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How to Develop a Business Plan

How to Develop a Business Plan


>HELLO AND WELCOME TO THIS VIDEO
PRESENTATION ON HOW TO DEVELOP A BUSINESS PLAN, BROUGHT TO YOU BY
THE MISSISSIPPI SMALL BUSINESS DEVELOPMENT CENTERS. THIS
PRESENTATION IS DESIGNED TO ASSIST IN PREPARING AND BREAKING
DOWN THE DIFFERENT PARTS OF A BUSINESS PLAN. THE MSBDC IS
FUNDED IN PART THROUGH A COOPERATIVE AGREEMENT WITH THE
US SMALL BUSINESS ADMINISTRATION. ALL OPINIONS,
CONCLUSIONS, OR RECOMMENDATIONS EXPRESSED ARE THOSE OF THE
AUTHORS AND DO NOT NECESSARILY REFLECT THE VIEWS OF THE SBA.>>PRECIOUS, I’M MITCH.
>NICE TO MEET YOU.>>I’M A BUSINESS COUNSELOR. AND I’M
HERE TO HELP YOU WITH YOUR BUSINESS PLAN. NOW I UNDERSTAND YOU WANT TO
OPEN A DAYCARE? OKAY, AND YOU’RE GOING TO APPLY FOR A LOAN, IS THAT
CORRECT? OKAY, WELL WHAT WE’RE GOING TO DO IS WE HAVE TO WRITE A
DESCRIPTION OF YOUR BUSINESS, HOW YOU’RE GOING TO SET IT UP,
OPERATE IT, THAT KIND OF THING. AND THAT’S THE FIRST PART OF THE BUSINESS
PLAN. WHAT WE’RE GOING TO DO TODAY IS I’M GOING TO SHOW YOU HOW
TO WRITE A NICE DESCRIPTION OF YOUR BUSINESS. I’M GOING TO LET YOU GO
HOME, WORK ON THAT OVER THE WEEKEND. GET IT THE BEST YOU CAN GET
IT AND DO IT IN WORD. ONCE YOU GET IT TO A CERTAIN POINT AND YOU’RE
READY FOR ME TO REVIEW IT, I WANT YOU TO EMAIL IT TO ME. AND
YOU HAVE MY EMAIL ADDRESS. SO YOU’RE GOING TO DO IT IN WORD,
EMAIL IT TO ME, SO THAT WAY I CAN PULL IT UP ON MY COMPUTER
AND GO THROUGH AND REVIEW IT AND EDIT IT, AND MAKE ANY CHANGES
AND THEN I’LL SEND IT BACK TO YOU. SO, ONCE WE GET THE WRITTEN
DESCRIPTION OF YOUR BUSINESS PLAN COMPLETED, THEN WE WILL
START TO WORK ON YOUR NUMBERS PACKET. TODAY WE’RE GOING TO GO
OVER WRITING THE DESCRIPTION, YOU’RE GOING TO WORK ON IT OVER
THE WEEKEND. DO IT IN WORD, EMAIL IT BACK TO ME. I WILL
REVIEW AND EDIT YOUR BUSINESS PLAN AND THEN ONCE THAT IS
FINISHED THEN WE START WORKING ON YOUR NUMBERS PACKET. ONCE
YOUR NUMBERS PACKET IS DONE, THEN YOU ARE READY TO DECIDE
NUMBERS-WISE IS THIS BUSINESS GOING TO WORK? DO I FEEL REALLY
CONFIDENT THAT IT’S GOING TO TURN A PROFIT? THEN ONCE YOU DO
THAT, THEN WE KIND OF PUT TOGETHER THE STUFF THAT YOU NEED
TO TAKE BACK TO THE LENDER AND APPLY FOR YOUR BUSINESS LOAN. SO
WHAT I HAVE PUT TOGETHER IS THE FIRST PAGE OF THIS IS KIND OF A
DESCRIPTION OF WHAT A BUSINESS PLAN IS AND WHY YOU NEED TO
WRITE IT. SO NUMBER ONE WE NEED TO HAVE A GOOD IDEA OF WHAT
YOU’RE GOING TO BE DOING, WHERE YOU’RE GOING TO BE HEADED. AND
WE WANT YOU TO GET SPECIFIC. IF YOUR BUSINESS PLAN IS KEPT UP
HERE IN YOUR HEAD, MENTAL PLANS TEND TO BE VAGUE AND NOT VERY
SPECIFIC. SO THIS REALLY MAKES YOU GET VERY SPECIFIC ON WHAT IT
IS YOU’RE GOING TO BE DOING. IT ALSO MAKES YOU GO THROUGH AND
THINK ABOUT EVERYTHING THAT YOU NEED TO THINK ABOUT IN THE
PROCESS OF STARTING AND RUNNING THIS BUSINESS. SO THAT’S WHAT
THE FIRST PAGE IS, IS OVERALL WHAT IS A BUSINESS PLAN. NOW,
WHEN YOU TURN THE PAGE YOU ARE GOING TO SEE A SAMPLE BUSINESS
PLAN FOR A SEAFOOD RESTAURANT. SO ALL OF THE MAJOR HEADINGS
THAT WE’RE GOING TO WORK ON WITHIN YOUR BUSINESS PLAN ARE IN
BOLD AND UNDERLINED. SO WE START OFF, WE HAVE THE DESCRIPTION OF
THE BUSINESS, AND WE HAVE A MISSION STATEMENT, THEN WE WRITE
A NICE DESCRIPTION OF THE PRODUCTS AND SERVICES THAT
YOU’RE GOING TO BE SELLING. WE TALK ABOUT THE MARKET PLACE, HOW
YOU’RE GOING TO ADVERTISE AND MARKET THE BUSINESS,
MANAGEMENT/OWNERSHIP, THAT’S HOW YOU OWN THE BUSINESS AND HOW
IT’S GOING TO BE RUN, FACILITIES, THAT’S LOCATION,
LONG TERM CONTINGENCY, CONTINUATION AND CONTINGENCY
PLANS, COMMUNITY BENEFITS, AND FINALLY FINANCIAL REQUIREMENTS.
SO THOSE ARE ALL THE MAJOR THINGS THAT WE’RE GOING TO WORK
ON WITHIN THE BUSINESS PLAN. SO ABC, THIS GIVES YOU A SAMPLE. SO
WE PROVIDE A SAMPLE OF WHAT YOU’RE GOING TO WANT YOUR
BUSINESS PLAN TO LOOK LIKE ONCE YOU GO THROUGH AND DO THE
WORKSHEETS. SO THIS IS A SAMPLE. THIS STARTS ON PAGE NUMBER 2 AND
FINISHES ON PAGE NUMBER 5. NOW WHAT I HAVE PUT TOGETHER IS
CALLED THE BUSINESS PLAN DRAFT. AND THIS CORRESPONDS DIRECTLY
WITH ABC FOOD. SO AS YOU CAN SEE, ALL OF THE MAJOR HEADINGS
THAT WE’RE GOING TO WORK UNDER ARE IN BOLD AND UNDERLINED. SO
DESCRIPTION OF BUSINESS, MISSION STATEMENT, WRITE A DESCRIPTION
OF PRODUCTS AND SERVICES, THEY HAVE 14 QUESTIONS UNDER THERE,
THE MARKET, AND SO ON. SO THE WHOLE IDEA IS THAT-AND I WANT
YOU TO DO THIS IN PENCIL. SO WE’RE GOING TO GO OVER EACH
QUESTION ITEM BY ITEM. AND THEN WHAT YOU’RE GOING TO DO IS GO
HOME WITH A PENCIL, ANSWER YOUR QUESTIONS. AND BY THE TIME YOU
DO THAT YOU’VE REALLY KIND OF THOUGHT ABOUT EVERYTHING YOU
NEED TO THINK ABOUT IN THE PROCESS OF STARTING AND RUNNING
THIS BUSINESS AT LEAST INITIALLY. YOU HAVE PLENTY OF
INFORMATION TO GO BACK IN AND TYPE UP A NICE, SOLID BUSINESS
PLAN. SO LET’S TALK A LITTLE BIT ABOUT THE DESCRIPTION OF THE
BUSINESS. FIRST THING IS YOU NEED TO HAVE A NAME. HAVE YOU
PICKED OUT A NAME FOR YOUR BUSINESS YET?
>I THINK SO.>>OKAY. SO WE’RE JUST GOING TO LIST
THE NAME HERE. AND THEN ONCE WE HAVE THE NAME WE NEED TO DECIDE ON
THE LEGAL STRUCTURE OF THE BUSINESS. MY SUGGESTION WOULD BE TO GET WITH
YOUR ACCOUNTANT AND I KNOW I TALKED TO YOU AND I THINK YOUR
UNCLES IS A CPA? OKAY, GET WITH YOUR UNCLE AND SAY I’M LOOKING TO DO
THE DAYCARE AND WHAT ARE YOUR SUGGESTIONS ON THE LEGAL
STRUCTURE OF THE BUSINESS. SOLE-PROPRIETORSHIP, OR YOU MAY
FORM AN LLC, SUB-S CORPORATION, THAT KIND OF THING. BUT TALK TO
YOUR UNCLE AND I WOULD TAKE HIS ADVICE ON THE STRUCTURE OF THE
BUSINESS. NEXT QUESTION, WE NEED TO LIST ANYBODY WHO’S GOING TO
HAVE OWNERSHIP OF THE BUSINESS. WE NEED TO PUT THEIR INFORMATION
THERE. HOURS OF OPERATION, THAT IS WHEN YOUR DOORS ARE OPEN. AND
THEN LOCATION, WE NEED TO LIST THE PHYSICAL ADDRESS OF THE
DAYCARE. NOW I KNOW YOU HAVE A COUPLE OF DIFFERENT LOCATIONS
THAT YOU’RE LOOKING AT, SO FOR RIGHT NOW WE DON’T HAVE TO
ANSWER THAT. WE CAN WAIT ON THAT ONE. BUT AT SOME POINT WE HAVE
TO NARROW DOWN THE LOCATION. SO THAT’S THE FIRST HEADING,
DESCRIPTION OF THE BUSINESS, NAME, LEGAL STRUCTURE, WHO THE
OWNERS ARE, HOURS OF OPERATION, AND THE LOCATION. NOW THE NEXT
HEADING THAT I’VE INCLUDED IS THE MISSION STATEMENT. NOW A
MISSION STATEMENT IS NOT ABSOLUTELY NECESSARY IN A
BUSINESS PLAN, BUT I LIKE TO INCLUDE ONE, ESPECIALLY IF
YOU’RE GOING TO HAVE EMPLOYEES YOU CAN GO OVER THE MISSION
STATEMENT AND SAY THIS IS WHAT WE’RE TRYING TO ACHIEVE. THIS
PARTICULAR ONE IS FOR A SEAFOOD RESTAURANT, I HAVE “EVERY GUEST
WHO CHOOSES ABC FOOD LEAVES HAPPY.” AND IF EVERY GUEST THAT
WERE TO COME IN WERE TO LEAVE HAPPY, WHAT WOULD HAPPEN?
>IT WOULD GET BUSINESS.>>IT WOULD GET BUSINESS BECAUSE
THEY WOULD LEAVE AND GO OUT AND TELL OTHER PEOPLE. THAT’S KIND OF A
SHORT, SWEET MISSION STATEMENT. IF YOU WANT HELP WITH A MISSION
STATEMENT, YOU CAN GO TO MISSIONSTATEMENTS.COM. AND
THERE’S THOUSANDS OF MISSION STATEMENTS ON THERE. AND YOU
CLICK UNDER THE INDUSTRY THAT I’M GOING TO BE GOING INTO IF
YOU WANT TO GET SOME HELP WITH THAT. BUT LIKE I SAID A MISSION
STATEMENT IS NOT NECESSARY FOR THE BUSINESS PLAN. THE NEXT
THING WE NEED TO WORK ON IS THE DESCRIPTION OF THE PRODUCT
AND/OR SERVICES THAT YOU’RE GOING TO BE PROVIDING. SO WE’RE
GOING TO FLIP FORWARD TO THE BUSINESS PLAN GRAPH. AND I THINK
I HAVE 13 OR 14 QUESTIONS UNDER THERE THAT WILL HELP YOU WRITE A
DESCRIPTION OF THE PRODUCT AND/OR SERVICES THAT YOU’RE
GOING TO BE SELLING. THAT BEING SAID, AS YOU GO THROUGH AND
ANSWER THESE QUESTIONS, NOT EVERY SINGLE QUESTION IS GOING
TO APPLY TO YOUR BUSINESS. SO, IF YOU COME TO ONE THAT REALLY
DOESN’T APPLY TO YOUR BUSINESS YOU CAN JUST PUT N/A FOR NOT
APPLICABLE ON THERE, AND YOU KNOW IT DOESN’T APPLY AND I’M
NOT GOING TO ANSWER THAT QUESTION. IF YOU COME TO A
QUESTION THAT YOU WANT TO DO SOME RESEARCH ON, MAYBE GET ON
THE INTERNET, CALL AROUND, ASK SOME QUESTIONS, CALL ME BACK,
THAT KIND OF THING, I WOULD JUST PUT A QUESTION MARK THERE, SO
YOU KNOW THAT’S A QUESTION I WANT TO ANSWER BUT I REALLY
DON’T HAVE THE INFORMATION TO ANSWER IT RIGHT NOW. AND AGAIN,
I WOULD DO IT IN PENCIL SO YOU CAN GO BACK AND MAKE ANY
CHANGES, ERASE, MODIFY YOUR BUSINESS PLAN AS NEEDED. LIKE I
SAID, WE’RE JUST GOING TO TAKE THE QUESTIONS THAT YOU ANSWER
AND THEN TURN AROUND AND TURN THAT INTO A BUSINESS PLAN LIKE
ABC FOOD. SO, LET’S GO THROUGH AND START WITH BACK ON PAGE
NUMBER 7. PRODUCTS AND SERVICES, SO DESCRIBE YOUR BUSINESS
PRODUCT OR SERVICE. SO HERE YOU JUST WANT TO WRITE A GOOD SOLID
DESCRIPTION, SHORT AND SWEET, EXACTLY WHAT SERVICES YOU’RE
GOING TO BE PROVIDING. SO YOU MIGHT START OFF WITH YOUR
BUSINESS IS GOING TO PROVIDE DAYCARE SERVICES FOR CHILDREN
BETWEEN THE AGES OF-WHAT AGE ARE YOU GOING TO START TAKING IN? 6
WEEKS? 6 WEEKS THROUGH 5 YEARS OF AGE, BASICALLY THROUGH
PRESCHOOL. ARE YOU GOING TO BE OFFERING A SUMMER PROGRAM OR AN
AFTER SCHOOL PROGRAM? OKAY, SO YOU’RE GOING TO WANT TO INCLUDE
THAT IN THE DESCRIPTION OF WHAT YOU’RE GOING TO BE SELLING. AND
YOU ALMOST WANT TO WRITE THIS LIKE IT IS YOUR ELEVATOR SPEECH,
LIKE A LITTLE 30 SECOND COMMERCIAL. SO SOMEBODY SAYS,
HEY, WHAT DO YOU DO? AND YOU CAN SAY, WELL I OWN THIS IS THE NAME
OF MY DAYCARE CENTER. AND YOU CAN VERY METHODICALLY TELL THEM
EXACTLY WHAT IT IS THAT YOU ARE, IN THE HOPES THAT CERTAIN PEOPLE
WILL HEAR OH, THEY OFFER THAT, THAT’S SOMETHING THAT I NEED. SO
THAT’S HOW WE GO THROUGH, WE JUST START OFF WRITING A
DESCRIPTION OF YOUR BUSINESS SERVICES. WHAT BENEFITS DO YOU
SELL? OF COURSE THE BENEFIT THAT YOU SELL IS YOU’RE PROVIDING A
SAFE LOCATIONS FOR WORKING MOTHERS’ AND FATHERS’ CHILDREN
TO GO DURING THE DAY WHILE THEY’RE AT WORK. ADDITIONAL
BENEFITS MIGHT BE ANYTHING THAT YOU DO ALONG EDUCATION. WHAT
TYPE OF EDUCATION SERVICES DO YOU OFFER? YOU’VE GOT A STRONG
BACKGROUND IN EDUCATION. WE CERTAINLY WANT TO TAKE THAT INTO
CONSIDERATION. HOW IS YOUR PRODUCT OR SERVICE DIFFERENT
FROM CURRENT PRODUCTS OR SERVICES ON THE MARKET? SO
THERE’S OTHER DAYCARES IN THE AREA. WHAT’S GOING TO SET YOUR
DAYCARE APART FROM THE OTHERS? I KNOW WE TALKED ABOUT LAYING THE
FOUNDATION-AS FAR AS READING PROGRAMS, PRE-READING PROGRAMS,
THAT TYPE OF THING. SO TALK ABOUT THAT IN YOUR BUSINESS
PLAN. WHEN WAS YOUR BUSINESS STARTED? IF NOT CURRENTLY IN
BUSINESS, WHEN DO YOU PLAN TO START? SO WHEN WAS YOUR-I THINK
THAT YOUR PROPOSED DATE THAT YOU WERE ACTUALLY GOING TO OPEN WAS
GOING TO BE SUMMER OF 2013. IS THAT RIGHT? WELL THAT’S GOOD,
BECAUSE THAT GIVES YOU PLENTY OF TIME TO WORK ON THIS STUFF AND
GET EVERYTHING TOGETHER. WE CERTAINLY DON’T WANT TO JUMP
INTO IT AND OPEN PREMATURELY WHERE YOU REALLY HAVEN’T HAD A
CHANCE TO GO THROUGH AND WORK EVERYTHING OUT. THE NEXT
QUESTION, HOW DO YOU MAKE YOUR PRODUCT? YOU DON’T REALLY MAKE
YOUR PRODUCT. SO THAT WOULD BE AN N/A QUESTION. JUST PUT N/A,
NOT APPLICABLE, AND WE MOVE ON TO THE NEXT QUESTION. DESCRIBE
THE MAJOR MATERIALS OR INVENTORY YOU WILL NEED. NOW, HERE WE’RE
TALKING ABOUT FOR A DAYCARE ART SUPPLIES, CRAFT SUPPLIES,
CLEANING SUPPLIES, AND WHAT ARE YOU GOING TO FEED THE KIDS. SO
MAJOR MATERIALS AND INVENTORY, I LIKE TO THINK ABOUT THAT AS
STUFF THAT YOU KIND OF GO THROUGH ON A REGULAR BASIS. COTS
WOULD BE MORE STARTUP TYPE STUFF. BUT THINK OF MAJOR
MATERIALS OR INVENTORY AS STUFF THAT EVERY TWO WEEKS OR COUPLE
OF MONTHS I HAVE TO GO THROUGH AND REORDER THIS STUFF. CLEANING
SUPPLIES, FOOD PRODUCTS, ARTS AND CRAFTS TYPE STUFF, THAT TYPE
OF THING. SO WE WANT TO GO THROUGH AND LIST THAT OUT AND
THEN WE NEED TO FIGURE OUT WHO ARE THE KEY SUPPLIERS GOING TO
BE. SO WHERE ARE YOU GOING TO GO TO GET THAT STUFF? AND IN THE
EVENT THAT SOMETHING HAPPENS TO YOUR KEY SUPPLIER, WE WANT TO
HAVE A BACKUP SUPPLIER IN MIND WE CAN GO TO. IF YOUR KEY
SUPPLIER GETS HAMMERED BY A TORNADO OR THE BUILDING BURNS
DOWN OR THEY GO OUT OF BUSINESS, YOU WANT TO HAVE THAT BACKUP
SUPPLIER IN MIND. I WOUDLN’T WORRY ABOUT HOW DO YOU
DISTRIBUTE YOUR PRODUCTS TO CUSTOMERS. THEY’RE GOING TO BE
COMING TO YOU. SO THAT’S PROBABLY AN N/A QUESTION FOR
YOUR BUSINESS PLAN. NOW, HOW WILL YOU PRICE YOUR SERVICES OR
YOUR PRODUCTS? I KNOW YOU DID SOME RESEARCH AND THE GOING RATE
FOR DAYCARES RUNS ON AVERAGE $100 PER WEEK PER KID. AND WE
TALKED ABOUT YOU PROBABLY DON’T NEED TO GO ANY LOWER THAN THAT.
BUT ONE OF THE THINGS WE WILL DO AS WE GET INTO YOUR CASH FLOW IS
WE’RE GOING TO LOOK AT YOUR PRICING STRATEGY, AND SEE IF
YOU’RE CHARGING THIS AMOUNT AND YOU GET THIS MANY KIDS, BY THE
TIME WE GO IN AND LOOK AT THE EXPENSES, ARE YOU PRICED SO THAT
YOU’RE TURNING A PROFIT? BUT WE’LL GET INTO A LITTLE BIT MORE
ABOUT THAT ON CASH FLOW. WHAT ARE YOUR SELLING TERMS? ARE YOU
GIVING ANY DISCOUNTS? ARE YOU GOING TO BE OFFERING-IF A FAMILY
COMES IN AND THEY HAVE 2 OR 3 KIDS, ARE YOU GOING TO GIVE A
DISCOUNT? OKAY, SO WE’RE GOING TO WANT TO TALK ABOUT THAT. THE
NEXT HEADING THAT WE’RE GOING TO WORK UNDER IS THE MARKET. FIRST
THING, WHAT ARE THE TRENDS IN YOUR INDUSTRY? NOW THAT’S ONE OF
THE THINGS I CAN HELP YOU OUT WITH. IF YOU WANT TO GET AN IDEA
WHAT ARE THE OVERALL NATIONAL TRENDS AS FAR AS DAYCARE GOES,
WE CAN ORDER THAT INFORMATION FOR YOU. IT TAKES 2-3 WEEKS TO
GET IN. BUT IT’S PROBABLY WORTH KNOWING. IF YOU KIND OF WANT TO
GET AN IDEA OF WHAT’S IN THE LOCAL MARKETPLACE, WE CAN ALSO
GET THAT INFORMATION FOR YOU. I CAN ORDER A COMPETITOR’S LIST
THAT WILL SHOW YOU WHO YOUR COMPETITORS ARE, WHAT THE NAME
OF THE BUSINESS IS AND IT’LL GIVE THEIR ADDRESS, CONTACT
INFORMATION, THAT KIND OF THING. BUT IT MIGHT BE GOOD TO KIND OF
SCOUT OUT EXACTLY WHO IS IN THE AREA, WHERE THEY’RE LOCATED
BECAUSE THERE MAY BE A COMPETITOR OR TWO EVEN IF YOU
SCOUTED THE COMPETITION YOURSELF. THERE MAY BE A FEW OUT
THERE THAT YOU MISSED AND IT MIGHT BE NICE TO KNOW WHO THEY
ARE AND WHERE THEY’RE LOCATED. WHO IS YOUR TARGET MARKET?
TARGET MARKET IS YOUR BREAD AND BUTTER CUSTOMER. WHO IS YOUR
BEST-TYPE CUSTOMER? SO WHO IS GOING TO BE YOUR TARGET MARKET?
THAT’S GOING TO BE MOMS.>I WAS GOING TO SAY PROBABLY MOST OF
THE SINGLE PARENTS THAT DON’T HAVE ANYONE ELSE TO HELP.
>>YEAH. SINGLE PARENTS. I WOULD SAY ANY FEMALE THAT IS PREGNANT
AND HAVE KIDS UP TO ABOUT 5 YEARS OF AGE. NOW THAT’S FOR
YOUR REGULAR TARGET MARKET. NOW DURING THE SUMMER, YOU TOLD
YOU’RE GOING TO BE OFFERING THAT PROGRAM. YOU’RE GOING TO BE
TAKING KIDS UP TO LIKE 10 OR 12 YEARS OF AGE?
>12.>>OKAY. SO YOU REALLY KIND OF HAVE 2
TARGET MARKETS. DURING THE REGULAR SCHOOL YEAR YOU HAVE ONE TARGET
MARKET WHICH IS GOING TO BE MOMS PREGNANT ALL THE WAY TO SHE
HAS 5 YEAR OLDS. AND THEN THAT CHANGES DURING THE SUMMER. SO
WORK ON THAT. THINK ABOUT THAT TARGET MARKET A LITTLE BIT. NOW THE
BIG THING WITH THE TARGET MARKET IS HOW ARE YOU GOING TO REACH THEM?
WE’RE GOING TO TALK ABOUT THAT IN THE MARKETING PROGRAM. BUT, NEXT
QUESTION IN THE MARKET, AND I WOULD LIKE FOR YOU TO START TO THINK
WHO MAKES UP YOUR RING OF POINTERS? AND RING OF POINTERS ARE
PEOPLE THAT CAN POINT CUSTOMERS YOUR DIRECTION KIND OF IN BULK. SO,
WITH A DAYCARE, RING OF POINTERS-MOMS JUST FOUND OUT
SHE’S PREGNANT ALL THE WAY UP TO MOM HAS 5 YEAR OLDS, YOU KNOW.
WHO WOULD YOUR RING OF POINTERS BE? I WOULD LOOK AT CONTACTING
CHURCHES THAT DON’T HAVE DAYCARES. THAT WOULD CERTAINLY
BE ONE GROUP THAT COULD POINT A LOT OF POTENTIAL CUSTOMERS YOUR
WAY. PEDIATRICIANS, SCHOOLS, DOCTORS OFFICES, ANYTHING LIKE
THAT. YOU WENT TO MY FIRST STEPS CLASS, RIGHT? REMEMBER, WE
TALKED ABOUT YOU GO AROUND AND YOU DO PRESELL, AND YOU GO AND
FIND THE DEMAND IN THE MARKET PLACE. I WOULD GO AHEAD AND GET
THAT STUFF TOGETHER, GET YOUR BUSINESS CARDS, FLYERS,
BROCHURES, SHIRT WITH THE NAME ON IT, GO OUT AND VISIT SOME OF
THOSE ENTITIES AND SAY, HEY, THIS IS WHO I AM, THIS IS WHAT
I’M GOING TO BE DOING, AND START TO CREATE AWARENESS FOR YOUR
BUSINESS IN THE MARKETPLACE. BUT ANYWAYS, THAT COULD EFFECTIVELY
BE DONE BY LOOKING AT THOSE RING OF POINTERS. AGAIN, WHERE ARE
YOUR CUSTOMERS AND POINTERS LOCATED? THAT’S REALLY KIND OF
GEOGRAPHICALLY. WE’RE LOOKING AT WHAT AREA ARE YOU GOING TO BE
PULLING FROM. AND WE WANT TO IDENTIFY THAT BECAUSE IF YOU’RE
IN ONE CERTAIN AREA, THAT WILL HELP YOU NARROW DOWN WHO YOUR
POINTERS ARE AND HOW THAT ADVERTISING TARGET THEM AND
MARKET THE BUSINESS. SO THAT’S THE MARKET. NOW, OTHER THING IN
THE MARKET IS WE WANT TO LOOK AT COMPETITORS. WE REALLY WANT TO
PICK YOUR COMPETITORS APART. WHERE ARE THEIR STRENGTHS? WHERE
ARE THEIR WEAKNESSES? AND AGAIN, THESE TWO QUESTIONS REPEAT
THROUGHOUT THE BUSINESS PLAN AND YOU’RE GOING TO HEAR A LOT WHEN
WE WORK TOGETHER IS COMPETITION’S STRENGTHS,
WEAKNESSES, AND WHAT IS YOUR COMPETITIVE ADVANTAGE. MEANING,
HOW IS YOUR BUSINESS DIFFERENT AND PREFERABLY BETTER FROM YOUR
COMPETITORS? YOU KNOW, YOU OFFER BETTER QUALITY OF SERVICE? IS
YOUR PRICING BETTER? BETTER VALUE? I KNOW THAT YOU HAD
INDICATED THAT YOU FELT THERE WAS KIND OF A LACK OF SYSTEMATIC
EDUCATION FOR THE YOUNGER KIDS, WHERE YOU’RE DOING THAT INITIAL
READING PROGRAM. SOME OF THE DAYCARES, IT’S MORE OF A COME
IN, DROP YOUR KID OFF, LET HIM PLAY ALL DAY. AND I KNOW YOU’RE
WANTING TO DO MORE A-B-C’S AND 1-2-3’S AND LAYING THAT
FOUNDATION. SO THAT’S CERTAINLY WHAT WE’RE GOING TO TALK ABOUT
IN THE BUSINESS PLAN WITH THE COMPETITIVE ADVANTAGE. NEXT
SECTION IS ADVERTISING AND MARKETING. NOW, HOW WILL YOU
REACH YOUR TARGET MARKET? SPECIFICALLY WE ARE GOING TO GO
AFTER THE TARGET MARKETS THAT WE TALKED ABOUT. NOW THE OTHER
THING WHEN YOU ARE LOOKING AT ADVERTISING AND MARKETING IS
SIMPLY CREATING A PRESENCE IN THE MARKETPLACE. THE TWO OF
THOSE ARE REALLY A LITTLE BIT DIFFERENT. CREATING A PRESENCE
IN THE MARKETPLACE, THAT MAY BE SIGNAGE ON THE BUILDING, THAT
CAN BE AN AD IN THE YELLOW PAGES, THAT CAN BE A WEBSITE,
THAT TYPE OF THING. THE TARGET MARKET WOULD BE WHERE YOU REALLY
GO AFTER THAT BREAD AND BUTTER TYPE OF CLIENT. SO WE WANT TO
THINK A LITTLE BIT ABOUT TARGET MARKET, HOW YOU’RE GOING TO
REACH THEM, AND THEN ALSO CREATING A PRESENCE IN THE
MARKETPLACE. WHAT PROMOTIONAL MARKET MATERIALS ARE YOU GOING
TO DEVELOP? HERE WE’RE TALKING ABOUT ADS, CATALOGS, FLYERS,
WEBSITE, UTILIZING SOCIAL MEDIA, THOSE TYPES OF THINGS. DESCRIBE
ANY EXTRA CUSTOMER SERVICES THAT YOU’RE GOING TO PROVIDE. IS
THERE ANYTHING YOU THINK YOU’RE GOING TO BE PROVIDING THAT NOBODY
ELSE IS PROVIDING?>I’M THINKING THAT FOR AFTER SCHOOL
SERVICES, WE MAY HAVE A BUS THAT WILL PICK THEM UP FROM SCHOOL
AND BRING THEM TO THE DAYCARE.>>OKAY. THAT’S AN EXCELLENT
EXAMPLE OF EXTRA CUSTOMER SERVICES. NOW HERE I HAVE
DESCRIBE THE ADVERTISING, PROMOTING, OR PRE-SELLING
ACTIVITIES IN THE PRE-OPENING STAGE. YOU’RE GOING TO OPEN A
DAYCARE, AND WHEN YOU FIRST OPEN UP YOUR DOORS YOU’RE IMMEDIATELY
GOING TO HAVE OVERHEAD. CORRECT? YOU’VE GOT INSURANCE, YOU’VE GOT
YOUR STAFF THAT YOU HAVE TO PAY. YOU HAVE TELEPHONE, ALL THAT
OTHER STUFF. ONE OF THE THINGS THAT YOU’RE GOING TO WANT TO DO
IS GO AHEAD AND START SELLING SPOTS IN YOUR DAYCARE. YOU DON’T
WANT TO WAIT UNTIL YOU OPEN UP YOUR DOORS. MY SUGGESTION WOULD
BE TO GO AHEAD AND TALK TO YOUR UNCLE AND FIND OUT IF YOUR UNCLE
HAS AN ATTORNEY THAT HE LIKES. AND THEN GO TO THE ATTORNEY AND
SAY, OKAY, WE ARE GOING TO BE OPENING UP THIS DAYCARE AND I
WANT TO GO AHEAD AND START PRE-SELLING SPOTS IN THE
DAYCARE. WHAT DO I NEED TO PUT TOGETHER? AND THEY HAVE THEM
HELP YOU GET TOGETHER A CONTRACT TO DO THAT. SO IF SOMEBODY FINDS
OUT YOU’RE OPENING UP A DAYCARE, YOU ALREADY HAVE ALL OF THAT PUT
TOGETHER, HERE’S YOUR DEPOSIT, AND SO ON. THE OTHER THING THAT
YOU’RE GOING TO WANT TO CHECK WITH THE ATTORNEY ON IS IF YOU
GO AHEAD AND START TAKING MONEY IN BEFORE YOU OPEN UP YOUR
DOORS, YOU MAY NEED TO OPEN UP AN ESCROW ACCOUNT THROUGH THE
ATTORNEY. BASICALLY THE WAY THAT OPERATES IS THAT ANY OF THE
SPOTS THAT YOU GO AHEAD AND SELL AND SOMEBODY COMES IN AND THEY
PUT A DEPOSIT DOWN OR PAY FOR WHATEVER SPOT FOR THEIR KID, AND
YOU TAKE MONEY IN, SINCE YOU HAVEN’T OPENED UP YOUR DOORS YET
THE SAFEST THING TO DO IS TO HAVE THAT MONEY GO TO THE
ATTORNEY. AND THE ATTORNEY OPENS UP AN ESCROW ACCOUNT. AND THE
ATTORNEY HOLDS THAT MONEY UNTIL YOU ACTUALLY OPEN THE DOORS TO
YOUR BUSINESS. BUT AGAIN, YOU’RE GOING TO WANT TO CHECK WITH YOUR
ATTORNEY ON THAT. BUT MY GOAL WOULD BE TO FIGURE OUT WHAT IS
MY BREAK-EVEN POINT SALES-WISE. IN OTHER WORDS, HOW MANY KIDS DO
I HAVE TO SELL TO PAY MY BILLS THAT FIRST MONTH? AND I WANT TO AT
LEAST PRESELL THAT MANY SPOTS OR MORE BEFORE I OPEN MY DOORS. I
GIVE MYSELF A SALES GOAL. BUT ANYWAY, YOU WANT TO THINK ABOUT
THAT. IF YOU’RE GOING TO BE OPENING UP THIS BUSINESS, HOW
ARE WE GOING TO ADVERTISE IT AND PROMOTE IT AND PRESELL THOSE
SPOTS BEFORE WE EVER OPEN OUR DOORS. YOU DON’T WANT TO WAIT
UNTIL THE DOORS ARE OPEN BEFORE YOU START SIGNING KIDS UP. I HAD
A CLIENT OVER IN ANOTHER PART OF THE STATE THAT OPENED UP A
DAYCARE ABOUT A YEAR AGO. AND SHE WENT THROUGH AND DID THIS
PRE-SELLING PROCESS AND SHE HAD A WAITING LIST 30 DAYS INTO
OPENING HER DOORS. AND SHE’S HAD A WAITING LIST EVER SINCE THEN.
SO AS WE GO THROUGH THIS PROCESS, THAT PRE-ADVERTISING,
PRE-SELLING, PRE-BOOKING SPOTS IS VERY IMPORTANT IN THE DAYCARE
BUSINESS. SO CERTAINLY CONSIDER HOW YOU’RE GOING TO DO THAT. AND
AGAIN, WE NEED THE ACCOUNTANT TO HELP WITH YOU SOME THINGS. AND
WITH THAT PRE-SELLING I WOULD CERTAINLY BRING HIM IN TO MAKE
SURE YOU ARE IN COMPLIANCE WITH EVERYBODY. BRING THE ATTORNEY IN
ON THAT. MOVING ON, WE HAVE MANAGEMENT AND OWNERSHIP. AND
THE FIRST PART, IF YOU NOTICE, I HAVE AS UNDER OWNERSHIP. AND I
HAVE LIST THE MOST IMPORTANT QUALITIES THAT ANSWER THE
QUESTION, DO YOU HAVE THE EXPERIENCE AND/OR EDUCATION IN
THE BUSINESS TO MAKE IT WORK? THAT’S ONE OF THE THINGS,
ESPECIALLY WITH YOUR APPLYING FOR A LOAN, THE LENDER IS GOING
TO WANT TO HAVE A REAL GOOD IDEA OF WHAT YOUR BACKGROUND IS. I
KNOW YOU HAVE A TEACHING BACKGROUND, YOU’VE ALSO WORKED
IN DAYCARES, SO YOU REALLY HAVE A LOT TO SELL THE LENDER ON WITH
YOUR BACKGROUND. SO THAT’S THE TOP PORTION IS REALLY KIND OF
SELLING YOU NOW. I’VE DONE LOAN PACKAGES FOR THIS PARTICULAR
LENDER A NUMBER OF TIMES AND THEY ALWAYS WANT A RESUME ON
ANYBODY THAT HAS OWNERSHIP IN THE BUSINESS. I KNOW YOU HAVE A
RESUME THAT GOES BACK A FEW YEARS. SO I NEED YOU TO GO AHEAD
AND UPDATE THAT RESUME AND WE’LL INCLUDE THAT IN THE LOAN
PACKAGE. SO, FIRST PORTION HERE, OWNERSHIP, WE’RE SELLING THE
LENDER ON YOU. NOW WHEN WE GET DOWN TO THE MANAGEMENT SECTION
WE’RE REALLY TALKING ABOUT HOW THE BUSINESS IS GOING TO BE
MANAGED. SO FIRST THING THAT WE NEED TO LOOK OVER IS THE
ACCOUNTING, BOOKKEEPING, BUDGETING PORTION OF THE
BUSINESS. SO WE NEED TO DECIDE WHAT KIND OF BOOKKEEPING SYSTEM
YOU’RE GOING TO HAVE, WHO IS GOING TO DO THE SETUP. ONCE THE
SYSTEM IS SETUP, WHO IS GOING TO TRAIN EITHER YOU OR WHOEVER IS
GOING TO BE YOUR BOOKKEEPER ON THE SYSTEM. AND THEN ALSO YOU’RE
GOING TO NEED AN ACCOUNTANT TO OVERSEE THAT FUNCTION TO COME IN
AND DO A QUARTERLY REVIEW TO MAKE SURE YOU’RE DOING
EVERYTHING RIGHT. AND ALSO TO DO YOUR YEAR END TAXES FOR YOU. I
KNOW WE HAD TALKED ABOUT GETTING SETUP ON QUICKBOOKS. AND YOUR
UNCLE KNOWS QUICKBOOKS. SO THE WAY I WOULD DESCRIBE THIS IS,
I’M GOING TO USE QUICKBOOKS ACCOUNTING SYSTEM AND I WOULD
LIST MY UNCLE AS CPA TO COME IN AND DO THE SETUP. HE’S ALSO
GOING TO TRAIN ME ON THE SYSTEM AND DO A QUARTERLY REVIEW AND
ALSO DO MY YEAR END TAXES. SO THAT’S REALLY WHAT WE’RE TALKING
ABOUT. WE SELECT THE SYSTEM, WE HAVE A PROFESSIONAL SET IT UP,
THE PROFESSIONAL TRAINS YOU THE USER ON THE SYSTEM, AND THE
PROFESSIONAL ALSO DOES THE QUARTERLY AND ANNUAL REVIEW
EVERY YEAR. NOW ONCE YOU’VE BEEN IN THIS BUSINESS FOR A YEAR, YOU
MAY NOT NEED YOUR UNCLE TO COME IN EVERY QUARTER. THE FIRST YEAR
I’M THINKING I WANT A CPA TO COME IN AT LEAST EVERY 3 MONTHS
WHILE I’M DOING MY QUARTERLY STUFF AND MAKE SURE THAT I GOT
ALL OF THIS DONE RIGHT. AND YOU’LL KNOW WHEN YOU’RE
COMFORTABLE ENOUGH TO SAY I DON’T NEED YOU HERE EVERY
QUARTER BUT I CERTAINLY WILL NEED YOU TO DO MY YEAR END TAXES
FOR ME. SO THAT’S THE ACCOUNTING, BOOKKEEPING, AND
BUDGETING. NOW, HUMAN RESOURCES AND RISK MANAGEMENT. WITH THE
DAYCARE YOU’RE GOING TO BE HIRING A LOT OF PEOPLE. WE NEED
TO MAKE SURE THAT-I WOULD SUGGEST GETTING TOGETHER AN
EMPLOYEE HANDBOOK THAT KIND OF GOES OVER RULES AND REGULATIONS.
AND YOU MAY NEED SOMEBODY WITH A HUMAN RESOURCES BACKGROUND TO
COME IN AND MAKE SURE THAT YOU ARE DOING EVERYTHING THAT YOU
NEED TO DO CORRECTLY. BECAUSE HERE’S THE DEAL, IF I HAVE ZERO
EMPLOYEES OR I HIRE MY FIRST EMPLOYEES OR I GO UP TO ABOUT
FIVE EMPLOYEES, I’M KIND OF UNDER A CERTAIN GUIDELINE AS FAR
AS WHAT I HAVE TO BE IN COMPLIANCE WITH. ONCE I END
UP-AND I THINK WE INITIALLY SAID THAT YOU WERE GOING TO HAVE 8 TO
10 EMPLOYEES, ONCE YOU GO ABOVE THAT FIFTH EMPLOYEE, THERE’S
SOME ADDITIONAL THINGS THAT YOU KIND OF HAVE TO HAVE IN PLACE AS
FAR AS YOUR FILING SYSTEM, EMPLOYEE RECORDS, THAT KIND OF
THING. SO, AGAIN, I LIKE TO GO THROUGH MY ACCOUNTANT AND SAY,
OKAY, I’M GOING TO HAVE 8 EMPLOYEES. NOW WHEN WE GO
THROUGH AND GET EVERYTHING SET UP, WHAT ALL DO I NEED TO DO.
AND I’M TALKING ABOUT EMPLOYEE HANDBOOK, YOU MAY NEED TO GO
THROUGH AND GET HELP WITH I9 VERIFICATION, MAKING SURE YOUR
W4’S ARE IN COMPLIANCE, THOSE KINDS OF THINGS. SO, THAT’S
WHO’S GOING TO BE HANDLING MANAGEMENT AND HUMAN RESOURCES
TYPE OF STUFF. OTHER THINGS TO LOOK AT, AND I KNOW THAT YOU’RE
GOING TO BE HANDLING THE MARKETING AND ADVERTISING OF THE
BUSINESS. CUSTOMER SERVICE, YOU’RE GOING TO BE THE ONE
MAKING SURE YOUR CUSTOMERS ARE HAPPY. QUALITY OF CONTROL OF
PRODUCTS OR SERVICES, YOU KNOW IF YOU WERE GOING TO HIRE
SOMEBODY ELSE TO DO SOME OF THESE THINGS THEN I MIGHT LIST
THE PERSON THAT’S GOING TO BE IN CHARGE OF MARKETING AND
ADVERTISING, OR THIS IS THE PERSON THAT’S GOING TO BE IN
CHARGE OF QUALITY CONTROL AND PRODUCTS OR SERVICES. BUT SINCE
YOU’RE GOING TO BE DOING IT ALL I MAY JUST LUMP ALL THOSE
TOGETHER. OKAY? NOW, ON PAGE NUMBER 14 WE HAVE SALES
MANAGEMENT. AND I HAD INCLUDED A DESCRIPTION OF THE SELLING
PROCESS. SO ONE OF THE THINGS THAT YOU’RE GOING TO WANT TO PUT
TOGETHER, YOU’RE GOING TO WANT TO TRAIN YOUR RIGHT HAND PERSON
IN THIS IS THE SELLING PROCESS. BY THE SELLING PROCESS I MEAN
SOMEBODY COMES IN AND SAYS, OKAY, I’M INTERESTED IN GETTING
A SPOT FOR MY DAUGHTER OR MY SON. YOU WANT TO SYSTEMATICALLY
LAY OUT HOW I TAKE THEM THROUGH THE PROCESS. YOU’RE PROBABLY
GOING TO START OFF WITH COME IN TO THE OFFICE AND YOU’RE GOING
TO DO A MEET AND GREET AND PROVIDE SOME GENERAL
INFORMATION. AND THEN FROM THERE I WOULD SUGGEST TAKING THEM ON A
TOUR OF THE FACILITY. THEIR CHILD IS GOING TO BE A CERTAIN
AGE SO THEY’RE GOING TO BE IN A CERTAIN ROOM. TAKE THEM AND LET
THEM MEET THE TEACHER. THIS IS GOING TO BE THE TEACHER, SHE’LL
BE THE ONE TAKING CARE OF YOUR SON OR DAUGHTER. AND THEN
FINALLY YOU COME BACK TO THE OFFICE AND WE NEED TO HAVE A
LITTLE CLOSER. SO DON’T WANT TO JUST TAKE THEM BACK AND HAND
THEM SOME PAPERWORK. YOU WANT TO HAVE A LITTLE SOMETHING TO TRY
AND MAKE THE SALE OR GET THEM TO RESERVE A SPOT. SO MY SUGGESTION
MIGHT BE, YOU BRING THEM BACK, YOU’VE TAKEN THEM ON THE TOUR,
YOU GO OVER THE PRICING STRUCTURE. AT THE END OF THE
PROCESS, YOU SAY, OKAY, MR. OR MRS. JONES, IF YOU WOULD LIKE TO
RESERVE A SPOT FOR LITTLE SUSIE TODAY, I NEED FOR YOU TO WRITE A
CHECK FOR THIS AMOUNT AND SIGN RIGHT HERE. BUT MAKE SURE YOU
ASK FOR THAT SALE. DON’T JUST LET THEM COME IN. YOU DON’T WANT
TO BE LIKE-I DON’T WANT TO NAME THE BIG BOX STORE. BUT SOMETIMES
YOU GO TO THESE BIG BOX STORES AND YOU WANDER AROUND INSIDE THE
PLACE FOR HALF AN HOUR OR 45 MINUTES AND YOU WALK OUT AND
DON’T BUY ANYTHING BECAUSE THERE’S NOBODY THERE TO HELP YOU
AND NOBODY TO KIND OF HELP YOU THROUGH THAT SALES PROCESS. SO,
YOU WANT TO MAKE SURE THAT IF YOU’RE NOT THERE, SOMEBODY ELSE
IS TRAINED ON THAT EXACT SAME PROCESS. OKAY, EMPLOYEE AND
CUSTOMER THEFT. NOW WITH A DAYCARE, YOU DON’T HAVE A CASH
REGISTER. AND THERE’S REALLY NOT A LOT FOR YOUR EMPLOYEES TO
STEAL. SO I WOULD NOT BE OVERLY CONCERNED ABOUT THAT. BUT, THAT
BEING SAID, YOU DO HAVE FOOD PRODUCTS AND THAT KIND OF THING.
JUST BE AWARE THAT IF YOU HAVE STUFF THAT PEOPLE WANT, A LOT
TIMES, ESPECIALLY THERE ARE EMPLOYEES THAT WILL NOT PAY FOR
IT, THEY MAY JUST TAKE IT. SO JUST BE AWARE OF THAT. FOR SOME
BUSINESS, THAT IS AN ISSUE. IT’S NOT A HUGE ISSUE WITH DAYCARES.
BUT IF YOU HAVE A BUSINESS WHERE YOU HAVE A CASH REGISTER, OR YOU
HAVE INVENTORY, AND YOU HAVE EMPLOYEES, YOU DEFINITELY NEED
TO HAVE SOME THINGS IN PLACE TO TRACK AND DETER THEFT.
ESPECIALLY EMPLOYEE THEFT. THAT’S NOT TO SAY YOUR CUSTOMERS
WON’T STEAL FROM YOU. THEY WILL. BUT GENERALLY SPEAKING FOR MOST
BUSINESSES, EMPLOYEES ARE A BIGGER PROBLEM WHEN IT COMES TO
THEFT THAN CUSTOMERS ARE. OKAY, ON THE BOTTOM OF 14, STAFF
POSITIONS OTHER THAN MANAGEMENT. AND I HAVE LIST ALL POSITIONS
OTHER THAN MANAGEMENT INCLUDING TITLE, DESCRIPTION OF SKILL SET
NEEDED FOR POSITION, AND TRAINING STRUCTURE. SO ONE OF
THE THINGS THAT YOU’RE GOING TO WANT TO SAY IS I’M GOING TO HIRE
THESE PEOPLE, THIS IS WHAT THEIR TITLE IS GOING TO BE, THIS IS
WHAT THE SKILL SET THEY’RE GOING TO NEED COMING IN, AND THIS IS
THE ADDITIONAL TRAINING THAT I’M GOING TO PROVIDE. OKAY, PAGE
NUMBER 15. DESCRIBE YOUR BUSINESS LOCATION INCLUDING THE
BUILDING, PHYSICAL FEATURES, AGE, DIMENSION, PARKING LOT,
ETC. DO YOU LEASE OR DO YOU OWN? I KNOW THAT YOU’RE MOST LIKELY
GOING TO BE LEASING ONE OF TWO SPACES. SO YOU WANT TO GO IN AND
ONCE WE KIND OF NARROW THAT DOWN, WE WANT TO SAY THIS IS
WHERE IT’S GOING TO BE LOCATED. THIS IS THE SQUARE FOOTAGE OF
THE BUILDING. THIS IS HOW BIG THE BUILDING IS. THIS IS HOW
MANY ROOMS ARE IN THERE. THIS IS HOW MANY PARKING SPOTS WE HAVE.
THAT TYPE OF THING. SO JUST AN OVERALL DESCRIPTION OF WHERE THE
BUSINESS IS GOING TO BE LOCATED. AND THEN WE HAVE WHY DID YOU
CHOOSE THIS LOCATION? I KNOW THAT THE MAIN DIFFERENCE WAS
THAT ONE LOCATION HAD A BETTER PRICE PER SQUARE FOOT, BUT THE
LOCATION DIDN’T HAVE THE TRAFFIC PATTERN THAT YOU CARED FOR. THE
OTHER PLACE WAS MORE EXPENSIVE BUT IT HAD A BETTER TRAFFIC
COUNT. AND YOU FELT LIKE THE PEOPLE THAT ARE IN AND AROUND
THAT OTHER LOCATION, THE HIGHER PRICE LOCATION, REALLY WAS A
BETTER FIT FOR YOUR TARGET MARKET. SO WE’LL WORK ON THIS AS
WE GET TO IT. BUT IF YOU CHOOSE THE ONE, THE HIGHER PRICE PER
SQUARE FOOT, WE CHOSE THIS LOCATION BECAUSE OF THE TRAFFIC
COUNT, BECAUSE WE FEEL LIKE IT’S CLOSER TO OUR TARGET MARKET,
THOSE TYPES OF THINGS. NOW, ON PAGE NUMBER 16, I KNOW THAT BOTH
PLACES NEED RENOVATIONS. CORRECT? SO ONCE YOU PICK OUT
ONE OF THE LOCATIONS, YOU’RE GOING TO WANT TO HAVE A
CONTRACTOR GO IN. AND MY SUGGESTION WOULD BE HAVE THE
CONTRACTOR GO IN AND GIVE YOU A QUOTE ON EVERYTHING THAT IT’S
GOING TO TAKE. AND THEN I WOULD ALSO TAKE THAT TO TWO PLACES. I
WOULD TAKE IT TO THE CITY THAT THE BUSINESS IS LOCATED IN, GO
TO THEIR PLANNING DEPARTMENT AND SAY I’M GOING TO GO IN AND OPEN
UP A DAYCARE AT THIS LOCATION. THIS IS THE QUOTE FROM MY
CONTRACTOR. YOU CAN PROBABLY GET SOME PLANS AND SAY IS THIS GOING
TO BE OKAY? AM I GOING TO BE IN COMPLIANCE WITH EVERYBODY?
SECOND PLACE THAT YOU’RE GOING TO NEED TO TAKE THAT TO IS THE
MISSISSIPPI DEPARTMENT OF HEALTH, BECAUSE THEY ARE THE
ONES WHO OVERSEE THE LICENSURE FOR DAYCARES. SO, AS YOU GO
THROUGH, YOU DON’T WANT TO GO IN AND DO A BUNCH OF RENOVATIONS
FOR THE DAYCARE, AND YOU GET ALL OF THE RENOVATIONS DONE AND THEN
THE MISSISSIPPI DEPARTMENT OF HEALTH COMES IN AND SAYS YOU’VE
GOT TO DO THIS OR YOU DIDN’T DO THAT. SO IT’S GOING TO TAKE SOME
COORDINATION ON YOUR PART. BUT I WOULD START IT EARLY IN THE
PROCESS. SO WE’LL GET THE QUOTE FOR THE RENOVATIONS BECAUSE WE
NEED TO KNOW HOW MUCH MONEY YOU NEED FOR THAT. AND THEN WE’RE
GOING TO RUN THAT BY THE MISSISSIPPI DEPARTMENT OF HEALTH
AND ALSO THE CITY THAT WOULD ISSUE YOUR BUSINESS LICENSE.
WHAT ARE THE MAJOR ITEMS OF EQUIPMENT USED IN YOUR BUSINESS?
WE NEED TO GO THROUGH AND DO THIS ITEM BY ITEM, GET A COST
FOR EACH ITEM. SO WE NEED TO FIGURE OUT-I KNOW YOU’RE GOING
TO PUT IN A PLAYGROUND. WE NEED TO KNOW HOW MUCH THAT’S GOING TO
RUN. YOU’RE GOING TO HAVE TABLES, CHAIRS, CHANGING TABLES,
BABY BEDS, BOOKSHELVES, YOUR KITCHEN WITH STOVE,
REFRIGERATOR, 3 COMPARTMENT SINK, ALL THAT STUFF. ONE OF MY
QUESTIONS FOR THE HEALTH DEPARTMENT WOULD BE WHEN I GO
GET MY EQUIPMENT FOR MY KITCHEN, WHAT GRADE DOES IT HAVE TO BE?
CAN I JUST GO TO WAL-MART AND BUY THE CHEAPEST STUFF? OR DOES
THIS HAVE TO BE A CERTAIN GRADE? AND THEY CAN TELL YOU THAT AS
FAR AS THE KITCHEN EQUIPMENT FOR THE DAYCARE. BECAUSE YOU DON’T
WANT TO GO BUY A BUNCH OF STUFF AND THEN YOU CAN’T USE IT. SO
THE MORE INFORMATION YOU CAN GET FROM THEM UP FRONT THE BETTER
OFF YOU’RE GOING TO BE. SO WE WANT THAT WITH PRICES. BECAUSE
AT THE END OF THIS WHOLE THING WE WANT TO FIGURE OUT HOW MUCH
MONEY WE NEED TO COME UP WITH. NOW, RESEARCH AND SHOW TRAFFIC
COUNTS ON NEAREST STREETS AND HIGHWAYS. I CAN HELP YOU WITH THAT OR
YOU CAN GO TO MDOT, MISSISSIPPI DEPARTMENT OF TRANSPORTATION. I
THINK IT’S MDOT.ORG. AND ON THE VERY FIRST PAGE OF THEIR WEBSITE
IS A LITTLE TRAFFIC MAP. AND YOU CAN CLICK ON THAT AND YOU CAN
SCROLL AROUND AND IT WILL SHOW YOU THE TRAFFIC COUNTS IN AND
AROUND THE AREA FOR THE BUSINESS LOCATION THAT YOU SELECT. IF YOU
WANT ME TO HELP YOU WITH THAT WE CAN DO THAT. IT DOESN’T TAKE
VERY LONG. BUT WE CAN GET THAT TRAFFIC COUNT IN AND AROUND YOUR
AREA. WHAT OTHER BUSINESSES ARE IN THE AREA THAT MAY HAVE AN AFFECT
ON YOUR BUSINESS? AND THAT CAN BE POSITIVE OR NEGATIVE. I KNOW
THAT THIS DAYCARE, ONE OF THE LOCATIONS, THE ONE THAT’S MORE
EXPENSIVE, IS FAIRLY CLOSE TO A MAJOR HOSPITAL. AND THAT OF
COURSE WOULD HAVE A POSITIVE IMPACT ON YOUR BUSINESS BECAUSE
YOU HAVE ALL THE PEOPLE THAT WORK IN THE HOSPITALS THAT HAVE
KIDS. THEY HAVE INDICATED THAT IF THERE WAS A GOOD DAYCARE IN
THE AREA THEN THAT’S SOMETHING THEY WOULD UTILIZE. WE WANT TO
TALK ABOUT, OKAY, THERE’S THIS MAJOR HOSPITAL IN THE AREA, THIS
IS HOW MANY EMPLOYEES THEY HAVE, THESE ARE THE SHIFTS THEY COME
OUT OF THE HOSPITAL, THAT TYPE OF THING. AND ANY OTHER
BUSINESSES IN THE AREA THAT WOULD HAVE AN AFFECT ON YOUR
BUSINESS. WHOLESALERS ON PAGE NUMBER 17, WE HAVE FOR
WHOLESALERS, MANUFACTURERS, AND OTHER BUSINESSES. WELL WE’RE NOT
WHOLESALERS, WE’RE NOT MANUFACTURING, SO WE CAN PUT N/A
ON THAT. THAT’S REALLY NOT APPLICABLE. YOU DON’T NEED TO
WORK ON THAT WITH YOUR BUSINESS PLAN. NOW DO YOU HAVE EASY
ACCESS TO MAJOR HIGHWAYS, RAILROADS, AND AIRPORTS? THAT’S
PROBABLY NOT NECESSARY EITHER. SO THAT’S PROBABLY ANOTHER N/A
QUESTION, NOT APPLICABLE. NOW IN THE MIDDLE OF PAGE 17, WE HAVE
LONG TERM PLANS AND CONTINGENCY PLANS. AND THIS KIND OF GETS
BACK TO SQUARE ONE WHEN WE’RE THINKING ABOUT LONG RANGE
PLANNING. WE GET THIS THING PUT TOGETHER, WE WANT TO DO A LITTLE
BIT OF ADDITIONAL HOMEWORK ON THIS TO MAKE SURE WE GET
EVERYTHING SET UP RIGHT TO BEGIN WITH. SO I HAVE QUESTION NUMBER
1, DESCRIBE THE LONG TERM PLANS FOR THE BUSINESS. SELL THE
BUSINESS? PASS THE BUSINESS TO FAMILY MEMBERS? OR POSSIBLY
LIQUIDATE THE BUSINESS? SO YOU HAVE TO THINK, IF I START THIS
BUSINESS AND SOMETHING HAPPENS TO ME, WHAT HAPPENS TO THE
BUSINESS? IF THE BUSINESS CANNOT OPERATE WITHOUT YOU THEN WE NEED
TO APPROACH IT ONE WAY. IF IT CAN OPERATE WITH YOU MAY WANT TO
PASS IT ON TO A FAMILY MEMBER. OR YOUR GOAL MAY BE TO GET THIS
UP AND GOING AND RUN IT FOR FIVE YEARS AND SELL IT FOR A PROFIT.
SO THINK ABOUT YOUR LONG TERM PLANS. WHAT DO YOU WANT TO DO
MANY YEARS DOWN THE ROAD? SECOND THING, DESCRIBE THE PROCESS THAT
WILL BE USED TO PRESERVE AND PROTECT IMPORTANT DOCUMENTS.
ACCOUNTING, EMPLOYEE RECORDS, CLIENT RECORDS, LEASE
AGREEMENTS, TAX RETURNS, ETC. IN THE EVENT OF A NATURAL DISASTER,
FIRE, THEFT, ETC. SO WE KIND OF WANT TO HAVE A BACKUP PLAN. NOW
YOU CAN TAKE ALL OF THOSE DOCUMENTS AND YOU CAN SAVE IT UP
IN THE CLOUD. THERE’S DIFFERENT ORGANIZATIONS THAT DO THAT. ONE
OF THE THINGS THAT’S GREAT ABOUT TECHNOLOGY IS WHEN YOU HAVE
PRINTER, SCANNER, COPIER COMBO. SO MY SUGGESTION WOULD BE TO
TAKE ALL OF THOSE IMPORTANT DOCUMENTS, RUN THEM THROUGH THE
SCANNER, SAVE THEM ON THE HARD DRIVE, AND I WOULD ALSO SAVE
THEM ON A JUMP DRIVE. SO THAT WAY YOU’VE GOT IT IN A COUPLE OF
DIFFERENT LOCATIONS, SO IF SOMETHING HAPPENS WE HAVE ALL OF
THAT INFORMATION SAVED AND STORED IN A SAFE PLACE. A NUMBER
OF US LEARNED AN IMPORTANT AND VALUABLE LESSON DURING HURRICANE
KATRINA WHICH WAS, OKAY, I’VE GOT ALL MY STUFF AND THEN I CAME
BACK AND MY STUFF WAS NO WHERE TO BE FOUND. IT ALL GOT FLOODED
OUT. JUST A LITTLE THING THAT I WOULD DO TO PRESERVE THOSE
IMPORTANT DOCUMENTS. NOW, THIRD PART OF LONG TERM PLANS AND
CONTINGENCY PLANS IS TO LIST CONTINGENCY PLANS IF THE OWNER
OR OWNERS BECOME UNABLE OR UNWILLING TO CONTINUE WITH THE
BUSINESS. SO ONE OF THE THINGS WE NEED TO LOOK AT WOULD BE
SOMETHING LIKE KEY MAN INSURANCE OR DISABILITY INSURANCE. IF
SOMETHING HAPPENS TO YOU AND YOU’RE NO LONGER ABLE TO
FUNCTION, THERE MAY BE SOME LONG TERM NOTES OR DEBTS THAT COME
ALONG WITH THIS BUSINESS. AND IF THAT HAPPENS AND SOMETHING
HAPPENS TO THE BUSINESS, THEN WE NEED AN INSURANCE PLAN TO KICK
IN AND PAY FOR THAT, TAKE CARE OF THAT DEBT. IT’S SIMILAR TO
WHEN YOU GET HEALTH INSURANCE FOR YOURSELF, IF SOMETHING
HAPPENS TO YOU, YOU DON’T WANT SOMETHING BAD TO HAPPEN TO THE
FAMILY BECAUSE OF LOSS OF INCOME. SO YOU ALMOST THINK OF
THE BUSINESS AS ITS OWN ENTITY AND IT MAY NEED ITS OWN SEPARATE
INSURANCE POLICY TO KICK IN IN THE EVENT THAT SOMETHING
UNFORTUNATE HAPPENS. OTHER THINGS WE WERE LOOKING AT MIGHT
BE BUYOUT CLAUSE FOR PARTNER OR PARTNERS. SO YOU’VE TOLD ME YOU
THINK YOU’RE GOING TO DO A SINGLE MEMBER LLC. YOU’RE NOT
GOING TO HAVE A PARTNER, BUT IF YOU DID HAVE A PARTNER ONE OF
THE THINGS WE WOULD WANT TO DO WOULD BE TO PUT TOGETHER SOME
TYPE OF OPERATING AGREEMENT THAT SPELLED OUT THIS IS WHO OWNS
WHAT IN THE BUSINESS, AND IN THE EVENT THAT ONE OF THE PARTNERS
WANTS OUT, THIS IS HOW THE BUSINESS WOULD BE VALUED AND
THIS IS HOW THAT WILL OCCUR. SO THAT’S KIND OF LONG TERM PLANS
AND CONTINGENCY PLANS. A LOT OF TIMES, THE PEOPLE THAT CAN HELP
YOU WITH THIS WOULD BE YOUR ACCOUNTANT, YOUR ATTORNEY, OR
SOMEBODY THAT DOES ESTATE PLANNING FOR YOU. AND A LOT OF
TIMES YOU GET WITH ALL THREE OF THEM AND SAY THIS IS WHAT WE’RE
GOING TO BE DOING. HOW DO WE GET ALL OF THIS TOGETHER AND WHAT DO
WE NEED? BUT YOU’RE BETTER OFF TO THINK ABOUT IT AND PLAN IT
OUT IN THE BEGINNING THAN DOWN THE ROAD WHEN SOMETHING BAD
HAPPENS. SO TURN THE PAGE, NOW WE’RE ON PAGE NUMBER 18,
COMMUNITY BENEFITS. HOW WILL THIS BUSINESS BENEFIT THE
COMMUNITY? EXAMPLES INCLUDE THE NUMBER OF EMPLOYEES TO BE HIRED,
PROVIDING A SERVICE THAT IS NOT AVAILABLE IN THE COMMUNITY, AND
TAX REVENUES. SO, ONE OF THE THINGS I WOULD TALK ABOUT WHEN
YOU’RE DESCRIBING THE COMMUNITY BENEFITS IS HOW MANY JOBS YOU’RE
GOING TO CREATE, AND ALSO THIS IS A NEEDED SERVICE IN YOUR
PARTICULAR AREA. I KNOW WE’VE DONE SOME RESEARCH. THERE’S NOT
A LOT OF QUALITY DAYCARES IN THE AREA. SO WE’RE CERTAINLY GOING
TO MENTION THAT. AND THEN ALSO MENTION TAX REVENUES THAT WILL
BE GENERATED BY THIS BUSINESS BEING STARTED. IN ADDITION TO
THAT YOU MIGHT TALK ABOUT THE-JUST FROM A CARE AND
EDUCATION POINT OF VIEW. IT’S NEEDED. WE’RE GOING TO PROVIDE
QUALITY. WHAT I MEAN IS IN ADDITION TO CREATING JOBS AND
PROVIDING TAXABLE REVENUE TO THE FEDERAL GOVERNMENT AND THE STATE
OF MISSISSIPPI, YOU’RE ALSO GOING TO BE PROVIDING A NEEDED
SERVICE IN THE AREA WHICH IS QUALITY CHILD CARE THAT HAS A
GOOD FOUNDATION IN EDUCATION. SO WE WANT TO DESCRIBE THAT. THE
LAST PORTION OF THE BUSINESS PLAN THAT WE NEED TO COVER IS
WE’RE WRITING THIS BUSINESS TO MAKE YOU THINK ABOUT EVERYTHING
THAT YOU NEED TO THINK ABOUT IN THE PROCESS OF STARTING AND
RUNNING THIS BUSINESS. NOW THE LAST PORTION IS FINANCIAL
REQUIREMENTS. THAT’S WHERE WE TELL THE LENDER THIS IS EXACTLY
HOW MUCH MONEY WE WANT TO BORROW. HOW MUCH ARE YOU GOING
TO BORROW? FOR HOW LONG DO YOU WANT TO BORROW THE MONEY? AND
GENERALLY THE LENDER WILL TELL YOU THAT. YOU DON’T GO IN AND
TELL THE LENDER WE WANT TO BORROW X AMOUNT OF MONEY FOR 30
YEARS. THE LENDER WILL SAY BASED ON WHAT YOU’RE USING THIS MONEY
FOR AND THE TYPE OF LOANS WE CURRENTLY HAVE IN PLACE, YOU’RE
GOING TO FALL UNDER THIS LOAN. AND RIGHT NOW THAT LOAN
AMORTIZED OVER ABOUT 10 YEARS OR 7 YEARS OR WHATEVER IT IS. ONCE
WE FIGURE OUT HOW MUCH MONEY YOU’RE GOING TO BORROW, HOW LONG
YOU’RE GOING TO BORROW THE MONEY FOR, AND WHAT THE INTEREST RATE
IS, WE CAN FIGURE OUT WHAT YOUR MONTHLY PAYMENT IS. AND THEN
FINALLY WE NEED TO LIST WHAT DO YOU INTEND TO DO WITH THE MONEY?
AND THAT’S ONE OF THE THINGS THAT THE LENDER WANTS. AND WE’RE
GOING TO TALK ABOUT THAT A LITTLE BIT LATER ON. SO THAT’S
IT. SO AGAIN, JUST TO COVER THIS AGAIN. WE HAVE A SAMPLE BUSINESS
PLAN. ALL OF THE MAJOR HEADINGS ARE IN BOLD AND UNDERLINED. AND
WHAT WE’RE GOING TO DO IS THIS GIVES YOU THE SAMPLE TO GO BY,
AND THEN WE HAVE A BUSINESS PLAN DRAFT WHERE IT’S BASICALLY A
FILL-IN-THE-BLANK. BUNCH OF QUESTIONS FOR YOU TO GO IN,
ANSWER, DO SOME RESEARCH ON. GO THROUGH ANSWER ALL OF THOSE. AND
THEN YOU HAVE PLENTY OF INFORMATION TO OPEN UP WORD.
TYPE UP YOUR BUSINESS PLAN IN WORD. EMAIL IT TO ME. I WILL
EDIT AND REVIEW IT. AND THEN ONVE WE DO THAT WE’LL GET BACK
TOGETHER AND WE WILL START TO WORK ON YOUR CASH FLOW
PROJECTIONS. SO ANY QUESTIONS? OKAY, THAT’S ALL I’VE GOT. THANK
YOU.

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