hello my name is Gary Shotton and I’m happy to be with you again today and today we’re going to talk about writing a business plan wow that’s kind of like budget and diet who likes to write a business plan horrible well you know what is kind of required if you’re going to get a loan first of all never download a business plan from a software one size does not fit all it just you missed the whole point if you’re downloading something number two don’t pay somebody else to write your business plan for you that’s just a piece of paper you don’t know what’s in it you’ve got to realize that the business plan is primarily for you you think it’s to give to the bank but it’s for you to put down your thoughts in a logical fashion and I will tell you a good banker will know whether you have written it or where you paid for somebody or downloaded because they’re going to ask you some questions and you need to understand it it’s not like the thesis at the end or our term paper end of a college class whoo I’m done with that no this is a live living piece of document so i am really encourage you to do this on your own and normally people have trouble depth that have trouble writing their business plan have not asked enough questions they’ve not got into their subject matter enough frankly they don’t know what they want to do so if you don’t know what you want to do it’s pretty hard to write it down so if you can formulate your thoughts after you’ve done kind of a feasibility study or after you’ve done some significant investigation it’ll be a whole lot easier now we suggest that you keep it short up to three hundred thousand dollars or less I’d say four pages would be enough I borrowed I had a business of 2.75 million on this business right here and I had eight pages that’s all not 88 and I knew what was in there because i worked on it for six months i rewrote it and rewrote it not to make a theme I’d paste like a paper to get an a on my my college course because my livelihood is in this I wanted to understand it I wanted someone that looked at it and read it understand that they had my best interest of the hand and they would criticize it and bring attention to things I might have missed that’s what you want now there’s two major parts to a business plan typically there’s the written text and then there’s the financial statements now the financial statements has another class all of its own and I will do that while refer to the profit and loss also known as the income statement as our main document in reference to the business plan so we I like to say that if you’re writing your business plan in your native tongue your native language again keep it short keep the first sentence exactly concisely what you’re planning to do practice that in speech it’s called an elevator speech if something that you can say in one sentence that totally captain capsule eights what you’re planning to do I’ll try to leave a little time to give an example now then then your next of your pages a total of four pages would be following the format of your financial statement your financial statement is basically starts with income and then below that per month month by month it shows your direct expenses and below that your month by month they would show your overhead expenses so I suggest after that first sentence that you start explaining what’s going to happen for income oh yes you should include the corporate structure are you a corporation I would want to know that are you a sole proprietor do you have other investors because that’s very important to me if I’m looking to invest with you but then I’m going to start with the income how are you going to get income what mechanism are you going to use to trace the income how are you going to document that a income and that’s going to start matching that financial statement and then you’re going to talk about your direct expenses and then you’re going to talk about your overhead expenses now let’s do as quick as I can let’s say I was talking about a restroom and I’ve on my first sentence I’ve said something like this I planned open a Chinese restaurant located at the corner of this corner in that indicating how ritzy this is going to be and then I’m going to have it open from lunch and dinner I’m going to be open to 20 days in a month and i’m going to know from that what my average ticket is that on everybody that comes through my restaurant is going to be averaged together and i’m going to just say that I have a hundred customers a day and they average fifty dollars per ticket doesn’t matter how many eight doesn’t matter if there’s a group of 15 or just one average them together because you’re going to have to monitor this are you on track with that so I would say that I’m basing my financials on 21 20 days a month 100 customers a day fifty dollars a ticket and i would multiply that out i’ll try to do it 20 x 20 x a fifth heavy five thousand dollars at the kadai and x 20 should be a hundred thousand dollars if i’m wrong correct me okay but that would be your income now what’s your expenses i would have studied and known that the raw food cost is one of my base expenses so i would know that that’s going to be roughly twenty percent of my income is going to be for food can’t be much more than that or you’re going to go broke so if i have a hundred thousand dollars in the first month as income then i’m going to have twenty thousand dollars in expense and what other direct expenses do i have well i’m going to have a cook i’m going to have some waiters well they might get tips will spell out tell me briefly what they’re going to do how are you going to pay your waiters water if i was to shut down the doors and that my direct expenses went away these expenses would not be there but i have overhead then tell me that based on my investigation and asking questions i’ve determined that my rent is going to be four thousand dollars a month or two thousand dollars a month my utilities write it down use numbers let me read it let me know that you know what you’re talking about if i’m going to ask you how you got your numbers you should be able to point to that text and they should match month by month that what I’ve just described was your text match with your financial statement it’s kind of like another language if I’m learning Spanish I know what agua is its water if I know in my text statement by written it in my native language english then I know my financial language that would be my income so I make those match all the way down the line last but not least if you’ve got more information like a recipe or your history or employment put a lot of stuff in an appendix don’t clutter me down don’t make me read a whole document the 50 pages sick just to loan you 300,000 dollars I want to get to the point I want to know that you know what you’re doing I want to know that if I ask you a question you wrote your plan and you understand it because I’m not investing in that plan I’m investing in you I’m investing in your ability to scrape through through good times and bad times but it starts with a business plan it’s not optional I really worn don’t borrow the money from Grandma or aunt or uncle or your dirt retirement account too risky in my opinion on your first business hope you’ve learned something thank you for being with me you