QUICK-LAUNCH BUSINESS PLAN
AUDIO TRANSCRIPTION
SEGMENT 1H

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	As you can see in Anna's business, we talk about budget 
Development.  On Page 6 of her business plan, we have a startup budget 
and costing document.  It is a very simple table that we've imported 
into the business plan.  You can do that on a spreadsheet, or it can be 
a real simple list inside the business plan.  We're listing general 
startup costs. I also like to list, who might be paying for that? 
Where is the source of the income from that?  Is it from sales?  
Is it vocational rehabilitation?  Is it the community rehab program?  
Is it the One-Stop system?  And, is it a PASS plan through Social Security?  
These just adds a little bit more detail to the startup.

	Again, it's a list of ongoing expenses, both fixed and 
variable.  If you need more information on fixed and variable costs, 
you can look in our book or you can go on our web site.

	Budget development is pretty simple.  We're looking at starting 
inventory.  What do I need to get going?  If I'm making picnic tables, 
I'm going to need some wood to get going.  I'm going to need some drill 
bits.  I'm going to need some nuts and bolts to hold these things 
together.  I might need nails for a nail gun.

	What kind of equipment am I going to need?  I'm going to 
need that nail gun and a compressor to run it.  All of those things 
cost money, so in order for me to get going I either need to buy that 
equipment, or I need to lease that equipment.  Maybe I already own that 
equipment, and I'm going to bring that in as part of the assets of my 
business.

	Am I going to need transportation?  Do I need to get to the post 
office every day like Anna does?  Am I going to have to go out to my 
suppliers?  If I'm buying picnic tables, I'm going to have to go buy 
wood or else I'm going to have to have it delivered.  I'm going to have 
to figure out how to get these picnic tables to my customers.  Or,
I'm going to say, "You come pick up your own picnic table."

	So that non-linear piece of this goes back to, "Who are my 
customers?"  My customers are people who are capable of arranging 
transportation to pick up their own custom made picnic table.  I don't 
want to sell to people in the inner city who don't have cars, and would 
have to load their picnic table on a city bus.  That's probably not 
going to be reasonable.


	That might also mean, as I work through my business plan and 
deal with this problem, that I’m losing a lot of customers who live in 
downtown New York City. Because, most of my potential customers don’t have cars. 
But, they want to get a picnic table to put on their balcony in their apartment. 
How am I going to do that?  Well, that might lead to a whole other product, right?
A kit where I pre-cut everything, put it in a box. They can buy that box. 
They can load that box in a city bus or a taxicab trunk.

 	Again, be thinking about this as you're writing this.  Be 
open to new ideas, products, and services.  As you encounter what 
might be ideas, sometimes the solutions are a whole new business model.

	What's shipping going to cost? How am I going to accomplish 
it?  Shipping is a big deal for people who run e-Bay businesses.  They 
have to have a shipping department basically in their kitchen, bedroom, 
or wherever.  That takes some equipment, such as a postage scale.  
It takes transportation back and forth [to the post office], unless 
they want to pay the added fee of having the post office, UPS, or Fed-
Ex pick that up every day.  That's certainly another nice accommodation 
for disability.
 
	What are my rent and utilities going to cost? Can I afford that?  
Does it make sense, if I can't afford rent? Let's say I want to start 
a shop building hotrods. But, I can't afford the shop and necessary tools, 
such as a big air compressor and a phone system.  But you know what?  Maybe I can 
find a garage that has a bay or two in the back where all that 
equipment already exists.
  
	Maybe I can move in. I don't have to buy my own garage.
Maybe I can run my hotrod shop inside somebody else's garage, thereby 
increasing the amount of natural support in that environment.  
In other words, create a business which is a complimentary business.
I've reduced my overhead costs, because I don't have to buy a compressor that 
already exists. I may have to pay for a portion of its use, but I don't 
have to pay for the whole thing.

	Again, as we go through this and run the numbers, we 
start thinking of other scenarios that will allow us to cut costs and raise 
convenience.  If we're locating our hotrod shop inside another garage, 
let's say a body shop that's already got customers coming, we're 
already in the automotive loop. We can piggyback on their customers.

	They come in to get their car fixed after a little fender-bender 
and they see my operation in the back.  They wander back and go, 
"Hey, what are you doing here?"  "Well, I'm restoring hotrods."  They 
go, "Hey, you know what?  My uncle has got an old '57 Chevy he's been 
wanting to get worked on.  It's been sitting in the garage forever.  
I'll tell him you exist."  That partnership with that existing business 
really cuts my cost, and it expands my network geometrically or 
exponentially.
 
	Again, be thinking about different models.  Be thinking 
differently, because everything costs something. Any time we 
can lower costs, we make more money.  Its important in business to make 
money.
 
	What are my insurance needs?  People really freak out about 
insurance for some reason.  Insurance and accountants are both pretty 
cheap. They are both highly recommended.

	A lot of times people think about liability insurance for 
products or services.  Most companies don't need that.  I'm not going 
to give you legal advice, you’ll need to figure that out.  That's a good 
reason to go and meet your local small business development center. 
Tell them your product or service that you are developing and ask 
them their opinion about insurance.
 
	I wouldn't call an insurance broker. It is like calling the 
IRS and asking them for tax advice.  Insurance companies exist to sell 
you insurance.  They can certainly help you figure out what policy you 
need, but not whether or not you need a policy.  What kind of business services
will you need? Do you need a bookkeeper or an accountant?  Do you need somebody to 
do your taxes?  Do you need a marketing firm?  Maybe your business is big enough
that you actually do need a marketing firm.  Those are going to cost something, 
so think about that.
  
	What are your taxes going to cost?  You'll notice that when you look at 
our spreadsheets in this particular training, we don't add taxes.  One of the
reasons why is that it's a pretty simple calculation, generally.  Various cities,
counties, and states have varying tax rates or no taxes at all.

	We leave that up to you.  That's, again, another opportunity 
to go sit down with your small business development center folks and 
talk to them.  They do this every day. They know what your tax rates 
are.
 
	They know if you're selling retail, what kind of retail sales 
tax license you need, how you calculate that, and what the percentages 
are.  Those are pretty simple calculations. Don't fret about those since 
they are easy to figure out. What kind of licensing do you need?  Do you 
need a food handlers license?  	Do you need a retail sales tax license?  
Do you need to be licensed in another state because you're doing business there?  
All of those kinds of things are great questions for the small business 
development centers. There really are quality people at SBDC's.
 
	Networking is something you want to do.  These folks  know other people
in the community.  They know great suppliers and potential customers for your
business, so go meet them.

	Also, what about communications?  Do you need a web site or 
email?  You may or may not.  	Do you need a cell phone?  We find cell 
phones are a great accommodation for folks with disabilities and for 
anybody else.  But all of those things cost something.  Do you need a 
1-800 number?

	Think through the process about what are you going to need.  
This also goes back to feasibility testing.  When you're testing a 
product, especially by selling it, you're realizing the kinds of 
supports, equipment, and tools you need to make it easier to do.
 
	When you're going through budget and costing research, what I 
like to do is to make individual assignments.  Generally, people work 
through teams in our business.  We've got the potential business owner 
who may or may not be writing their own business plan. But, most of us 
who are starting a business need some assistance, so we have a team 
around us.
  
	Make individual assignments to go figure out what things cost.  
Usually it's a phone call to the phone company, an Internet provider, 
or, sitting down on e-Bay and figuring out what are the add-on costs for 
pictures and highlighting your product on e-Bay.
  
	If you're going to go out and rent space, send somebody down to 
meet with a property manager and go look at some sites along with the 
potential business owner.  Calculate the cost of that, what is 
included.  Are heat and lights included or is there a sign on the 
building that could be used?

	Assemble those cost estimates together.  It's a great team 
building exercise.  Discuss a rationale for pricing and sales 
forecasting based on the research.  Look at your costs now. 
Can you afford to sell your product or service based on what 
you've discovered, about how much things cost to actually produce 
that cost or service?
  
	A lot of times people underestimate the cost of things, so we 
have to end up raising our prices a little bit.  The other piece that 
we'll look at here is budget and break-even.  In the handouts that 
we've given you with these exercises, there is a consolidated budget 
and breakeven templates.

	All you do is enter your data in there, it's very self 
explanatory, and it will generate a graph for you that shows at the 
point where your sales exceed your cost.  Where your profits exceed 
your costs is the break-even point.
  
	I try to include a breakeven analysis in any business plan I 
write.  People can look at that chart graphically and say, "Ah-
ha, in month 12 that's where we start making money, or in month 6 
that's where we start making money."  That's an important piece, not 
only for me, in managing a business and in owning a business, but 
that's important for the people who are going to fund your business.  
Include your costing data, sales projections, and public & private 
support.  What are Social Security work incentives?  Is VR throwing some 
money into this?  Are you bringing some cash into this?  What's that 
looking like as far as moving your business on?
  
	You'll notice that in your handouts there is a budget with 
and without support.  Without support generally it shows that if I don't 
have some startup help from vocational rehabilitation, my CRP, or One-
Stop, it's going to take me a lot longer to show a profit.  But with my 
PASS plan and VR's help, I'm going to start making money right away.

	Generally, that's a great sales tool for funding to show how, with 
just a little bit of help, I can get on the road and get moving with 
this business right away.  Use those templates.  This is a 
sales document as much as it is a planning document.
 
	Finally, what you want to do at the end, after you've put all of 
this together, is to write up your summary.  Write a brief wrap-up and 
discuss the possible opportunities and some limiting factors.  Talk 
about the threats to the business a little bit, but don't talk yourself 
out of the business. Put a positive spin on it.  Do talk about these 
threats in terms of the strategies that I've got to overcome this.
  
	If you're opening an espresso stand in Seattle, chances are 
you've got some competition.  A lot of times people who are reviewing 
your plan will say, "Well, there's 800,000 espresso stands already in 
Seattle."  And what you can say is, "Yes.  But there's not one of those 
in this Federal building where there are 1,000 Federal employees in 
this building. I've got the sole espresso stand.  Yes, there may be 
a Starbucks across the street, but I'm more convenient.  Even though I 
cost just as much as they do, I'm much more convenient.  You don't have 
to cross that busy intersection to get to it."

	It is okay to write that in, don't avoid that kind of conflict.  
It shows, for me, that you've thought about the process a little bit.
Re-enforce the predictions of growth.  This is your summary 
statement, be positive, but thoughtful at the same time.

	Thank you very much.  So, sit down and write your plan.  We're 
always more than happy to hear from you, as well.  Thanks.


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