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Business Plan Tips and Resources for Entrepreneurs

There is great debate as to whether entrepreneurs should have business plans. Although they are required for people seeking business loans, you should still have one even if are not seeking financial assistance at this time. Keep in mind that you may need a loan in the future, and the foundation of your plan will already be laid.

A written plan helps you define what you are offering, who you selling to; and how much you need to sell to make a profit. Some people get intimidated by the thought of preparing a business plan. While it does take time to write, you don’t have to complete it all at once. Remember, a business plan will never be final. You will continually revisit and revise your plan as your business continues to evolve and grow.

In the early stages of planning, your document should clearly define your product and service offerings; target markets; marketing strategy; and financial plan.

There are a few things to keep in mind as you write your business plan.

  • Your business plan can be as few as five pages as long as you address the above-mentioned essentials.
  • You can’t be everything to everybody, so market research is essential. Just because your product or service appeals to several groups of people doesn’t mean they want it or are willing to pay for it.
  • If you fail to plan, you plan to fail. Research is crucial. You need to study the market you want to serve and the industry you want to enter.
  • Revisit your plan as often as needed.
  • Your market research and financial plans are the most important aspects of your plan.
  • It doesn’t have to be overly formal. This is your plan. It can be as informal as you want as long as you understand what you mean.
  • Use images to help visualize your goals and plans.
  • Write any thoughts about your business that comes to mind. This is your place to see what works and what doesn’t.
  • You are in business to make money. If you want to be charitable, start a nonprofit. If you don’t like taking people’s money, make your activities your hobby.

Check out books and sample plans to get you going, but use them as resources only. Do not try to fit your business into someone else’s model – even if you have the same business. Their dream is not your dream; therefore, you will get frustrated trying to make it fit. All books on business plans are not good books. Go to a local bookstore or library to review a few and select two or three that work best for you.

The following sources can help you through the business plan writing process and make it less intimidating.

Organizations that support small business owners

  • Small Business Administration
  • Women’s Business Development Center
  • SCORE
  • Business departments at colleges and universities
  • Other established business owners
  • Local chambers of commerce and business associations

Business Plan Resources

  • Small Business Administration
  • BPlans.com
  • Entrepreneur
  • Women’s Business Development Center
  • City and state resources for small business owners
  • Bookstores and libraries

Market Research Resources
These books can be found in the reference section at the library. Most cannot be checked out. However, you may luck up and find them on an online bookstores at a fraction of the cost.

Print Directories

  • Directory of Associations / Directory of Tradeshows
  • Sourcebook of Zip Code Demographics
  • American Market Place
  • Small Business Sourcebook
  • Best Customers – Demographics of Consumer Demand
  • Survey of Current Businesses
  • Industry and Trade Outlook
  • State and Metropolitan Area Data Book

Online Resources

  • Reference USA
  • ABI/Inform
  • ProQuest
  • Census – Business Census

Above are just a few tools to get you started on your business plan writing journey. If at anytime you feel stuck, contact one of the organizations listed to speak with a counselor. If you need assistance with your marketing or financial plans, they can help you with those, too. Just be sure to have a plan.

Business Update: Legislation Affecting YOUR Access to Federal Contracts

Informed business owners not only are aware of the legislation that affects their business, but also take proactive steps to incorporate the changes into business-building strategies. The areas affected by recent legislation and rulings include:

  • Small Business Parity
  • Increased Dollar Thresholds
  • Sole Source Dollar Award Thresholds
  • Women’s Procurement Program
  • Prime Contractor Requirements for Subcontracting Plans
  • Bundling Limits
  • Size Standards Review

Small Business Parity

Equal footing was restored to all small business types in federal contracting programs. The types of small business affected are: those businesses who are “Small” as determined by the SBA Size Standards, 8(a) Certified, Women-Owned, Service Disabled Veteran-Owned and HUBZone. This means that the contracting officer now has the ability to choose the small business type for set-aside opportunities as opposed to being required to focus on just only one type, such as HUBZone.

Owners of small businesses pursuing government contracts will take advantage of this situation by answering every Sources Sought Notice or Request for Information (RFI) where their products or services are required. The federal government uses Sources Sought Notices and RFIs as market research to determine if enough qualified small businesses can perform the work, and if so, will then have reason to set-aside the contract for small business, or a particular type of small business. For instance, if two businesses who are 8(a) certified respond, the contracting officer may then issue the opportunity as an 8(a) set-aside. If one business responds who is 8(a) and another who is woman-owned, the set-aside may be for “small business”.

It is critical that small businesses respond to these notices in order to give the contracting officer a legitimate reason to use the set-aside program and not use a full and open competition process where all businesses, large and small, would compete for the contract.

Increased Dollar Thresholds

In the past, contracts between $3,000 and $100,000 were to be set-aside exclusively for small business, with a few exceptions. This threshold was increased from $100,000 to $150,000. Generally, this means that all contracts valued between $3,000 and $150,000 should be set-aside for small businesses.

The exceptions to this new limit would be sales made on GSA Schedules or task orders on other contract vehicles such as Government-wide Acquisition Contracts (GWACs) or Indefinite Delivery Indefinite Quantity (IDIQ) contracts. Those sales are available to any size company, large or small.

Savvy small business contractors will take time to contact all current contracting officers for whom they have worked and educate them about the increase in the threshold and ask for any upcoming opportunities that may fall within the new thresholds.

Sole Source Dollar Award Thresholds

Contracting officers have had the opportunity to make sole-source contract awards (where no competitive bidding is required) to 8(a) and HUBZone firms up to 3.5 million dollars for any non-manufacturing work and 5.5 million dollars for manufacturing. Those limits have now increased to $4 million and $6.5 million dollars respectively.

The Service Disabled Veteran Owned Small Businesses (SDVOSBs) threshold for sole source awards has now increased from $3 million to $3.5 million for non-manufacturing and $5.5 to $6 million for manufacturing contracts.

Educated business owners will contact their local Small Business Administration (SBA) representative and learn how to request and participate in the sole-source contracting process. There is a very specific process to follow to win sole source contracts and your SBA representative is a very important person who will guide you through the process.

Women’s Procurement Program

The SBA announced the publication of a final rule, called the 8(m) Program, to implement the federal procurement program for women-owned small businesses (WOSB) that has been over ten years in the making. This is an economic-disadvantaged-based program in which eighty-three industries have been identified where WOSBs are underrepresented among federal contractors. Thirty-eight of which the SBA has deemed WOSBs to be “substantially underrepresented.” The 8(m) program seeks to open up more opportunities for WOSBs working in these 83 industries.

To be eligible, the company has to be considered “small” under the primary NAICS code, and not less than 51% unconditionally and directly owned and controlled by one or more women who are U.S. Citizens. Further, the rule specifies that, with certain exceptions, the woman who holds the highest officer position may not engage in outside employment and must manage the company on a full-time basis during the normal working hours just like other companies in the same or similar line of business.

To determine whether a woman is economically disadvantaged for purposes of the 8(m) Program, the SBA will check her income, personal net worth, and the fair market value of her total assets. A woman will be found economically disadvantaged if her adjusted gross yearly income, averaged over the three years preceding the certification, is less than $350,000, her personal net worth is less than $750,000, and the fair market value of all of her assets is less than $3 million. In the 38 industries where women are deemed to be “substantially underrepresented,” the rule waives the economic disadvantage requirement.

Woman-owned businesses may either self-certify or certify through third parties approved by SBA. Regardless of the certification method, every woman-owned business must ensure that all requirements for the following three databases are met:

Central Contractor Registration (CCR)
“WOSB Program Repository,” to be established by the SBA
Online Representations and Certifications Application (ORCA)

This program is scheduled to go into effect in February 2011and the SBA estimates that federal agencies will be able to start setting aside contracts for WOSBs in the first quarter of 2011.

Right now, WOSBs are planning their strategies to build strong relationships with target agencies and prime contractors so that they will be well-positioned for accelerated success after February, 2011.

Prime Contractor Requirements for Subcontracting Plans

Prime contractors have been required to write specific subcontracting plans for all non-construction contracts over $550,000 and $1 million for construction contracts. Now, the limits are increased to $650,000 and $1.5 million for construction. Prime contractors will also be required to use the subcontractors listed in their subcontracting plan, unless they went out of business within 1 year.

Prompt payment to subcontractors will also be enforced in that subcontractors must be paid within 90 days. Contracting officers will be required to include this and related issues in the published prime contractor’s evaluation.

Bundling Limits

In the past ten years, the practice of contract bundling, or consolidation, has grown dramatically. This is the practice of combining many related or even non-related services or products under one, generally very large, contract. Because the contracts grew to extraordinary sizes, often exceeding 100 million dollars, most small businesses were effective cut out of competition.

Recent legislation now states that no Federal agency acquisition plan can include consolidation of contract requirements (bundling of contracts) worth more than just $2 million unless consolidation is necessary and justified. There is now an across-the-board policy on bundling: Agencies will be required to solicit bids from small business joint ventures and teams on solicitations above the bundling threshold.

This means that there will be many more contracts of smaller sizes up for competitive or even sole-source bids. While this is very good for small business, it will make the contracting officers’ lives difficult and demanding.

The businesses who will be most successful in this market will have all of the necessary certifications, contract vehicles and full preparation with regards to the needs of the market, not to mention strong relationships built with the decision-makers.

Size Standards Review

Every business can be identified by its industry with the North American Industry Classification System (NAICS). These NAICS have been associated with specific measurements such as number of employees or amount of revenue to determine when a company is considered a large or small company. Some size standards have not changed in over ten years. To keep up with economic changes, the SBA will now conduct a review of one third of size standards (by NAICS code) every 18 months, completing a comprehensive review of all NAICS every 5 years.

These legislative updates can bring significant changes to the federal procurement market and either help or hurt business. The more knowledgeable and better prepared you are, the greater the chance is that your business will benefit, increase revenues, employ more people and help rebuild our economy.

Looking For The Suitable Business Finance Solution For A Small Business

Surely it’s no mystery that searching for the most suitable business finance option to be able to get the financing essential to launch a small business gets to the mind of every businessman. While business finance options are around every corner it is essential to end up getting the right type of funding for a particular kind of business.

As a business owner, you need to find out that picking the wrong type of funding may lead to undesired situations just like feuds between you and your financier, a shift of control that is out of your hands and total waste of time and money, as well as other unwanted consequences.

The thing is that you have to look for and go for the most beneficial business finance option which best fits your small business. As a way to aid you to find the ideal financing alternative, we’ve outlined various financing options which you may find appropriate for your business.

Friends And Family

In the event that your loan wasn’t granted, give some thought to asking a rich relative or good friend for a little help. The most sensible thing about obtaining a small business financing from family and friends is that asking for a small amount of funds is fast, hassle free and has no legal expense. Even so watch out, continue to be professional and keep in touch. No doubt you wish to safeguard your relationships with friends and family and so make sure to repay the amount of money you have borrowed.

Debt Financing

Most new small businesses are funded with debt financing by means of a finance company. If perhaps you pass muster, banks can give you a history of credit. Know that this loan includes an interest rate and repayment schedule. However in advance of offering you a loan, they will carefully examine your company’s earnings, collateral and liquidity of your property. In addition, you furthermore should have a good business plan and know the inside and outside of your financial condition. If perhaps you need to improve the probability of your success to have your loan given, you need to establish a relationship with your lender ahead of your request for loan.

Grants

For anybody who is starting up a whole new business from scratch or in the technology game then getting a grant via the Small Business Administration is the very best way to try. Remember that SBA does not grant loans, they do guarantee them. They considerably reduce the lender’s risk so making them qualified to provide a loan. The pre-qualification program of SBA is intended to help new and growing business, disabled business owners, low income borrowers, veterans, exporters, rural, and specialized industries. In these times of economic crises, an entrepreneur shouldn’t fail to notice ‘free money’.

Venture Capitalists

Approaching the venture capitalists is an excellent way to consider just in case you happen to be beyond the start-up stage, have initial revenues coming in, a quality team in position and also have a clear path to finally sell the business. Yet be aware that the VCs right now have higher standards than in the past. They remain a serious player in the investing world up to now. They offer you a very time-sensitive funding and assures they immediately get their money and profits. In case you are planning for a meteoric growth and will require further business financing later on to attain it, they’re certainly a great source.

Equity Financing

Even if debt financing is often preferred by business owners, however there are still a lot of companies which are funded by private or institutional investors in exchange for an equity ownership stake.

Angel Investors

Angel investors can be your wings to get funds, they fill the gap between friends and family and venture capitalists. Angel investors now seldom even take a look at investments below $1 million. They made their name as being warm and friendly and patient about their investments as well as by providing their business wisdom and priceless relationships along with their money. So why don’t you get a knowledgeable business finance adviser to plan the deal.

Strategic Investors

Strategic investors could actually help if perhaps you need to get to market without delay. They brighten up the investee’s outlook for more investment and success by means of putting value to the funds it invests with its contacts, experience, and know-how of market. Nevertheless you really need to be careful that they can prohibit you from selling to your competitors, can swamp your business with opportunity, manipulate you into reallocating your company’s assets in a lopsided way as well as end their business relationship with you on in just an instant! Which means that you need to make certain you know what you’re getting into.

The bottom line is, choose intelligently. Be aware that even some small business finance options can be complex and risky and you have to make the right choice. It’s very important that you complete your homework; request the right amount, get the right source at the best time. With this you can get the funding for your start up company which is right for your business and stay prepared to achieve business success.