Monthly Archives: July 2016

The Best Business Plan for Your New Venture

A well-conceived business plan does much more than merely describe what will become your business. Your business plan must first and foremost portray you as a competent and trustworthy professional and furthermore sell your entrepreneurial concept.

Along with a description of the products or services you’ll offer, your plan will also describe a promising business model, the marketplace in which you’ll compete, reasonable estimates of start-up and monthly operating expenses and when the business can be expected to turn a profit. If outside funding is required, then the plan must convince lenders or investors that you are prepared and qualified to build a significantly profitable enterprise. A good business plan will do the following:

  • Describe the products and services
  • Identify target customers
  • Identify and evaluate major competitors
  • Describe the business environment
  • Present a profitable business model
  • Detail the marketing plan
  • Detail the operations plan
  • Detail the financial projections
  • Present the qualifications of the management team
  • Provide an exit strategy

Here are business plan options for three scenarios:

The Executive Summary

An expanded Executive Summary can serve as a useful business plan, in particular for those who will launch a venture that will have modest start-up costs and operating expenses. A detailed Executive Summary can provide a good road map from which to launch a business venture, yet it is not a business plan option for those who will approach lending institutions or investors.

The expanded Executive Summary will include a description of products and services that will be sold, identify primary client groups and competitors and give an overview of the business environment. The business model, marketing plan, operations plan and financial data will also be provided. To be useful, the Executive Summary business plan must fully integrate the above components and demonstrate how the business will become profitable.

The Operational Business Plan

An Operational Business Plan is produced by an existing organization with several years’ performance history, usually with a goal to either apply for expansion capital or prepare for the sale of the company. Operational Business Plans may also be used to upgrade and streamline how a business runs, functioning as a guide for the management team.

The Operational Business Plan delves into great detail about production, customers, competitors, the marketplace and business environment, sales distribution channels, management and staffing. Historical data are available and five years of financial statements are typically included, along with financial projections that forecast the company’s expected performance over the next three years.

The business plan to attract investors

When outside investment is sought, it goes without saying that the potential for strong profits must be demonstrated. The more money that is requested, the bigger the promised profits must be and the more quickly realized. A break-even analysis, which shows the timeline for when revenues and operating expenses will equalize and the business will be positioned to earn a profit, along with credible financial assumptions and revenue projections, are critical in this scenario.

If the business is an existing one, the financial projections must appear to be attainable, based on the five-year financial history given. Make sure that your business and personal credit scores are 700+, as lending institutions are highly selective and conservative in regards to awarding loans.

Venture capitalists and angel investors may be somewhat more forgiving of a less than perfect credit rating if your business concept and model are extraordinary. Beta test the products/services, business model and operations with a sampling of target customers to verify product demand and your ability to efficiently deliver the goods to the marketplace.

For VCs, the potential for big profits is king. They are in it for the pot of gold that comes when the company goes public and stock is offered. Angels are not totally dissimilar to VCs, but they are drawn to an entrepreneur’s vision and passion in addition to the pay-off.

Regardless of the type of business that you choose to launch and whether you will self-finance or seek funding from others, a well-written business plan will ensure that you think critically about your ability to build a business, either alone or with partners. Your business plan is the road map to entrepreneurial success.

Thanks for reading,

Kim

The Basics of Business Litigation

Owning your company and being your own boss involves a great deal of responsibility. Being a successful business owner also means understanding the basics of business litigation and being prepared for potential legal issues should they arise. Although no company goes out looking for legal problems, these issues can impact virtually any business, and preparation is essential to avoiding long term damages.

Just as a litigation process exists for consumers, a process also exists for customers. Professional litigation addresses the problems and challenges unique to the business world. Having a handle on its fundamental lessons can help any business run more efficiently and can help any business owner determine when the appropriate time is to hire a professional. With an understanding of business litigation 101; as a small business owner you can help keep your company protected from potential legal issues and be prepared to hire a professional, when necessary for legal advice.

Understanding the Basics – What It Is and What it Isn’t

Simply put, business litigation involves resolving disputes as they relate to a company. According to the National Bar Association, business litigation is defined as the practice of law in dealing with legal issues related to problems that arise from business and commercial relationships. When these issues arise, most business owners will need to hire a professional attorney to assist with these legal matters. Typically, a business litigation attorney will evaluate, handle and resolve these issues before federal and state courts.

Typically, this type of litigation can mean dealing with issues between two companies or between new and old partners within the same organization. This type of litigation is not involved in disputes between a consumer or client and a company, though a reputable and well rounded attorney practice can easily handle that aspect of business law as well.

As a business owner, you know that your success highly depends on the business relationships you maintain. Dealing with ugly disputes or contract issues can tarnish the quality reputation you have built for your company, and result in significant losses. This is why being prepared and understanding these legal matters is so important.

Common Business Litigation Disputes

Preparing for business litigation issues before they happen is the best way to help protect your company from significant legal issues or damages. Here are some of the common types of business litigation disputes that impact small business owners today:

- Franchise Issues- When establishing new franchisees, brokering agreements, etc., many times a business litigation professional will be called in to handle the entire process on behalf of the business owner.

- Shareholder and Partner Disputes- Business owners who are facing potentially damaging repercussions from shareholder or partnership disputes, can call a professional to develop an offensive strategy to handle these disagreements.

- Fraud Litigation- This involves a single party knowingly lying in their contract in an effort to entice a partner or other company into a misleading deal or agreement.

- Insurance Litigation- Legal experts can help company owners with disputes over coverage between the insured and the insurers.

- Company Purchases- This includes the sale or transfer of ownership of a business.

- Breach of Contract- Business owners can get the protection they need when a party does not adhere to the conditions put forth in their contract.

The good news for small business owners is the average business litigation attorney will be well-versed in handling these types of issues and can help business owners handle these disputes with ease.

Being Prepared for Potential Litigation Issues

Discussing sensitive legal matters such as this can, understandably, make some owners a bit uncomfortable. No one relishes the idea of being in court, or having to escalate a professional dispute to that level. However, understanding the basics can be instrumental in helping any business owner avoid court and legal drama all together.

Take the time to learn about what aspects of litigation your company may be vulnerable to, and what type of common disputes tend to impact other business owners. If you’re considering expanding or growing your business in any way, then business litigation can come into play. Talking to a lawyer who understands these special challenges and situations can help arm you with the knowledge you need while putting your mind at ease.