The Business Plan

I am the Business Counselor in the Little Tokyo community. However, I have colleagues in the Chinese, Korean, Thai and Filipino communities. This month, I would like to share an article about Business Plans written by my counterpart at KYCC (Korean Youth and Community Center).


THE BUSINESS PLAN
Starting and managing a business takes motivation, passion and talent. It also takes research and planning. Like a chess game, success in small business starts with decisive and correct opening moves.
To increase your chance for success, take the time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and well-thought-out business plan that will help you reach these goals.

The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.

Writing A Business Plan
After you’ve given some careful consideration to the business, you’re ready to begin putting ideas on paper. That means preparing a business plan – a formal document explaining in some detail your plans to develop a financially successful business. If you think the business plan is just a lot of paperwork, think again. It’s important for two reasons:

• Preparing a business plan forces you to think through every aspect of your business. If you need outside capital, the business plan will be one of the first things the lender or investor wants to see.
• A business plan serves as an assessment tool for the owner. As you work your way through the points of the plan, you will have to reaffirm the viability of your ideas. As you grow your business, a plan will help you keep track of the details and make sure the business is progressing as you intended.


Introduction
• Give a detailed description of the business and its goals.
• Discuss the ownership of the business and the legal structure.
• List the skills and experience you bring to the business.
• Discuss the advantages you and your business have over your competitors.


Marketing
• Discuss the products/services offered.
• Identify the customer demand for your product/service.
• Identify your market, its size and locations.
• Explain how your product/service will be advertised and marketed.
• Explain the pricing strategy.


Financial Management
• Explain your source and the amount of initial equity capital.
• Develop a monthly operating budget for the first year.
• Develop an expected return on investment and monthly cash flow for the first year.
• Provide projected income statements, balance sheets for a two-year period.
• Discuss your break-even point.
• Explain your personal balance sheet and method of compensation.
• Discuss who will maintain your accounting records and how they will be kept.
• Provide “what if” statements that address alternative approaches to any problem that may develop.


Operations
• Explain how the business will be managed on a day-to-day basis.
• Discuss hiring, personnel procedures.
• Discuss insurance, lease or rent agreements and issues pertinent to your business.
• Account for the equipment necessary to produce your products or services.
• Account for production and delivery of products and services.


Summarize your business goals and objectives and express your commitment to the success of your business. Also note that the business plan is not etched in stone. The business plan is a flexible document that should change as your business grows.


CONCLUSION
If you would like more details on the writing of a business plan, please feel free to call or e-mail me to set up an appointment. I also hold six week Entrepreneurial Training Programs twice a year to go over the writing of a business plan. The next series of classes start this Fall.

Joe Araki is the Little Tokyo area Business Counselor for the Little Tokyo Service Center, a Community Development Corporation. He assists business owners in drafting marketing plans, packaging loans, and dealing with government agencies. He puts on seminars regarding tax matters, health department issues and accessing capital. Each month he highlights a particular business, service or business owner in Little Tokyo. Mr. Araki can be reached at 213-473-1658 and jaraki@LTSC.org.