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Kids Kreative Korner

 

YOUR BUSINESS PLAN

In This Third Article on Business Plans, Bonnie Drew Begins Looking at the Actual Information You'll Need to Include.

By Bonnie Drew

Part Three

In writing your business plan, you must tell potential investors or partners about your idea. You'll be defining the business, describing your product or service, and listing your resources. Let's begin with the business itself.

DEFINE YOUR BUSINESS

1. What is Your Business Name?

One of the best ways to let people know you are serious about your money-making plans is to give your business a name. A good business name symbolizes your business concept and tells customers what unique services or products you have to offer.

A business name can indicate:

* What you do (Maid-for-a-Day)

* Who owns the business (Frankie's Crafts)

* The location (Main Street Car Wash)

* Quality of service (A-OK Cookie Company)

* Your Symbol (Rainbows Unlimited)

Looking through the Yellow Pages of the phone book is a good way to get ideas for your name. However, you must never copy a name that is already being used by another business. Your customers will be confused, and it's usually illegal.

When you have chosen several possible names, take a survey among friends and family to see which is best received. If you plan to operate your business under any name other than your own, you must go to the office of the county clerk at the county court house and file a DBA form. DBA is short for "doing business as."

Filing a DBA form officially registers you as the owner of the business and makes it legal for you to operate under an assumed (or fictitious) name. The DBA form also reserves your business name so that no one else in the county can use it. The bank will require a copy of the form if you wish to open an account in your business name. You should also include a copy of the form in your business plan.

2. Where is Your Business Located?

Most young entrepreneurs do business from their home. You may need to talk to your parents about specific work areas the family is willing for you to use. Will you work in your bedroom? The garage? In the kitchen? Do you need storage space for equipment and supplies? These are decisions that need to be made now.

Set up a place at home for an office. It doesn't have to be a large space. A corner of your bedroom or the desk where you do homework is fine. Always keep your business papers, records, and supplies in the same place.

3. What is the Purpose of Your Business?

Have you ever been embarrassed when you tried to tell someone about your business because you couldn't think of the right words? The way to overcome this is to practice answering three questions:

* Who am I?

* What do I do?

* What is a unique benefit (purpose) of my product or service?

When you can answer these questions in one sentence that takes about 10 seconds to say, you will no longer feel so awkward when you meet prospective customers. Practice the statement on paper until you're satisfied with the wording. Here's an example of a well-planned mission statement:

I'm Sandy Smith, owner of Morgan Street Muffin Factory, and I deliver fresh muffins to your door every Saturday morning at half the price you spend at the local market.

4. What Are the Legal Requirements?

There are three basic legal forms of business. You must choose whether to operate your business as a sole proprietorship, a partnership, or a corporation. There are advantages and disadvantages of each:

* Sole Proprietorship--This is the simplest and most common form of business operation. It's easy to start and requires no legal assistance by an attorney. You are the only owner. You make all the decisions and you receive all the profits. The only disadvantage is that you have no one to share the responsibilities.

* General Partnership--A partnership is formed when two or more people agree to joint ownership of a business. Having partners gives you more resources, more startup money, more workers, and (hopefully) more earnings. To avoid conflicts, partnership agreements should always be made in writing. Office supply stores have sample partnership agreements, but legal partnerships are normally set up with the help of an attorney.

* Corporation--This form of business is not usually recommended for young entrepreneurs. Becoming incorporated can cost anywhere from $200 to $1,000 (or more) and usually requires an attorney to handle the paperwork.

When you start a business, it's very important that you obtain any licenses or permits required by your city, county or state. If you are selling a product to the consumer, most states require that you collect sales tax. Service businesses, however, are usually exempt from sales tax. 

5. Who Are the Key People Involved in Your Business?

Write a paragraph in your business plan about the skills, talents, and experiences you are bringing into the business. Detailed information about your qualifications is particularly important if you're looking for a loan. If your business is a partnership, include the same information about your partner.

6. How Much Time Will You Invest?

This is the time to look closely at your current schedule and determine exactly how much time you can devote to a business. One way to get a realistic picture of your time demands is to keep a time log for two weeks. Each day, write down what you're doing, hour by hour. Then study the log to see how you can make time to run a business and keep your customers happy. A schedule of the times you plan to work should be a part of your business plan.

7. What Are Your Goals for the Future?

This is the part of the business plan where you talk about the dreams you have for the future of your business. How will it grow? What will it become? Where will you be six months from now? A year from now? Two years from now?

Goals should be stated in terms that can be measured. How many customers do you need? What equipment will you buy? When do you expect this to happen? Give yourself a time-line for accomplishing the goal and a way to measure your success. For example:

By next summer, I plan to own a riding mower and have three commercial mowing contracts.

Allow yourself to think big. A goal should be exciting and challenging. It should put a sparkle in your eye and make you feel like working a little harder. So give yourself a dream worth striving to achieve.

NEXT ISSUE: More on the Business Plan

Bonnie Drew is the author of FAST CASH FOR KIDS (2nd edition), published by Career Press (1-800-227-3371). She is also the creator of the KIDS BUSINESS software for young entrepreneurs, available from Homeland Publications (713-332-9764).

Drew is also Editor of YoungBiz online magazine, published by Kid's Way, Inc., a company that helps youth prepare for business and the workplace of the 21st century. For more information, write to Kid's Way at 5589 Peachtree Rd, Chamblee, GA 30341 or call toll free 1-888-KidsWay (1-888-543-7929). YoungBiz magazine can be found at http://www.youngbiz.com

      

         

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