MDS Funding Newsletter

Fourth Quarter 2005

Often clients tell me that they get so caught up in managing their business that they neglect to take time to plan for the future. In this, the premier issue of my newsletter, we are focusing on steps you can take to get your business prepared for excellence in 2006. I hope that you will find this information to be useful. Please do not hesitate to contact me if you have any questions about this content or if you would like to request a complimentary review of your plan for managing cash flow.

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In This Issue

* From the Desk of Michael Moss

* Getting Ready to Write Your Plan

* What to Put In, What to Leave Out

* Where Should I Begin My Financials?

* Tips & Resources

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Getting Ready to Write Your Plan

Your business plan should precisely define your business, identify your goals and serve as your organization’s resume. Before you begin forming your business plan, you will want to make sure that you have the answer to these four questions:

* What service or product does your business provide and what needs does it fill?

* Who are the potential customers for your product or service and why should they purchase it from you?

* How will you reach your potential customers?

* Where will you get the financial resources to fund your business?

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What to Put In, What to Leave Out

When you're ready to develop a business plan,

remember that you want a plan that fits your exact

business needs. The focus will change depending on

whether you are creating a plan for the startup

phase of your company, raising investment capital,

applying for a commercial loan or managing an

existing business. Most plans include sections

addressing each of the following:

* Executive Summary

* Company Overview

* Products and Services

* Market Analysis

* Strategy and Implementation

* Organization and Management

* Financial Projections

As you evaluate these standard sections, remember

that this is your plan so you can omit anything that

doesn't fit your needs. For example, if you're

developing a business plan for internal use only, you

don't need to describe your company history. You

might want to include management team gaps and a

personnel plan, but you probably don't need to

describe the background of your key management

team members.

Making your plan fit your needs means you might add

some things, too, beyond the standard outline. For

example, a plan for investors should include the

investment offering--what amount of money invested

provides what percent of equity--as well as a

discussion of exit strategy, use of funds and return

on investment (ROI). A plan supporting a bank loan

application needs to describe the loan requirements,

intended use of funds, collateral and repayment plans.

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Where Should I Begin My Financials?

Start by putting together an outline of real cash

flow. Your plan should show cash flow ? either

projected, actual or both on a month by month basis

for at least 12 months. Identify your sources for

working capital (cash sales, receivables, etc.), the

amount and then show what you will be spending it

on (payroll, taxes, etc.). Remember, this is cash

flow, not a P&L statement. Understand that cash

flow is different from profits. Profitable

companies go under all the time, but companies with

positive cash flow can pay their bills.

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Tips & Resources

Free Assistance from the Small Business

Administration

www.sba.gov (http://rs6.net/tn.jsp?t=yor4hqbab.0.0.9qe8xhbab.0&p=http%3A%2F%2Fwww.sba.gov%2F)

Business Plan Templates

www.score.org/template_gallery.html (http://rs6.net/tn.jsp?t=yor4hqbab.0.0.9qe8xhbab.0&p=http%3A%2F%2Fwww.score.org%2Ftemplate_gallery.html)