Jim and I started two businesses and purchased two others, all of them being successful.  The lessons one learns both in purchasing and in starting a new business are different, but have similar characteristics.

Hiring great employees and knowing how to maintain a tightly run organization so there are profits left to invest have been my strengths. Maximizing the use of technology has helped make that possible and is one of the areas of expertise in which I excel.

A business plan needs to have clear steps in the procedure.  I want to see first the vision, or idea, of the applicant's goal, e.g., "I want to sell donuts."

Next, tell me the reasoning behind your choice of business.  Do you have any special expertise in this area?  Are you passionate about donuts?  Do your friends beg you to bake for them?  Basically, I'm wondering why I would want to invest in you and your idea.

Next, tell me why this business is different than all the other donut businesses out there, or why your idea of running the business will make it work.  Do you have anything new to add to the donut making industry? Or is this new idea a business no one really has in the area?  Basically, why is someone going to buy your donuts? You should put some numbers in this section.  How many other donut places are there, etc.

Next, tell me what you are doing right now?  Are you working full time? Are you employed?  Where is your day to day living money coming from while you start this business?

This helps me know how much time you are going to have to invest and how much money you will need to pull out of your business as it gets started. Include numbers for your living expenses now and how they are getting paid.  I love looking at spreadsheets for numbers.


Next, get out a spreadsheet and fill it with the following:

Preliminary Work:

Steps for the preliminary work and dates the steps will be accomplished. How much money will the preliminary work take?

Startup costs:

I am looking to see how much homework someone has done on the actual costs of running a business, here. List equipment costs, how much labor you need and tell me what labor the employees will be doing.

List the rent, utililites, payroll taxes you will have to pay.  There are also other costs, so list them here showing a 12 month span, or whatever span you think you'll need to bring the company into the black.  Include interest payments on any loans. List the income per month you are anticipating.


Next, describe the following areas:

Bookkeeping:

Tell me what your bookkeeping plan is and who is preparing and going over the statements.  Tell me what financial statements you will be wanting to generated each month and what you will be wanting to see in them?

Tell me what you will do and what contingency plans you have in the financials - don't show what you want them to show at the end of each month.

Employees:

Tell me what kind of experience you have with working with people and how many employees you have managed.  If you haven't managed any employees, what kinds of life experience have you had, which indicate you can manage people?