Architects and engineers design blueprints to make sure that their creations will be sound structurally. If you are a business owner, a business plan is a blueprint to help you ensure that your business will be operated soundly. If you do not have a formal business plan, especially if you are launching a new business, you are leaving far too much to chance. A good business plan can help you avoid the most common errors and oversights that sink too many good businesses before they ever really get off the ground.
If you’re forming a new business in Florida, you should have the advice of an experienced business attorney to help you create a business plan and to help you choose what type of business structure best suits your ideas and needs. A business owner who wants to borrow money or attract new investors will be successful only if he or she can offer a well-written, well-researched business plan.
WHAT SHOULD BE INCLUDED IN A BUSINESS PLAN?
All of your potential lenders or investors will want to understand as much as possible about how your small business operates before they decide whether or not to back it financially. But even if you do not intend to seek outside investment capital for your small business, a business plan functions as a practical guide to help you communicate your business goals to others. Every formal business plan should include:
- An executive summary that outlines your company’s goals and explains why you believe those goals will be reached.
- A description of the company’s structure and management.
- A marketing and sales plan that describes how you intend to promote your business, attract your customers, and grow your profits.
- An analysis of your industry, the market, your prospective customers, and the competition.
- An explanation that helps prospective investors understand why your company is unique.
- A description of your services and/or products and the advantages that you can offer to consumers.
- Your company’s current and projected financial needs, how investment funds will be used, and the types of funding you seek.
- Your projected income and expenditures, credit history, and other pertinent financial details.
- Your business plan should also include documents such as letters of reference, permits, lease agreements, licenses, and patents.
How does creating a business plan directly benefit you – the business owner? When you work out a formal plan for the business, it can help you determine if your operation will be able to make a good profit, and it can provide an estimate of your start-up costs and how much – if any – you’ll need to borrow. A good business plan can also help you anticipate specific potential problems so that you can put solutions in place before those problems emerge.
WHY SHOULD YOU PREPARE FINANCIAL PROJECTIONS FOR YOUR BUSINESS?
Planning and projecting finances for your business are the ways to persuade potential investors that your business will make profits. But even if you have no need to raise investment funds, preparing financial forecasts is still a good idea. The process of developing financial projections, estimating your costs, and projecting your cash flow will help you determine if you need to reevaluate any of your assumptions regarding your business and its future. In other words, a proper business plan should tell you whether or not you are doing the right thing.
Optimism regarding your business is necessary, but your business plan must be based on the hard facts and the market realities that potential investors will consider. Daytona Beach business attorney Melody Lankford says that too many business owners pay too little attention to creating a business plan: “In my experience, unless a business plan is required as part of a bank loan or investor pitch, I’ve generally found that small business owners do not take the time to prepare a business plan. It is unfortunate because, in the fast-paced small business environment, it is easy to forget the rationale behind certain business decisions that relate to overall strategy.”
Attorney Lankford also explains several other reasons why it is vital to have a business plan in place: “It is critical to document where you want the business to be in one, three, and five years (market strategy) and how you want the business to operate (culture and company values). If a business does not enter certain marketspaces or choose to do business with a specific entity or geographical region, it is important to have that rationale documented for both the business owner as well as current and future stakeholders.”
HOW CAN A SMALL BUSINESS ATTORNEY HELP?
Launching a new business venture is never easy, but an experienced Daytona Beach business attorney can help you create a business plan. If you already have one, a good business lawyer can comb through every line of your current business plan to ensure that it’s the right plan for your business, compliant with federal, state, and local laws, and does not expose you to unnecessary risk. Choosing the right business organization, the right small business attorney, and the right business plan is the wisest way to lower your risks and to boost your company’s overall prospects for growth.
Whether you plan to start a new business or buy out an existing business, it is imperative to plan in advance to ensure that your operation is on solid footing for at least the first several years. Any businessperson with experience can explain that the business you decide not to launch – because a financial projection doesn’t pan out – may be more important to your long-term success than the business you start and end up having to close. Mistakes made right at the launch of a business can spell disaster, but most businesses will flourish in Florida if the owner plans diligently and obtains sound legal advice.
Florida’s small business owners face potential legal troubles almost everywhere they turn. Even the minor violation of a regulation or a simple honest mistake can cost you in lost time, unnecessary fees, and seemingly endless paperwork and red tape. But when you have a good small business lawyer on your team, you’ll be working with an attorney who already knows you and your business whenever legal needs or legal issues emerge.