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!
I have officially started my business plan with the help of purchasing Business Plan Pro. It seems like a great product, but I have gotten to a point where I need help. I am to put together projections about finances, and industry growth. I think I can find the research for industry growth, but I am not really skilled with financial analysis.
Specifically, I will need to find out how much money I need to ask for, and how to determine how it will be payed back to the bank (SBA).
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.
I must admit I am a bit shy when it comes to approaching the "bank". Can I go to the SBA and ask these question I am asking here?
How do you project growth when you don`t know how the public will receive your offerings. I know I will have several clients on board right away, but that is not enough to pay for everything. My current company does not advertise one bit. The work I get is through word of mouth about what I do. I am encouraged by this because I think advertising done the right way, and references from some larger clients will make a world of difference in terms of finding new business.
That is where I am stumped. How do I forecast what I will make, or do I even do that? Is there a way to look at what percent of the market you have in a given segment, for example "the home building market". Calculate what is left to capture and use those figures in the business plan?
Am I close to understanding the material need for finacials?
To other posters, I am bringing some cash to the table yes. I will bring about 15 - 25,000 of my own money. Plus the machines wil be thought of as collateral to the bank or lending institution.
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.
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.
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.
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.