Business Plan... what business plan?

BigDogatLarge

BigDogatLarge

Da pool gods are laughin'
Silver Member
I have found a spot to put a room, it is in a good location and the area has a planned growth. The spot I am looking at will, in two years or so be the center of the complex. I have the prices on the equiptment for the room and the bar and kitchen. Now a guy tells me I need a business plan. I told him I plan to run a pool room with food and beer and wine. Not good enough it seems. My question is, how to you make a business plan. You guys helped me when I wanted to know why I should open a room at this time. I liked the thoughts and ideas, now I need some more help.

Thank you,

Dwight
 
well the web is full of good and not so good templates for creating businessplans....but in general terms you'd have to include calculations on the estimated turnovers for the first couple of years....costings, plans on how you will finance it, revenues...the more details it has...the better...shows you as someone who is prepared won't be surprised by anything....so what does it cost in salaries, permits, furbishing, stock, utilitybills, security....anything you can think of....
Not necessarily all in the actual business plan, but as supportive documents for the plan so if potential investors question something...you can prove that you've counted for everything...even provisions for the unexpected....basically you've got your shit together and they won't be left hanging dry
 
Contact your local Small Business Administration. They have lots of good information on preparing a business plan. You can even get hooked up with someone who has already done it successfully to coach you through the process. They won't do it for you, but the will get you going in the right direction.

If you are the type of person who wants to do things on your own, there are software programs you can get that will help you prepare a business plan.

My concern would be that if you aren't already familiar with business plans, you may not be ready for everything involved in running a successful business. Also, be prepared to just about give up pool...if you do it right, you will be too busy running the room to have much time left to actually get on a table.

Steve
 
The guy above me gave good advice. Find out where your local economic development group is located in your city and call them up. Somewhere in your town, there is a local angel investor network. Track down their spokesman/woman.

First thing's first....

There are four places to "get money"......

1) Government/SBA
2) Bank
3) Institutional Investor
4) Angel Investor

To complicate matters....the type of business plan each group likes to see is a little different and spun in a different way. Not all business plans are the same.

I'll jump to the end because I can write all day on this boring stuff. Go to your angel investor network for something like this because the amount of money you need falls right within their sweet spot. $50-$250k range.

When you research how to do a business plan, make sure it's focused on strong research for your area/region and tie that directly to return on investment and time frame to do so. NOTHING else matters. NOTHING.

The purpose of a business plan is to show someone you have a clue--- but on top of that for a potential funder to calculate how they will get their money, how soon they're get their money, and what the investor's exit strategy is (equity/loan, straight equity, maybe a combination of equity position and then once you pay them off, they keep a small %).

No matter what, if you ask for an angel's money -- no matter what you put up, you're sure to own less than 40-50% of the company....no matter how awesome your concept / plan is.

In my opinion, and I don't care what anyone on this board says.... a business plan's value is the fact that you actually go through the process to do it so you understand all aspects of the business. After that, it's ONLY value is to convince an investor you can and will pay them back, and what they get for doing that. It doesn't help you run the business-- you should already know how to do that.

As soon as you open the doors to the business....EVERYTHING changes, EVERYTHING needs to be adjusted, what you thought you knew is no longer relevant. It's like a war plan... as soon as the bullets buzz by your head, it goes out the window.

Some people spend months and months writing and revising business plans. If you let it, it'll be a never-ending process. Be CYNICAL with it and know the purpose of it--- and write it as if someone were asking YOU for the money so you'd know what you'd want to see. Don't ask the bank for help. Find a local certified investor who you can pay on the side to consult with--- someone who can help you with the plan. People with $$$ know how their friends like to read business plans----NOT the bank or government. Page 1 was a letter thanking the person for reading it and a paragraph of what i was planning to do.....Page 2 was an executive summary of the money I planned to make, the money I needed and what I was giving up. Get right to the point early.

Hope that helps.

Dave
 
Last edited:
You're right, a good business plan is necessary as a guideline but also as a method for raising money.

How many times did I revert to my business plan after I opened? Never.

The harsh reality of the real expenses and "babtism by fire" of all the things involved in operating a good sized small business will overshadow anything you have in a business proposal.

My place was a little ambitious, with a full kitchen, full bar, 30 employees and 24 pool tables.

As a guide to get you started it's imperative to have it, though.

You can get templates on line for how to build a business plan, but make sure it contains elements of everything you want to do, including a theme, atmosphere, promotions you plan on having, etc.

A saying I got out of a chinese fortune cookie that I still carry in my wallet "Opening a business is easy, keeping it open is difficult."
 
Finally... this is a little harsh but 100% true.....

Investors and banks bet on the jockey and seldom the horse. If your resume doesn't justify the money you're asking for ---- find someone who has a good business background and make them a partner--- and give them a title that's above your title. VERY VERY VERY VERY crucial. Don't let ego get in the way of securing funding. S-Corp so you must pay dividends in % to ownership. If you setup an LLC, you might be an owner, but paid as an employee until an investment is paid in full. I'm a little foggy on this, since it's been 8 or more years since I've been counseled on this. Check it out.

That's the best advice you'll ever get.

Dave
 
run, don't walk . . .

Find the local or closest SCORE office now. This is the Service Core of Retired Executives. They can help you with the framework of the business plan and bunches more. A free service, I strongly suggest you use it. They will pair you with an advisor that is best able to help you.

Hu


BigDogatLarge said:
I have found a spot to put a room, it is in a good location and the area has a planned growth. The spot I am looking at will, in two years or so be the center of the complex. I have the prices on the equiptment for the room and the bar and kitchen. Now a guy tells me I need a business plan. I told him I plan to run a pool room with food and beer and wine. Not good enough it seems. My question is, how to you make a business plan. You guys helped me when I wanted to know why I should open a room at this time. I liked the thoughts and ideas, now I need some more help.

Thank you,

Dwight
Click to expand...
 
Hu beat me to the punch. SCORE is definitely the place to go for help. The SBA in your state, or your local chamber of commerce, can tell you how to reach them, if they are not listed in the phone book.

Scott Lee
www.poolknowledge.com
 
SpiderWebComm said:
S-Corp so you must pay dividends in % to ownership. If you setup an LLC, you might be an owner, but paid as an employee until an investment is paid in full. I'm a little foggy on this, since it's been 8 or more years since I've been counseled on this. Dave
Click to expand...

In an LLC you can elect to be treated (taxed, make distributions...) similar to an S-Corp.

A side note on the biz plan. One key aspect is your Pro Forma. It's your projected financial statement itemizing all revenues and expenses. It will include everything - including amortization/depreciation and tax obligations. However, once you are actually conducting business, I've found it useful to update my Pro Forma from "projected" to "actual". On a month by month basis I update. And my spreadsheet calculates variances. This helps me understand the variances and make me better at projecting the future. That way I can spend my money before I earn it. :eek:
 
Business plans

Good suggestions above. I first learned to do a formal business plan in Graduate School. Besides the suggestions above, a good graduate level
textbook could show you what is needed for a business plan.

Contact a University advisor for a suggestion of what book to buy to show you how to do a business plan.
 
KoolKat9Lives said:
In an LLC you can elect to be treated (taxed, make distributions...) similar to an S-Corp.

A side note on the biz plan. One key aspect is your Pro Forma. It's your projected financial statement itemizing all revenues and expenses. It will include everything - including amortization/depreciation and tax obligations. However, once you are actually conducting business, I've found it useful to update my Pro Forma from "projected" to "actual". On a month by month basis I update. And my spreadsheet calculates variances. This helps me understand the variances and make me better at projecting the future. That way I can spend my money before I earn it. :eek:
Click to expand...

Super advice.

I never opened a pool room... but find a way to lock up residual revenue (memberships, something like that). That will help with actual vs. projected....and investors love that stuff. I would suggest not to project too far with the pro forma...3 years is good. Many resources say 5, but shit, the world can end in 4. Who knows what'll happen that far out.

A hard lesson I learned was not to get too overzealous with the projections. Investors can smell horseshit from a mile away.
 
SpiderWebComm said:
Super advice.

I never opened a pool room... but find a way to lock up residual revenue (memberships, something like that). That will help with actual vs. projected....and investors love that stuff. I would suggest not to project too far with the pro forma...3 years is good. Many resources say 5, but shit, the world can end in 4. Who knows what'll happen that far out.

A hard lesson I learned was not to get too overzealous with the projections. Investors can smell horseshit from a mile away.
Click to expand...

Spider Dude is spot on. Don't fall in love with the numbers. You can do your projections with pie in the sky #'s if you want, but keep it for motivation and TP. Use the most conservative #'s you can. Wherever you have to project, project on the conservative side and if you beat the #, then that's great.

By way of silly example: "Ohhhh, if I get 148 visits a day, and each customer spends $28 then I'll be rich!" Uh uh... Knock it down to 80 visitors and $12 a head, 'cause most pool players are tighter than a Nun on a first date and you're advertising agent is overselling your reach.

Best of luck on a successful venture!!!!
 
business plan

Hey Dwight,
Try FAMU's small business administration program for ideas. They answered quite a few questions I had for free!!!!!!! We need to talk Sunday evening about your ideas. i am curious.
Tom Gedris, Triple Cross Cues:cool:
 
Thank you all for the good advice. I always talk about doing something for pool and the players. I never knew it would take all this and I am glad that my online family of players and friends are helping me to reach my goals. I will find out about SCORE and the SBA in my area. When I open, all of the above are invited to the room. You all have to pay though... lol j/k I know jay and eric and manwon will chime in and they are invited as well. So is Smorgie. Wish me luck, going for it.

Tom, I'll meet you there around 8:30 or so. Thanks for being there.

Thanks again,

Dwight
 
You must log in or register to reply here.
Back
Top