UK

How to Prepare a Business Plan

The follow sections will be required in your business plan:

Introduction to Your Business Plan

 Who are the promoters & what is their previous experience?

Executive Summary

 What is the proposal?

 Who are the personnel?
 When is the proposal launch timed for?
 What finance does the proposal require?

Main Body of Your Business Plan

Management of the Business

 Who will be the directors/principal of the business?

 Who are the owners?
 Who are the senior management?
 What other staff are required?
 Have you considered staff contracts of employment?
 How will the directors/senior management/staff be paid? i.e. salary,
bonuses,commissions, etc.
 What skills and experience will your staff require?
 Will you need to provide ongoing training for your staff?
 Have you considered government incentive schemes for employers?

Management Information

 Will you need periodic accounts or other information

i.e.weekly/monthly/quarterly?
 To what extent will you computerise the operation?
 What personnel will be responsible for providing information?
 How reliable will the figures be?

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  What have the results been to date?
 Have you carried out sensitivity analysis?

Product Details

 Describe your product or service.

 What is the required quality of your product?
 Is there a range of products you wish to provide?
 What differentiates your products from your competitors?
 What is the pricing structure of the product(s)?
 How is this different from your competitors?

Production Process

 Does your product follow a production process?

 What are the worker & machinery requirements?

Image

 Have you considered the use of brands, patents, copyrights?

 What sort of image do you wish to project for your product? i.e. quality
 What image does your competition have?
 Do you have a logo for your product(s)?
 Do you know what business stationery you require and have you arranged to print
this?
 Have you arranged for signs to be made for your business premises?

Business Name

 Have you decided on a name for your business?

 Does this name conflict with another on the business names register?
 If you are trading as a limited company has this been formed?
 Is your chosen company name on the company registration office register
already?

Market Trends & Promotion

 Have you done any market research for your business?

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  What are your target markets?
 Are there any new products coming onto your target market?
 What range of products are currently being provided on your target market?
 Have you considered the use of a marketing consultant?
 How will you present & promote your product on the market?

Customers

 Who will be your main customers?

 What value of business would you anticipate from each of your main customers?
 Who are your contacts for each main customer?
 Who are your potential customers?
 How do you wish to attract new customers?
 Have you considered the use of internet business?

Competition

 What are your main strengths in the market?

 What do you feel gives you a competitive edge?

Terms of Trade

 Do you offer credit and what are your credit limits for your customers?
 What are your credit terms and how many days do customers have to settle your
account?
 Do you have a debt collection policy to control your credit terms?
 Can you accept cash, cheque or credit card payments?
 What payment terms do you have with your suppliers?
 Do you offer discounts?

Suppliers

 What is the quality required of the product supply?

 How reliable are your suppliers?
 How available are your supplies?
 What is the product you need supply of?

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  How will you distribute your product?

Advisors, Finance & Grants

 Who are your advisors i.e. financial, legal, technical & marketing?
 What is your capacity to raise finance?
 Who are the potential investors in your business i.e. banks/credit
unions/government agencies etc?
 Have you appointed an accountant/tax advisor?
 What assets/activities will the finance be used for?
 Have you opened a business bank account and arranged for authorised cheque
signatories?
 What are going to be your main costs?
 What turnover do you require to break even?
 What grant aid is available for your business i.e. for capital expenditure, labour
costs, business development, etc.

Taxation

 Have you considered the taxation framework for your business?

 Have you registered your business for VAT/PAYE/Business Tax?
 Have you considered the legal structure of your business i.e. sole
trader/partnership or limited company?
 Have you considered the accounting system requirements for your business?

Health & Safety, Professional and Industry Standards

 Have you considered the requirements of the health & safety at work legislation?
 Is your business aware of professional or industry standards and is it regulated in
any way?

Premises

 What square footage is required?

 Where do you wish to locate your business?
 What safety standards apply to your business?
 Have you considered government tax incentive schemes that may be available in
certain geographical areas?

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  Are you going to buy or lease the property?
 Have you appointed solicitors?
 Have you arranged for utilities to be connected?
 Have you considered whether to lease or buy your equipment?

Insurance Requirements

 Have you considered the insurance cover for your business i.e. equipment, stock,
premises, employers liability, public liability, loss of profits, etc?

Conclusions

 What are your personal strengths and weaknesses?

 What opportunities are available should you take a certain course of action?
 What are the main threats to your business if you do not take the opportunities
available?
 What contingencies have been provided for?
 On balance what is the case for investment?

Appendices

 List of main assumptions.

 Financial accounts (both historic and projected)
 Cashflow projections
 Sensitivity analysis
 Detail of premises
 Capital expenditure projections
 Staffing projections
 Management structure
 C.V.'s of key staff
 Schedule of grants

Canada
Preparing a Business Plan
• Why Prepare a Plan?

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 • Business Concept
• Financial Plan
• Approaching Lenders
• Attracting Investors

Why Prepare a Plan?

The Business Plan is a written summary of what you hope to accomplish by being in
business and how you intend to organize your resources to meet your goals. It is the
road map for operating your business and measuring progress along the way.

1. The Business Plan identifies the amount of financing

or outside investment required and when it is needed.
2. First impressions are important. A well-organized plan
is essential for a lender or investor to assess your
financing proposal and to assess you as a business
manager.
3. By committing your plans to paper, your overall
ability to manage the business will improve. You will
be able to concentrate your efforts on the deviations
from plan before conditions become critical. You will
also have time to look ahead and avoid problems
before they arise.
4. It encourages realism.
5. It helps you to identify your customers, your market
area, your pricing strategy and the competitive
conditions under which you must operate to succeed.
This process often leads to the discovery of a
competitive advantage or new opportunity as well as
deficiencies in your plan.
6. Three or four hours spent each month updating your
plan will save you time and money in the long run
and may even save your business. Resolve now to
make planning a part of your management style.

Executive Summary

The format should start with an executive summary describing the highlights of the
business plan. Even though your entire business is well described later on, a crisp, one or
two page introduction helps to capture the immediate attention of the potential investor
or lender.

• Company name (include address and phone number)

• Contact person (presenter's name and phone number)
• Paragraph about company (nature of business and market
area)
• Securities offered to investors (preferred shares, common
shares, debentures, etc.)
• Business loans sought (term loan, operating line of credit)
• Highlights of Business Plan (your project, competitive
advantage and "bottom line" in a nutshell--preferably one
page maximum)

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 • This summary page is extremely important in capturing the
reader's attention. Make sure it sells your idea so the reader
will retain interest and continue reading

Table of Contents

• Section titles and page numbers (for easy reference)

Top of Page

Business Concept

The business concept identifies your market potential within your industry and outlines
your action plan for the coming year. Make sure your stated business goals are
compatible with your personal goals, your own management ability and family
considerations.

The heart of the Business Concept is your monthly sales forecast for the coming year. It
is your statement of confidence in your marketing strategy and forms the basis for your
cash flow forecast and projected income statement.

The business concept contains an assessment of business risks and a contingency plan.
We urge you to take the offensive and be your own devil's advocate. Being honest about
your business risks and how you plan to deal with them is evidence of sound
management.

Description of the Industry

• Industry outlook and growth potential (industry trends, new

products and developments. State your sources of
information)
• Markets and customers (size of total market, new
requirements and market trends)
• Competitive companies (market share, strengths and
weaknesses, profitability)
• National and economic trends (population shifts, consumer
trends, relevant economic indicators)

Description of Business Venture

• Product(s) or service (pictures, drawings, characteristics,

quality)
• Product protection/exclusive rights (patents, copyrights,
trade marks, franchise rights)
• Target market (typical customers identified by groups,
present buying patterns and average purchase in dollars,
wants and needs)
• Competitive advantage of your business concept (your
market niche, uniqueness, estimated market share)
• Business location and size (location(s) relative to market,
size of premises)

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 • Staff and equipment needed (overall requirement, capacity)
• Brief history (principals involved, development work done)

Business Goals

• One year (specific goals, such as gross sales, profit margins,

share of market, opening new store, plant or office,
introducing new product, etc.)
• Over the longer term (return on investment, business net
worth, sale of business)

Marketing Plan

• Sales strategy (commissioned sales staff, agents, sales

objectives, target customers, sales tools, sales support)
• Distribution (direct to public, wholesale, retail, multiple
outlets)
• Pricing (costing, mark-ups, margins, break-even)
• Promotion (media advertising, promotions, publicity-
appropriate to reach target market)
• Guarantees (product guarantees, service warranties)
• Tracking methods (method for confirming who your
customers are and how they heard about you)

Sales Forecast

• Assumptions (one never has all the necessary information,

so state all the assumptions made in developing the forecast)
• Monthly forecast for coming year (sales volume in units and
dollars)
• Annual forecast for following 2-4 years (sales volume in
dollars)

Note: The sales forecast is the starting point for your projected income statement and
cash flow forecast in Part II

Production Plan (Manufacturing)

• Brief description of production process (don't be too

technical)
• Physical plant requirements (building, utility requirements,
expansion capability, layout)
• Machinery and equipment (new or used, lease or purchase,
capacity)
• Raw materials (readily available, quality, sources)
• Inventory requirements (seasonal levels, turnover rates,
method of control)
• Suppliers (volume discounts, multiple sources)
• Personnel required (full-time, part-time, skill level,
availability, training required)

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 • Cost of facilities, equipment and materials (estimates and
quotations)
• Capital estimates (one time start-up or expansion capital
required)

Production Plan S(Retail or Service)

• Purchasing plans (volume discounts, multiple sources,

quality, price)
• Inventory system (seasonal variation, turnover rates,
method of control)
• Space requirements (floor and office space, improvement
required, expansion capability)
• Staff and equipment required (personnel by skill level,
fixtures, office equipment)

Corporate Structure

• Legal form (proprietorship, partnership, corporation)

• Share distribution (list of principal shareholders)
• List of contracts and agreements in force (management
contract, shareholder or partnership agreement, franchiser
service agreement, service contract)
• Directors and officers (names and addresses and role in
company)
• Background of key management personnel (brief resumes of
active owners and key employees)
• Contract professionals/consultants (possible outside
assistance in specialized or deficient areas)
• Organization chart (identify reporting relationships)
• Duties and responsibilities of key personnel (brief job
descriptions--who is responsible for what?)

Risk Assessment

• Competitors' reaction (will competitors try to squeeze you

out?)
• What if . . . list of critical external factors (identify effects of
strikes, recession, new technology, weather, new
competition, supplier problems, shifts in consumer demand)
• What if . . . list of critical internal factors (sales off by 30%,
sales double, key manager quits, workers unionize)
• Dealing with risks (contingency plan to handle the most
significant risks)

Action Plan

• Steps to accomplish this year's goals (flow chart by month or

by quarter of specific action to be taken and by whom)
• Checkpoints for measuring results (identify significant dates,
sales levels, production levels as decision points)

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Top of Page

Financial Plan

The financial plan outlines the level of present financing and identifies the financing
sought. This section should be kept concise with supporting material supplied only when
requested.

The Financial Plan contains pro-forma financial forecasts. In carrying out your action plan
for the coming year, these operating forecasts are your guide to business survival and
profitability. Resolve now to refer to them often and, if circumstances dictate, re-work
them as necessary. Before presenting your Business Plan to a lender or investor, review
your financial statements with your accountant. This familiarity will increase your
credibility and at the same time provide you with a good understanding of what the
financial statements reveal about the viability of your business.

Financial Statements

• Previous years' balance sheets and income statements

(include past 2-3 years if applicable)

Financial Forecasts

• Opening balance sheet (for a new business only)

• Projected income statements (detailed operating forecast for
next year of operation and less detailed forecast for following
two years. Use sales forecast as starting point)
• Cash flow forecast (budget of cash inflow and outflow on a
monthly basis for next year of operation)

For further guidance in this area, refer to " Preparing a Cash Flow Forecast".

Financing and Capitalization

• Term loan applied for (amount, term, when required)

• Purpose of term loan (attach detailed description of assets to
be financed with cost quotations)
• Owners' equity (your level of commitment to the program)
• Summary of term loan requirements (for a particular project
or for business as a whole)

Example:

Program Financing
Leasehold Improvements $30,000 Term loan $80,000
Equipment & Machinery 75,000 Owners' equity:
Vehicles 36,000 Founder's investment 48,000
Start-up expenses 12,000
$153,000 $153,000

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*If the purpose of the Business Plan is to attract a new investor, further details would be
given here concerning share participation, role in company, etc.

Operating Loan

• Line of credit applied for (new or increase, security offered)

• Maximum operating cash requirement (amount, timing--refer
to cash flow forecast)

Present Financing (If Applicable)

• Term loans outstanding (balance owing, repayment terms,

purpose, security held)
• Current operating line of credit (amount, security held)

References

• Name of present lending institution (branch, type of

accounts)
• Lawyer's name (include address and phone number)
• Accountant's name (include address and phone number)

Appendix

The following documents may be requested by your banker or potential investor.

• Personal net worth statement (including personal property

values, investments, cash, bank loans, charge accounts,
mortgages, other liabilities. This will substantiate the value of
your personal guarantee if required for security.)
• Letters of intent (potential orders, customer commitments,
letters of support)
• List of inventory (type, age, value)
• List of leasehold improvements (description, when made)
• List of fixed assets (description, age, serial numbers)
• Price lists (to support cost estimates)
• Description of insurance coverage (insurance policies,
amount of coverage)
• Accounts receivable summary (include aging schedule)
• Accounts payable summary (include schedule of payments)
• Copies of legal agreements (contracts, lease, franchise
agreement, mortgage, debenture)
• Appraisals (property, equipment)
• Financial statements for associated companies (where
appropriate)

Finally...

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Preparing a business plan will generate a lot of thought and a lot of paper! Keep in mind,
however, that the final document is a summary of your planning process. You can always
refer to your working papers later on to substantiate a particular point.

Have your key employees and two or three impartial outsiders review the finished plan in
detail. There may be something you overlooked or underemphasized. Also a critical
review will be good preparation for your presentation to potential investors and lenders.

Top of Page

Approaching Lenders

When approaching any financial institution, you are effectively selling the merits of your
business proposal. As in all sales, consider the needs of the other party.

• Ability to service the debt with sufficient surplus to cover

contingencies (carry interest charges, eventually repay in
full--cash flow forecast and projected income statement will
show this)
• Track record/integrity (personal credit history, management
ability as demonstrated in your Business Plan, company
results)
• Your level of commitment (your equity in the business or
cash investment in the particular asset being purchased)
• Secondary source of repayment (this includes security in the
event of default and other sources of income--discuss this
subject with your lawyer before submitting your proposal)
• Lead time (lender needs a reasonable time to assess your
proposal--also, the loan may have to be referred to another
level within the financial institution)
• Don't overdo it (be sensible with the amount of
documentation you provide initially--for example, the
Introductory Page, Summary and Financial Plan sections
provide a good basic loan submission if the amount
requested is small)

Top of Page

Attracting Investors

Start first by approaching people you know, i.e. friends, bank, credit union or trust
company manager, lawyer, accountant, doctor. They, in turn, may know of possible
investors. If your business concept exhibits high growth potential, a second alternative is
to approach a venture capital company. Either way, take a moment to consider the
investor's needs which may differ from a lender's needs.

• Your level of commitment (to be sure that you are sharing

the risk)
• Share participation (investors may demand more equity than
you are willing to give)

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 • Rate of return (investors are willing to take a high risk but
expect a high rate of return, i.e. to double their money in 2-3
years)
• Involvement in key decisions (possibly as a Director or even
an Officer of the company)
• Regular financial reporting (investors usually want to see
tight financial controls in place and prompt financial
reporting)

For further information on writing and creating a business plan, visit our S Interactive
Business Planner (IBP).

Top of Page

It is always said "If you Fail to Plan, you Plan to Fail"

Success in business comes as a result of planning. You have to have a detailed, written
plan that shows what the ultimate goal is, the reason for the goal, and each milestone that
must be passed in order to reach your goal.

A business plan is written definition of, and operational plan for achieving your goal. You
need a complete but success tool in order to define your basic product, income objectives
and specific operating procedures. YOU HAVE TO HAVE A BUSINESS PLAN to attract
investors, obtain financing and hold onto the confidence of your creditors, particularly in
times of cash flow shortages--in this instance, the amount of money you have on hand
compared with the expenses that must be met.

Aside from an overall directional policy for the production, sales effort and profit goals of
your product--your basic "travel guide" to business success--the most important purpose
your business plan will serve, will be the basis or foundation of any financial proposals
you submit. Many entrepreneurs are under the mistaken impression that a business plan is
the same as a financial proposal, or that a financial proposal constitutes a business plan.
This is just a misunderstanding of the uses of these two separate and different business
success aids.

The business plan is a long range "map" to guide your business to the goal you've set for
it. The plan details the what, why, where, how and when, of your business--the success
planning of your company.

Your financial proposal is a request for money based upon your business plan--your
business history and objectives.

Understand the differences. They are closely related, but they are not interchangeable.

Writing and putting together a "winning" business plan takes study, research and time, so
don't try to do it all in just one or two days.

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The easiest way to start with a loose leaf notebook, plenty of paper, pencils, pencil
sharpener, and several erasers. Once you get your mind "in gear" and begin thinking
about your business plan, "10,000 thoughts and ideas per minute" will begin racing thru
your mind...So, it's a good idea when you aren't actually working on your business plan,
to carry a pocket notebook and jot down those business ideas as they come to you--ideas
for sales promotion, recruiting distributors, and any other thoughts on how to operate
and/or build your business.

Later, when you're actually working on your business plan, you can take out this "idea
notebook" evaluate your ideas, rework them, refine them, and integrate them into the
overall "big picture" of your business plan.

The best business plans for even the smallest businesses run 25 to 30 pages or more, so
you'll need to "title" each page and arrange the different aspects of your business plan
into "chapters." The format should pretty much run as follows:

Title Page Statement of Purpose Table of Contents Business Description Market Analysis
Competition Business Location Management Current Financial Records Explanation of
Plans For Growth Projected Profit & Loss/Operating Figures Explanation of Financing
for Growth Documentation Summary of Business & Outlook for The Future Listing of
Business & personal References

This is a logical organization of the information every business plan should cover. I'll
explain each of these chapters titles in greater detail, but first, let me elaborate upon the
reasons for proper organization of your business plan.

Having a set of "questions to answer" about your business forces you to take an objective
and critical look at your ideas. Putting it all down on paper allows you to change, erase
and refine everything to function in the manner of a smoothly oiled machine. You'll be
able to spot weakness and strengthen them before they develop into major problems.
Overall, you'll be developing an operating manual for your business--a valuable tool
which will keep your business on track, and guide you in the profitable management of
your business.

Because it's your idea, and your business, it's very important that YOU do the planning.
This is YOUR business plan, so YOU develop it, and put it all down on paper just the
way YOU want it to read. Seek out the advice of other people; talk with, listen to, and
observe, other people running similar businesses; enlist the advice of your accountant and
attorney--but at the bottom line, don't ever forget it has to be YOUR BUSINESS PLAN!

Remember too, that statistics show the greatest causes of business failure to be poor
management and lack of planning--without a plan by which to operate, no one can
manage; and without a direction in which to aim its efforts, no business can attain any
real success.

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On the very first page, which is the title page, put down the name of your business-ABC
ACTION--with your business address underneath. Now, skip a couple of lines, and write
it all in capital letters: PRINCIPAL OWNER--followed by your name if you're the
principal owner. On your finished report, you would want to center this information on
the page, with the words "principal owner" off-set to the left about five spaces.

Examples: ABC ACTION 1234 SW 5th Ave. Anywhere, USA 00000

PRINCIPAL OWNER: Your Name

That's all you'll have on this page except the page number -1-

Following your title page is the page for your statement purpose. This should be a simple
statement of your primary business function, such as: We are a service business engaged
in the business of selling business success manuals and other information by mail.

The title of the page should be in all capital letters across the top of the page, centered on
your final draft--skip a few lines and write the statement of purpose. This should be
direct, clear and short--never more than (2) sentences in length.

Then you should skip a few lines, and from the left hand margin of the paper, write out a
sub-heading in all capital letters, such as: EXPLANATION OF PURPOSE.

From, and within this sub-heading you can briefly explain your statement of purpose,
such as: Our surveys have found most entrepreneurs to be "sadly" lacking in basic
information that will enable them to achieve success. This market is estimated at more
than a 100 million persons, with at least half of these people actively "searching" for
sources that provide the kind of information they want, and need.

With our business, advertising and publishing experience, it is our goal to capture at least
half of this market of information seekers, with our publication. MONEY MAKING
MAGIC! Our market research indicates we can achieve this goal and realize a profit of
$1,000,000 per year within the next 5 years...

The above example is generally the way you should write your "explanation of purpose,"
and in subtle definition, why you need an explanation. Point to remember: Keep it short.
Very few business purpose explanations justify more than a half page long.

Next comes your table of contents page. Don't really worry about this until you've got the
entire plan completed and ready for final typing. It's a good idea though, to list the
subject (chapter titles) as I have, and then check off each one as you complete that part of
your plan.

By having a list of the points you want to cover, you'll also be able to skip around and
work on each phase of your business plan as an idea or the interest in organizing that
particular phase, stimulates you. In other words, you won't have to make your thinking or

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your planning conform to the chronological order of the "chapters" of your business
plan--another reason for the loose leaf notebook.

In describing your business, it's best to begin where your statement purpose leaves off.
Describe your product, the production process, who has responsibility for what, and most
importantly, what makes your product or service unique--what gives it an edge in your
market. You can briefly summarize your business beginnings, present position and
potential for future success, as well.

Next, describe the buyers you're trying to reach--why they need and want or will buy
your product--and the results of any tests or surveys you may have conducted. Once
you've defined your market, go on to explain how you intend to reach that market--how
you'll these prospects to your product or service and induce them to buy. You might want
to break this chapter down into sections such as..publicity and promotions, advertising
plans, direct sales force, and dealer/distributor programs. Each section would then be an
outline of your plans and policies.

Moving into the next chapter on competition, identify who your competitors are--their
weakness and strong points--explain how you intend to capitalize on those weaknesses
and match or better the strong points. Talk to as many of your "indirect" competitors as
possible--those operating in different cities and states.

One of the easiest ways of gathering a lot of useful information about your competitors is
by developing a series of survey questions and sending these questionnaires out to each
of them. Later on, you might want to compile the answers to these questionnaires into
some form of directory or report on this type of business.

It's also advisable to contact the trade associations and publications serving your
proposed type of business. For information on trade associations and specific trade
publications, visit your public library, and after explaining what you want ask for the
librarian's help.

The chapter on management should be an elaboration on the people operating the

business. Those people that actually run the business, their job, titles, duties,
responsibilities and background resume's. It's important that you "paint" a strong picture
of your top management people because the people coming to work for you or investing
in your business, will be "investing in these people" as much as your product ideas.
Individual tenacity, mature judgement under fire, and innovative problem-solving have
"won over" more people than all the AAA Credit Ratings and astronomical sales figures
put together.

People becoming involved with any new venture want to know that the person in charge--
the guy running the business knows what he's doing, will not lose his cool when
problems arise, and has what it takes to make money for all of them> After showing the
"muscle" of this person, go on to outline the other key positions within your business;

16
who the persons are you've selected to handle those jobs and the sources as well as
availability of any help you might need.

If you've been in business of any kind scale, the next chapter is a picture of your financial
status--a review of your operating costs and income from the business to date. Generally,
this is a listing of your profit & loss statements for the six months, plus copies of your
business income tax records for each of the previous three years the business has been an
entity.

The chapter on the explanation of your plans for the future growth of your business is just
that--an explanation of how you plan to keep your business growing--a detailed guide of
what you're going to do, and how you're going to increase your profits. These plans
should show your goals for the coming year, two years, and three years. By breaking your
objectives down into annual milestones, your plan will be accepted as more realistic and
be more understandable as a part of your ultimate success.

Following this explanation, you'll need to itemize the projected cost and income figures
of your three year plan. I'll take a lot of research, an undoubtedly a good deal of erasing,
but it's very important that you list these figures based upon thorough investigation. You
may have to adjust some of your plans downward, but once you've got these two chapters
on paper, your whole business plan will fall into line and begin to make sense. You'll have
a precise "map" of where you're headed, how much it's going to cost, when you can
expect to start making money, and how much.

Now that you know where you're going, how much it's going to cost and how long it's
going to be before you begin to recoup your investment, you're ready to talk about how
and where you're going to get the money to finance your journey. Unless you're
independently wealthy, you'll want to use this chapter to list the possibilities and
alternatives. Make a list of friends you can approach, and perhaps induce to put up some
money as silent partners. Make a list of those people you might be able to sell as
stockholders in your company--in many cases you can sell up to $300,000 worth of stock
on a "private issue" basis without filing papers with the Securities and Exchange
Commission. Check with a corporate or tax attorney in your area for more details. Make
a list of relatives and friends that might help you with an outright loan to furnish money
for the development of your business.

Then search out and make a list of venture capital organizations. Visit the Small Business
Administration office in your area--pick up the loan application papers they have--read
them, study them, and even fill them out on a preliminary basis--and finally, check the
costs, determine which business publications would be best to advertise in, if you were to
advertise for a partner or investor, and write an ad you'd want to use if you did decide to
advertise for monetary help.

With listing of all the options available to your needs, all that's left is the arranging of
these options in the order you would want to use them when the time come to ask for
money. When you're researching these money sources, you'll save time by noting the

17
"contact" deal with when you want money, and whenever possible, by developing a
working relationship with these people.

If your documentation section, you should have a credit report on yourself. Use the
Yellow Pages or check at the credit department in your bank for the nearest credit
reporting office. When you get your credit report, look it over and take whatever steps are
necessary to eliminate any negative comments. Once these have been taken care of, ask
for a revised copy of your report and include a copy of that in your business plan.

If you own any patents or copyrights, include copies of these. Any licenses to use
someone else's patent or copyright should also be included. If you own the distribution,
wholesale or exclusive sales rights to a product, include copies of this documentation.
You should also include copies of any leases, special agreements or other legal papers
that might be pertinent to your business.

In conclusion, write out a brief, overall summary of your business- when the business
was started, the purpose of the business, what makes your business different, how you're
going to gain a profitable share of the market, and your expected success during the
coming 5 years..

The last page of your business plan is a "courtesy page" listing the names, addresses and
phone numbers of personal and business references--persons who have known you
closely for the past five years or longer--and companies or firms you've had business or
credit dealings with during the past five years.

And, that's it--your complete business plan. Before you send it out for formal typing, read
it over once a day for a week or ten days. Take care of any changes or corrections, and
then have it reviewed by an attorney and then, an accountant. It would also be a good
idea to have it reviewed by a business consultant serving the business community to
which your business will be related. After these reviews, and any last-minute changes you
want to make, I'll be ready for formal typing.

Type and print the entire plan on ordinary white bond paper. Make sure you proof-read it
against the original. Check for any corrections and typographical errors--then one more
time--read it through for clarity and the perfection you want of it.

Now you're ready to have it printed and published for whatever use you have planned for
it--distribution amongst your partners or stockholders as the business plan for putting
together a winning financial proposal, or as a business operating manual.

Take it to a quality printer in your area, and have three copies printed. Don't settle for
photo-copying..Have it printed!

Photo-copying leaves a slight film on the paper, and will detract from the overall
professionalism of your business plan, when presented to someone you're trying to

18
impress. So, after going to all this work to put together properly, go all the way and have
it duplicated properly.

Next, stop by a stationery store, variety store or even a dime store, and pick up an
ordinary, inexpensive bind-in theme cover for each copy of your business plan. Have the
holes punched in the pages of your business report to fit these binders and then slip each
copy into a binder of its own.

Now, you can relax, take a break and feel good about yourself..You have a complete and
detailed business plan with which to operate a successful business of your own. A plan
you can use as a basis for any financing proposal you may want to submit..And a precise
road-map for the attainment of real success...

You just complete one of the important steps to fulfill of all your dreams of success.

---------------------------------------------------------
Julia Tang publishes Smart Online Business Tips, a fresh
and informative newsletter dedicated to supporting people
like you! To find out the best online business opportunities,
and to discover hundreds more proven and practical internet
marketing secrets, plus FREE internet marketing products
worth over $200, visit: http://www.best-internet-businesses.com
----------------------------------------------------------

How to write a business proposal

May 20 2005
Writing a business plan or proposal is a difficult but vital skill for anyone starting up, with many issues to
consider and include. Alan Gleeson, managing director of Palo Alto, offers the following tips.
1. Write from the audience’s perspective.
The starting point for any business plan should be to look at it from the perspective of the audience. What is
the purpose of the plan? Is it to secure funding? Is it to communicate the future plans for the company? The
writer should tailor the plan for different audiences, as they will each have specific requirements.
2. Research the market thoroughly
You should undertake market research and ensure the plan includes reference to the market size, its
predicted growth path and how to gain access to this market.
3. Understand the competition
How competitive is the market? How are the incumbents competing; is there a price leader evident? Can
you compete effectively with the existing players? All this is vital in your plan.
4. Attention to detail
Make the plan concise, but include enough detail to ensure the audience has sufficient information to make
informed decisions. The plan should be professional, with realistic assumptions, credible projections,
accurate content, presented appropriately and with no spelling mistakes.
5. Focus on the opportunity
If you are seeking investment in your business, it is important to clearly describe the investment opportunity.
What is your unique selling point (USP)?
6. Ensure all key areas are covered in the plan
Include sections on your company’s product/service, market, competition, management team, marketing,
operations and financials.
7. Do the maths

19
Costs should be documented in full and sales predictions should be both conservative and realistic. If you
are not particularly comfortable with numbers, have someone assist you in preparing a simple cashflow and
breakeven chart.
8. Executive summary
Arguably the most important component of the plan is the executive summary. This is a summary of the
entire plan and is usually positioned at the start. If investors like it, they will read on, if not they will go no
further. It should be written at the very end of the business planning process and should have a ‘wow factor’
that entices them to read further. In tandem with this, the writer should also prepare a short ‘elevator pitch’, a
five-minute overview of the key benefits of the new product/service.
9. Review process
Once you have completed your plan, have it independently reviewed. Select someone detached from the
process who can offer constructive criticism on all aspects of the plan.
10. Implement the plan
A plan should always be viewed as a living document and contain specifics regarding dates, deadlines and
specific responsibilities. It should be constantly reviewed and updated, as well as being used in regular ‘plan
versus actual’ discussions. A winning business plan will help ensure you are fully focused on what is
required to achieve the company’s goals.

How To Prepare a Business Plan

Success in business comes as a result of planning. You must have a detailed, written plan
that states your ultimate goal, the purpose behind your goal, and each milestone that must
be passed in order to reach your destination.

A business plan is a written definition and series of operational instructions for achieving
your goal. This list of instructions will form a complete business tool with which to
define your basic product, income objectives, and specific operating procedures. You
must have a business plan if you hope to attract investors, obtain financing, or preserve
the confidence of your creditors.

Your plan for business success will serve as the background information and supporting
details of any financial proposals you submit to lenders, creditors, or investors. Many
entrepreneurs are under the mistaken impression that a business plan is the same as a
financial proposal, or thata financial proposal constitutes a complete business plan. This
is a misunderstanding of these two separate and different business success aids. Let's
describe the difference between them.

The business plan can be considered a longrange map to guide your business toward the
goals you've set. This plan details the what, why, where, how, and when of your business
the steps to ultimate success for your company. Your financial proposal is a request for
money based upon your business plan. It describes your business history and objectives,
recounting those details that make you an especially attractive investment for a creditor.
The financial proposal draws information from the complete business plan to develop an
attractive offer to the investor. Understand the differences between these two important
terms. They are closely related, but are not interchangeable.

Writing and putting together a winning business plan takes study, research, and time.
Don't try to do it all in one or two days. The easiest way to begin your plan is with a loose

20
leaf notebook, plenty of paper, pencils, apencil sharpener, and several erasers. For your
first session, choose a quiet place to work, away from the distraction of ringing
telephones, the interruptions of others, and the incessant droning of the television set.
Focus your thoughts on your business your hopes, dreams, and ambitions. Let your mind
race through the myriad of possibilities that you could accomplish given the capital
investment, personnel, location, etc. Jot all these ideas, thoughts, questions, etc. on the
paper in your notebook. Over the course of the next several days, it will be a good idea to
carry a pocket notebook and jot down those business ideas as they come to you ideas for
sales promotion, recruiting distributors, and any other thoughts on how to operate and
build your business. Later, when you actually sit down again and begin working on your
business plan, you can compile all your notes by category financing, sales, distribution,
advertising, etc. Then evaluate your ideas, rework them, refine them, and integrate them
into the overall picture of your business plan.

Title a separate page with each subject area of your plan and describe each thoroughly.
The subjects must identify your present position, present your ultimate goal in clear,
concise language; include a stepbystep description of how you will proceed; and have a
specific date set for the attainment of the particular goal.

Developing a set of questions to answer about your business forces you to take an
objective and critical look at your ideas. Putting it all down on paper allows you to
change, remove, and refine everything into a form that will best meet your needs. You'll
be able to spot weaknesses and strengthen them before they develop into major problems.
Overall, you'll be developing an operating manual for your business a valuable tool
which will keep your business on track and guide you in its profitable management.

Because the plan contains your ideas for your business, it's very important that you do the
planning. You must be the one to develop the plan and put it all down on paper just the
way it should read. Seek out the advice of other people. Talk with, listen to, and observe
others who are operating similar businesses. Enlist the advice of your accountant and
attorney. At the bottom line, however, don't ever forget that this must be your business
plan! Statistics show the greatest causes of business failures are poor management and
lack of operational planning. No one will ever succeed without a clearcut knowledge of
where to focus their attentions.

The best business plans for even the smallest of businesses run twentyfiveto thirty pages
or more. The suggested outline below is a logical organization of the information every
business plan should cover, and should serve as guide for the development of your own
plan:

* Title Page

* Statement of Purpose

* Table of Contents

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* Business Description

* Market Analysis

* Competition

* Business Location

* Management

* Current Financial Records

* Explanation of Plans For Growth

* Projected Profit, Loss, and Operating Figures

* Explanation of Financing for Growth

* Documentation

* Summary of Business & Outlook for The Future

* Listing of Business & Personal References

On the very first page of your plan, the title page, place the name of your business with
the business address underneath. Skip a couple of lines andwrite in all capital letters:
PRINCIPAL OWNER followed by your name (if you're the principal owner). For
example:

ABC ACTION 1234 SW 5th Avenue, Anytown, USA 12345 PRINCIPAL OWNER: Jack
Jones

That's all you'll have on that page except the page number. Following the title page will
be your "Statement of Purpose." The page title should be in all capital letters, centered
across the top of the page. Skip a few lines and write the statement of purpose. This
should be a simple sentence or two summarizing your primary business function, such as:
"We are a service business engaged in the direct marketing of business success manuals,
books, audio cassettes, and other information by mail." Make the statement direct, clear,
and concise. Next, skip several lines and flush with the left hand margin of the paper
write out a subheading in all capital letters, such as: EXPLANATION OF PURPOSE.
Beneath this subheading briefly explain your statement of purpose. Keep your
Explanation of Purpose" short - no longer than one paragraph. Very few business purpose
explanations are justifiably more than a half page long. Example: "Our surveys have
found most entrepreneurs to be sadly lacking in basic information that will enable them to
achieve success. This market is estimated at more than 25 million, with at least half of
these actively seeking sources that provide the information they need and want.

22
Combining our business, advertising, and publishing experience, it is our goal to capture
at least half of this market of information seekers by utilizing our publication
Entrepreneurs' Reports. Our market research indicates we can achieve this goal and
realize a profit of $1,000,000 per year within the next five years."

Now you will present the "Table of Contents." Don't really worry about this one until
you've got the entire plan completed and ready for final typing. It's a good idea, however,
to list the subjects (chapter titles) as we have above, and to check off each one as you
complete that portion of your plan. By having a list of the points you want to cover, you'll
be able to move around and work on each phase of your business plan as the ideas or
interest in organizing that particular phase stimulate you. Thus, you won't have to make
your thinking or your planning conform to the chronological order of the individual
chapters of your business plan.

Your "Business Description" will begin where your "Statement of Purpose" leaves off.
Describe your product, the production or procurement process,who has responsibility for
what division of the work, and, most importantly, what makes your product or service
unique and gives it an edge in your market. You can also briefly summarize your business
beginnings, present position, and potential for future success.

Next, your "Market Analysis" will describe the buyers you're trying to reach, why they
need, want, or will buy your product, and the results of any tests or surveys you may have
conducted. Once you've defined the market, go on to explain how you intend to reach the
buyers how you'll alert these prospects to your product or service and induce them to buy.
You might want to break this chapter down into sections such as "Publicity and
Promotions," "Advertising Plans," "Direct Sales Force," and "Dealer / Distributor
Programs." Each section would then be an outline of your plans and policies for that
subject area.

The chapter on "Competition" will identify who your competitors are, their weaknesses,
and strong points. Explain how you intend to capitalize on those weaknesses and match
or better their strong points. Talk with as many of your indirect competitors as possible
those operating in different cities and states. One of the easiest ways of gathering a lot of
useful information

about your competitors is by developing a series of survey questions and sending these
questionnaires out to each of them. As they respond you will be able to develop a
perspective on the market forces aligned against you. As an indirect result, you will later
be able to compile the answers to these questionnaires into some form of directory or
report on this business that you can sell. It is advisable to contact the trade associations
and publications serving your proposed type of business. For information on these
associations and specific publications, visit your public library. Ask for the librarian's
help, explaining exactly what you are seeking. Reading through the available publications
in the field will give you an idea of what additional sales angles your company can take
to reach an increased share of the market.

23
The chapter entitled "Business Location" simply states the present location of your
business, the size of the operating area, number of offices, floor plans or designs, types of
furnishings, machinery, tools or materialsnecessary for operation, proposed expansion
plans, possible sites for building new headquarters, and future possibilities for growth in
present location. This chapter will help you determine if the available space of your
present location will satisfy your future needs or if a move to adifferent location will be
necessary.

"Management" should be a description of the necessary jobs for successful operation of

your business. Describe the management hierarchy that actually runs the business, names
of individuals, their job titles, duties, responsibilities, and include a resume for each. It's
important that you paint a strong picture of your top management because the people
coming to work for you or investing in your business will be investing their time, money,
and lives in these individuals as much as in your product ideas. The individual tenacity,
mature judgment under fire, and innovative problem solving characteristics of good
managers have won over more peoplethan all the AAA Credit Ratings and astronomical
sales figures put together.

People becoming involved with any new venture want to know that the person in charge
knows what he's doing, will not lose his cool when problems arise, and has what it takes
to make money for all involved. After demonstrating the strengths of the top person, go
on to outline in descending order the other key positions within your business.

If you've been in business for a while, the next chapter, "Current Financial Records," is a
picture of your current financial status and a review of your operating costs and income
from the beginning of the business to the present date. Generally, this is a listing of your
profit and loss statements for the past six months, plus copies of your business income tax
records foreach of the previous three years the business has been an entity.

Entitled "Explanation of Plans For Growth," Chapter Nine is simply an explanation of

how you plan to keep your business growing a detailed guideof precisely what you're
going to do and how you're going to increase your profits. These plans should show your
goals for periods covering the comingyear, the next two years, and a complete three year
cycle. By breaking your objectives down into annual milestones, your plans will be
accepted as more realistic and will be more understandable as a part of your ultimate
success.

Next, itemize the projected cost and income figures of your three year plan in the chapter
"Projected Profit, Loss, and Operating Figures." It will take a lot of research (and most
likely a good deal of writing, editing, and rewriting), but it's very important that you list
these figures based upon thorough investigation. You may have to adjust some of your
plans downward, but once you've got these two chapters on paper, your complete
business plan will fall into line and begin to make sense. You'll have a precise map of
where you're headed, how much it's going to cost, when you can expect to start making
money, and what percentage you can expect that profit to be. Now that you know where
you're going, how much it's going to cost and howlong it's going to be before you begin

24
to recoup your investment, you're ready to talk about how and where you're going to get
the money to financeyour journey. Title this chapter "Explanation of Financing for
Growth."Unless you're independently wealthy, you'll want to use this chapter to listthe
possibilities and alternatives of future financing. Make a list of possible investors you can
approach and induce to put up some money as silent partners. Compile a prospect sheet
of those people you might be able to sell as stockholders in your company. In many cases,
a company can sell up to $300,000 worth of stock on a private issue basis without filing
papers with the Securities and Exchange Commission. Check with your corporate or tax
attorney for more details.

To further prepare for future financial needs, this chapter may also contain a list of
relatives and friends who might help you with a noncollateralized loan for the
development of your business. Next, search out and identify possible venture capital
organizations that will lend money to a businesssuch as yours. Visit the Small Business
Administration office in your areaand pick up the application papers for an SBA loan.
Read and study them carefully, even fill them out on a preliminary basis then compare the
costs on such a loan with other sources of financing. Determine in which business
publications your advertising would be best displayed if you were seeking a partner or
investor. Write an example of the ad you'd want to use if you did decide to advertise for
monetary help. With a listing of all the options available to meet your needs, all that's left
is to arrange these options in the order you would follow when the time came to seek
additional capital. While you're researching these money sources, you'll save time by
noting the name of the contact person to deal with when you want money. If possible,
develop a working relationship with these resources in advance.In your "Documentation"
chapter place a copy of all legal papers relative to your business. You should include a
credit report on yourself. Use the yellow pages or check at the credit department in your
bank for the nearest credit reporting office. When you get your credit report, look it over
and take whatever steps are necessary to eliminate any negative comments. Once these
have been taken care of, ask for a revised copy of your report to include in your plan.
This will help insure potential investors of your credit worthiness. If you own any patents
or copyrights be sure to include copies of these in the chapter. Any licenses to use
someone else's patent or copyright should also be included. If you own the distribution,
wholesale, or exclusive sales rights to a product, include copies of this information as
well. You should also place copies of any state county, or city business licenses, all
leases, special agreements, or other legal papers that might be pertinent to your business.

In conclusion, write out a brief, overall summary of your business. Entitled "Summary of
Business and Outlook for The Future," include in this chapter asummation of each of the
preceding chapters. Briefly recap when the businesswas started, the purpose of the
business, what makes your businessdifferent, how you're going to gain a profitable share
of the market, andyour expected success during the coming five years.

The last page of your business plan is a courtesy page listing the names,addresses, and
telephone numbers of personal and business references persons who've known you
closely for the past five years or longer, and companies orfirms you've had business or
credit dealings with during the same period. This will provide resources with whom

25
potential investors or creditors can check to verify your financial statements and personal
integrity.

That's it: your complete business plan. Before you have a final draft typedout, read the
entire plan over once a day for a week or ten days. Make any changes or corrections to
the plan, rewrite portions that seem unclear orweak. Finally, have each chapter reviewed
by an attorney and an accountant. It would also be a good idea to have it reviewed by a
business consultant serving your business field. After these reviews and any last minute
changes, the report will be ready for its final typing.

Hire a professional typist or word processor to type the entire plan on ordinary white
bond paper. Make sure you proofread it against the original. Check for and correct any
typographical errors, then reread it through for clarity and the perfection you desire. Now
you're ready to have it printed and published for whatever use you have planned: for
distribution to your partners or stockholders, as the business plan for putting together a
winning financial proposal, or as a business operating manual. Take it to a quality printer
in your area and have three copies prepared. If it was typeset on a computer, print your
copies on a laser printer for greater clarity. Have a copy professionally bound if you wish,
place one in a file for safe keeping and as a master from which to make any future copies,
and one to use to periodically reassess your goals or use as a daily and weekly guide to
business operation. Make the plan as useful a tool as possible for complete business
success.

Now you can relax, take a break, and feel good about yourself. You have a complete and
detailed business plan with which to operate a successful business of your own. You have
developed a plan you can use as the basis for any financing proposal you may want to
submit. You have formulated a precise roadmap for the attainment of real success,
marking out the milestones to pass on the way. Congratulations. Best wishes for the total
fulfillment of all your hopes, dreams, and ambitions!

Introduction

America is coming home to work. Home-based offices are becoming the wave of
the future. Tens of thousands of workers are opting for this new way of life, a life in
which they can make their own hours, commute to work in seconds, make their own
choices and become their own bosses.

For many, the home office is becoming the location for a full-time job and the primary
source of income. For others it is a part-time venture. Many start on a part-time basis and
grow their business into a full-time operation.

Current figures available indicate that during 1991, the percentage of self-employed
working from home jumped by almost 6% to approximately 12 million. While working at
home has an almost irresistible appeal to many, and many have some big misconceptions

26
of what it is like, here is some very useful information that can help you get started
successfully.Legalities of Working at Home

Zoning

Before setting up your new business, it would be advisable to check on the legal
status of your business. You need to check zoning laws for your community which may
dictate if you can legally operate a business from home. We realize that many businesses
never check on zoning for their home-based business and chances that they will ever get
into difficulties with the law are probably pretty slim. If there are no changes in structure
and you do not have customers and or employees enter your home, regulations will tend
to be far easier. Laws and regulations change from community to community, but the
following 5 items will generally be regulated:

1. Separate business and private entrances.

2. Square footage of the home which is taken up by commercial space.

3. Employees working in the home.

4. Certain occupations such as jewelry or clothing manufacturing.

5. Storage of commercial goods, especially any hazardous materials.

Here is an important suggestion: Keep relations with your neighbors on a friendly basis.
Your neighbors will soon become aware that you are working at home. Some may even
be envious, and yes, unfortunately zoning authorities will generally becomeaware of
home office zoning infractions through a "friendly neighbor".

Business License

Most cities or counties require businesses to be licensed. Some home-operated

businesses, however, are not required to have a business license. Check with your local
City or County Clerks Office to obtain regulations for your locality.

D.B.A. Registration

If you are using your own name as your business name it will not need to be
registered, but if you use any other name, or even your abbreviated name, almost all
localities require that you register the name. This is called a fictitious name registration or
D.B.A "Doing Business As" registration. If your names is:

Randy M. Jones and you name your business Randy Jones or Randy M. Jones
Enterprise you will not have to register it, but if you call it RMJ Enterprises, you will
generally have to register the name.

27
Most states have a name search bureau which is a part of the state government. You will
generally be able to call this office to see if a given name has already been
registered to someone else in the state. This is important to do, or it could be costly later.
If you give your business a name which is already registered to another company, the
other company may demand, and even take legal action, to make sure you comply, that
you cease to use the name.

Your Company as a Legal Entity

Businesses are most commonly set-up as one of the following entities:

The Sole Proprietorship

Incorporation
Partnership

Most new businesses are Sole Proprietorships. It is the least complicated. It requires no
paperwork. The proprietor, you or you and your spouse as the owner, or owners, are taxed
for all net profit from your business. You add the income of the business to other income,
or deduct the business loss from other income. Your tax adviser can give youspecific
information.The disadvantage of the Sole Proprietorship is that as the owner you can be
held fully liable in a lawsuit. An Incorporation, on the other hand, will give you some
protection. In this case the "INC" rather than you is the legal business entity. If you are
starting a business that tends to have liability exposure the, corporation may be the way to
go. In this and other legal questions, only your attorney can give you competent legal
advice.

Partnerships are generally chosen when unrelated individuals own a business. A

partnership should be set up by an attorney, or all kinds of problems can develop later.

Designing Your Work-space

First, you must determine how much space you need. Chances are what you may
initially think is quite large may be crowded or not enough space. While many businesses
are started from a corner of the bedroom or kitchen, if the space is available it would be a
far better idea to take a spare area of the house and convert it into your office. There may
be space in the basement, garage, or a spare bedroom. Having a separate space is more
efficient and will make for maximum efficiency. It is also psychologically important. You
do not want home activities to interfere with your business, or vice versa. Friends and
family will need to be told politely but firmly that business hours mean business and
dropping in, or calling to chit chat is not acceptable. Psychologists suggest that you work
"from" home not just in your home. There is a danger of becoming isolated. In as much
as time allows, participate in seminars and local business activities and organizations.

Financial Planning

28
It is said, and also my own personal experience, that owners of new businesses
never have enough time or money. The majority of small businesses which do not
succeed will fail because they are not properly financed. In your financial planning,
carefully review all required start-up expenses as well as on-going expenses before
revenue will be generated. Estimate your profit margins and all fixed and controllable
expenses. Almost all entrepreneurs will tend to be much more optimistic about their
estimate of the financial performance of a business than what is necessarily realistic.
There are always unforseen expenses.

It is a good idea to only invest in absolutely necessary expenses. This applies to

furnishings, supplies and all equipment. Computer equipment in recent years has become
outdated within a short period of time. So, if what you acquire will serve you well for 2-3
years you will be able to upgrade your equipment later on. Your emphasis should be on
conserving capital. As your business develops, unexpected hurdles will come along and
periods of low revenue. Your capital will make it possible to keep your business operating
during these times.

Why Should You Have A Business Plan?

While writing a business plan can be made into a highly sophisticated undertaking
especially by large corporations, it is easy to do when done for a new or small owner
operated-business. Essentially, you will be committing your plans to paper. As you do so,
your thoughts will become more formal and concrete and this will tremendously assist
you in the development of your business. If you are considering obtaining financing for
your new business either through a bank or the SBA, a formal business plan will be a
necessity. Home-operated businesses have a much more difficult time obtaining financing
that businesses outside the home.

Don't Forget Uncle Sam

As in all undertakings of life from birth to death and beyond, the IRS will be there to
watch over you. Almost all small, home-based businesses will start out as "Sole
Proprietorships." This legal status is best for ease of handling and for tax benefits. Your
net business income or loss becomes an addition or deduction to other income you
declare at the end of the year.

Careful record-keeping of all business revenue and expenses is a must. Keep a

separate business checking account for your business. Do not intermingle business and
personal expenses. Other special tax benefits and regulations apply to home-operated
businesses. You should obtain professional advise from your tax adviser.

Free Publications available:

"Record-Keeping For A Small Business" IRS publication 583. Call the IRS 1-800-
829-3676.

29
"Business Use Of Your Home" can also be obtained free from the IRS.

"Tax Guide For Small Business" is an annual IRS publication, #334. It is also free.

Insurance

One disadvantage of being self-employed is not having health and disability insurance.
You may also need liability insurance. Your homeowners insurance covers your
belongings in your home, but it may not cover all business inventory and equipment.
Check with your insurance agent to make sure you have the right coverage.

Factors that will Determine Your Success [related books]

Do Your Homework

The more you know about your business, the better your chances of success. Attend
seminars and join trade associations. Read books and trade publications. If you do not
have a business background a business introductory class at a local college would be
advisable.

Planning is Key to Your Success

You and your family's future and livelihood are at stake. So your decision and planning to
start a business are a very serious matter. Establish a long range plan which
encompasses your business and financial plans. You should obtain legal or financial
advice from an attorney or accountant before committing to any long range or major
financial transactions. Agreements with suppliers or customers should be put into writing.

You Must Wear Many Hats

Small business owners over time can become experts on a variety of subjects. At
the start the most important aspect is the development of your business so you have to
acquire a marketing mind-set. Your communication to the rest of the world through all
available means will determine your success. Here is an abbreviated marketing check list:

Telephone equipment
Promotional Material
Advertising (Don't forge the Yellow Pages)
Stationery
Direct Mail
Membership in Organizations
Direct Sales

Invest in Good Equipment

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The right equipment will make your work easier and your business more efficient. To
conserve cash, used equipment should also be considered.

So What Are Your Chances

The better you think they are, the better they generally are, and don't forget that
among thousands of others:

Apple Computer, Domino's Pizza, and Walt Disney all started as home-based
businesses.

Resources/Associations

There is a great deal of expert advice and resource material available to you. Much
of it is free of charge. A variety of literature is available, both excellent books on all
business subjects and various magazines. Your local Chamber of Commerce often
sponsors classes. Banks can give you advice, or can be used as a sounding board. Local
schools offer a variety of classes of interest to business owners. Don't forget the Public
Library. Last, but not least, don't forget the U.S. Government.
SBA (Small Business Administration) offers a range of services such as loans,
financial consulting, computer and technical consulting services and a variety of
publications.

Check your local telephone pages, or contact:

Small Business Administration

1441 L Street NW
Washington, DC 20416
(202) 659-6000

United States Chamber of Commerce provides literature, telephone referrals and

other services to small businesses. Contact your local Chamber of Commerce or:

United States Chambers of Commerce

1615 H Street NW
Washington, DC 20062
(202) 659-6000

Internal Revenue Service offers a variety of services which includes workshops, films
and publications to clarify tax matters for small businesses. Contact your local IRS office
or:

Education Branch, Taxpayer Service Division

IRS, Department of the Treasury
1111 Constitution Ave. NW

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Washington, D.C 20274
1-800-424-1040

Better Business Bureau (BBB) The BBB can be an important ally in checking on
potential suppliers and other businesses. Check for telephone listing in the city where the
company you are checking on is located.

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