Forums: Discussions for entrepreneurs and small business.

Hello everyone,

 

First make sure you can take the customers with out legal consequences from your current employer. It is common practice and even good ethics to start your business and not to take from your previous provider. About your funding request, I would contact the SCORE group at the SBA. Also how much skin in the game will you have. Are you contributing any capital to the project? SCORE may be able to point you in the right direction.

John


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Score has some worksheets set up in excel that will allow you to put in the numbers and all of the math will calculate on its own. Very good resources to work from. I had to play with my numbers about 9 or 10 times before coming up with something that would fly strait. Also, come up with a bare minimum budget (the least amount that you could live with) and a full budget amount that rounds up the cost of advertisment, space rental, development, etc. and try to go for the full budget first. Always better to get more in the beginning rather than getting the bare minimum and realizing two months later that you need more. You are going to have more issues going back for another loan that you will asking for it up front. All they can do is turn you down.

Onlineeater

In regards to my clients, these are clients that will simply not stay if I am gone.  I was the one responsible for them doing business with them. I acted as sales to them. In that light I will continue to do business with them. There are a ton of other customers that will stay for other services the company offers. I am offering a niche part of their printing business. Also, I will contact some of the customers that will not go with me, and let them know I am leaving to start my own business, if there is anything I can do please call me. That sort of thing, which they can make their choice.

My goal is not to really hurt my current company. They rely on other tyoes of printing more often, which is why they don`t want to grow. There is no NDF between us.

Thanks for the SCORE info, I will look at that!

Mike

Mike,

Congratulations on starting your plan. The process of developing your plan (and the decisions you will make during the process) will go a long way to getting the business started right.

 

I’m not familiar with the spreadsheets in Business Plan Pro (we often use BizPlanBuilder’s spreadsheets because they perform many “extra” calculations). However, the form (or worksheet) isn’t as important as the data that is entered into the cells.

 

The process of creating your financial projections and the result of the process will define how much capital you will need and the businesses ability to “service” the debt.

 

I’m sure there are people who can help you with this process. In fact, we have guided many clients through the process of creating their projections. If you have questions about your specific situation, contact me directly.

 

Robert Johnson

 

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Many people are a bit "shy" when it comes to approaching the “bank” or other sources of capital. We find that preparation builds confidence. Preparing yourself, your language and your plan will not only put you in a “better place” but also increase your probability of success.

 

Robert Johnson

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

I agree with John - I would strongly suggest asking an advisor such as Score for advice in preparing your forecasts.  A lender will not look kindly of you asking for their input on forecasts and cash needs.

Also, try to request the loan prior to spending all of your own capital.  Better to say I have $xx thousand to invest in the business rather than I`ve already invested $xx thousand and I`m tapped out.

By the way, if you`re looking for rules of thumb on how much money to request, then read my blog posting, Four Rules for Raising Capital.  It`s a summary of a recent column on Businessweek.com written by venture capitalist, entrepreneur and angel investor Christine Comaford-Lynch.

MLEBOVITS

That is what I read and hear, "Ask for more than you need."
I realy understand the need fo strong financial projections, and that is why I asked for help in here. I can not move forward in my business plan until I get by this part. I am looking specifically at the SBA (a)7 loan. If there is another program you may recommend I would love to hear about it.

Thanks 

Another product within the SBA 7a program is the Express Loan Program.  It`s for amounts up to $350 thousand.  The lenders who participate have a little more flexibility on the underwriting standards and the turnaround time for a decision may be a bit faster.  However, as the SBA only provides a 50% guarantee to the lender (compared to a 75% guarantee on the 7a), don`t expect them to more readily say "yes".

At the end of the day, you have to have a solid plan backed by solid assumptions.  The projections must show you can generate sufficient cash flow to service the debt.  Finally, you need to show the lender that in the event of a default, there is adequate collateral (business and personal assets) to enable them to recover any losses.

As for other sources, here`s what I wrote recently to another citizen of your state...

Check out an economic development center and see if they can`t point you in the right direction of a financing source that can provide a micro loan or grant.

South Carolina District Office
1835 Assembly Street, Room 1425
Columbia, South Carolina 29201
(803) 765-5377 | (803) 765-5962 (Fax)

Hope this is helpful.