ask how their personal credit history affects their ability to get franchise financing. In general we can say it’s a key point in the whole approval process. Many Canadians aren’t aware that the entire credit history system in Canada is based on a simple score. You should have a score of at least 650 to be successful in traditional franchise finance. So check your score in advance. And by the way, higher is better!

The business plan is a key element of your whole package. Many clients don’t have experience or financial acumen to prepare a proper plan. Not a problem as you can seek a Canadian business financing advisor, or accountant, etc to prepare your plan. A good basic plan comes at a very reasonable cost.

The business plan is your ‘ total picture ‘of your franchise. Basic elements are yourself, your background and business or industry experience, info on your franchise, and some basic financial projections. Naturally the better recognized and successful your brand the more attractive your perceived chances of success are.

As a franchisee what loans and funding is available in Canada. As unbelievable as it may seem the government of Canada, via Industry Canada, is one of the largest players in your franchise success. A program called the BIL / CSBF program is hugely popular and finances mot franchises fewer than 350k in Canada. We strongly recommend you seek out and investigate this program, it’s probably the key to 95% our client’s success in financing a franchise with funding that comes with great rates, terms and structures and limited guarantees. Bottom line, check it out!

So there you have it, 4 key elements, and secrets if you will, to franchisee financing success. Summarized… a solid business plan, some good business or industry experience coupled with a reasonable personal credit history, a down payment that is aligned to your overall financing needs and personal situation, and, last but not least, knowledge of programs such as the BIL which are geared toward franchise finance success. (more…)

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