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welcome to how to write a business plan today's panelist is pamela reed and she is the minority business development specialist here at the arkansas small business and technology development center take it away pam tim thanks so much for um such a wonderful introduction and getting us for me with go to webinar um i'd like to thank everyone who's joined and uh who's spending a tuesday afternoon at the beginning of the year with us here at asb gdc um for all those of you that don't know about the asb tdc we are pretty much the go-to for small business development and support and information and so i'll start off by telling you a little bit about the asb tdc um as tim stated my name is pamela reed and i am the minority business development specialist at the asb tdc um i was previously our ed education specialist and before that i worked for verizon wireless and i also taught a couple of classes in the college of business on the campus of ua little rock um i have been a business owner myself for a little bit over 15 years and so i have a little bit of experience to go along with the education and the theory that we're going to talk about today in terms of writing a business plan um while i'm telling you about the asb tdc if you would just kind of check in on the chat and tell me exactly why you are here today why do you need to write a business plan or why do you think you need to write a business plan um you can even share a little bit about your business if you want to just really really quick check in on the chat for me uh tim as tim stated he is there to kind of feel some of your questions and as i go through everything i'm we'll look to tim to kind of tell us a little bit more about you as a participant in this course but the asb tdc is basically a non-profit organization that seeks to have a positive impact on economic development in the state of arkansas we have eight locations throughout the state of arkansas each is located on a college campus where a portion of the funding comes from that college campus and then another portion of the funding comes from the sba so this is your tax dollars at work with the services that we provide at the asb tdc um each one of our locations is going to be able to provide you with three basic services training such as what you're going to be here for today we can help you with anything from i have a business idea i'm not sure if it's feasible and i need a little bit of help all the way to i've been in business for several years but now i'd like to expand into a new area or i'd like to grow the existing business that i have and the asb tdc can work with you one-on-one confidentially to make those goals take place um during that confidential one-on-one consulting as i stated it can be anything from i'm trying to write a business plan to i need to seek bank financing to i really need to know who my target customers are the market has changed it has shifted i have new places that i need to go and i i think i need to go and i need the asptdc to help or i've been referred by the bank and the bank has told me that with the market research from the asb tdc they would feel a little bit more comfortable with um providing me with the financing that i need to move into a new area so we provide those three basic services and they're not going to cost you anything out of pocket because the sba has already paid for these things which is a great great like i said it's a great option to have um tim can you tell us a little bit about what people are responding um on the chat with certainly margaret says she's looking for some funding for a preschool and a recreational gymnastics program uh kevin is says my hope is open up a small bakery in a cafe one day uh diane would like to have a clear direction with her business and a way to decide what new ideas to even consider for her business stephanie is just wanting to learn about what makes a good business plan as i prepare to submit one for financial help to start my business and lastly constance says i'm waiting to grow this business i have and also work on another venture as well awesome that all sounds really really good and here's what i would tell you you know it was one of our founding fathers i think it was benjamin franklin that said if you fail to plan then you plan to fail and a business plan is going to be a living breathing document that's going to continually be updated as you change as your business changes as the circumstances altogether change within your business and so whether you use this document to seek bank financing or financing from a stakeholder or some other friend or relative or whatever the case may be or whether or not you use it for your personal plan it is definitely a great tool to help you with the planning process so today we're going to talk about understanding how to write a business plan we're going to discuss the most important points of the plan we're going to talk about a few tools and resources that are available for you i will give you an opportunity to ask questions and just so you'll know tim has been around he's a veteran he's been doing this for over 20 years and so he may respond to some of your questions in the chat um but he also can help field some of the questions as well and then we're going to also talk about the next steps so there's a lot of discussion uh around whether or not i should you know we hear this from a lot of clients should i start a business uh plan or should i create a business model canvas and on this slide you're going to see just a really really quick kind of comparison of the two basically what a business model canvas do does is it allows for you to sit down with nine key areas and map out which areas are most important so you can use it during the business planning process but you can also use it if you're in business to tackle and strategize for a particular issue the business may be experiencing it's a visual component it helps make a pitch if you need to make a pitch it does a down and quick dirty of describing the business it also communicates the value to the customer and you'll hear me talk about that a lot today um because the services that you're providing you know especially in a covered world i don't know if you all had a chance to experience um riva liquidsky am i pronouncing her name right uh tim thank you so much lesonski is the correct pronunciation um but she did a hot trends and tips for 2021 uh seminar last week and if you hadn't had a chance to look at that it's available on our youtube page please take a minute to go out and look at it people have the values are changing as a result of covet and what we're seeing is we're seeing a lot of people getting down to the bare bones of everything the necessities and so things that are nice to haves are going to be a little bit more difficult to find that value for but it doesn't mean that you can't um the business model canvas doesn't provide a strong emphasis on financing it is a good tool for brainstorming and it helps you get started so you may have a business model canvas that helps you with a particular part of the business or as a precursor to the traditional business plan now the traditional business plan it is going to rely on words and numbers um the model that i'm going to show you today it puts a lot of emphasis on quality and not quantity the model allows for you to have a much shorter business plan than some of the other models you see that will have 30 to 40 pages it guides how you build your business it looks at the business from the owners and customers perspective it puts a strong emphasis on the finances of the business and how you spend money it's not set up for brainstorming and it does help your business to become successful now here's what i tell almost everyone if you're going to write a business plan again it is a living breathing document and when we first start our business often we have a lot of ideas we have a lot of things that we want to do and some of those things we just don't have the financing or the market or the management to allow us to do those things right now those are the three areas that we refer to as the tripod of i'm starting a business that's going to be the money the marketing and the management piece now if you find that there is some area of that missing and you've got all of these great ideas you may have to sit down and write a business plan that has a i'm starting right now outlook this is day one okay but that business plan also may have an aspect that says okay this is year three this is my three to five year plan this is my five to ten year plan and this is what i plan for my business to look like in however many years because what it allows for you to do is it allows for you to start with the resources that you have today in order for you to become a successful business owner so one of the purposes of the business plan is going to be to organize it is an organized way of analyzing the business it helps you to clarify and amplify your thinking it helps you to also identify benchmarks to evaluate progress because if you're looking at your business plan regularly where you whether you're looking at it on a monthly basis or every three months or whatever the case may be you're going to know if you're on the right track if you're not reaching your goals and so what this business plan helps you to do is it helps you to create benchmarks so that you can see if you're on track or if you need to make some new decisions in the business it is a management tool for making decisions again it's a living breathing document and it helps you market your business to potential lenders landlord landlords suppliers and employees and i would even say family and friends because some of those people are your first supporters of your business now the to the point business plan is going to cover the most important aspects aspects of your business it emphasizes the importance of not skipping steps and i'm going to go step by step with you today and again the stress is quality over quantity now here's the first page of your business plan or rather excuse me this is the cover page and so your cover page is gonna definitely have your owner's name um it's gonna have your company logo if you've got one it's gonna have any applicable phone numbers on the mailing address email address website and so forth and it's going to have a confidential confidentiality statement if one is um available and you will sometimes hear this referred to as the non-disclosure agreement if you have an idea that you don't want to be shared with others or a limited amount of people then you might want to go ahead and work with a lawyer to create a non-disclosure agreement to ensure that it's not being shared around but just like any other document that you write these this information that's provided on your cover page is going to be the basic details of the business all right so here's what's in your business plan you're going to have a cover page you're going to have a table of contents if it's applicable um again we stress quality over quantity but if your business plan gets to be a little bit lengthy you know it it helps the person that's going to review the business plan to be able to get to the information that they need quickly it's like i you know i told you i was a writing teacher so one of the things that i stress with my students is making sure you take yourself out of the writers mindset sometimes and start to think about your audience so we have something just to use a textbook term we have something called a rhetorical situation and in the rhetorical situation you basically have about four parts um you're going to have your writer obviously you're going to have your purpose um you're going to have your audience and then you're going to have your contacts now the context is obviously where we are now we are in 2021 talking about business in america in a post or a currently covered world that means that context is very very applicable because most banks are going to have a little bit of uh restriction in terms of loaning money so if you're using the business plan to um seek money from a lender you've got to be realistic about the fact that a lot of people are tightening up right now um and so as a result of banks tightening up or other stakeholders tightening up you want to make sure you give them the best explanation possible so that they can see the outline or the structure of your business um and a business plan gives you an opportunity to do that so take yourself out of that writer's shoe because you you know you're the writer but take yourself and put yourself in a lender's position and think about what you need to know to ensure that you're going to pay my money back what do i need to know to ensure that this business is going to be successful what do i need to know to make sure i don't put this individual in a position to not be able to be successful and that's what a lender wants to know so think about that when you sit down and write your business plan so when you're putting that table of contents in there you're making it easy for the persons that are reading it to get to the information quickly you do the exact same thing when you include an executive summary your the table of contents is optional but the executive summary is something that you have to have because here's what i want you to keep in mind the executive summary may be all that a lender decides to look at or that first layer of the lender decides to look at because the bank loan officer let's keep in mind these banks you know often you have a loan officer that you've taken the time to build a relationship with that knows you and he knows your family circumstances and all of your circumstances but he often has to have an approval from a loan review board those long the loan review board is not going to have that personal relationship that you have so they may want to see how you look on paper and you've got to make sure that you outline things on paper in a way that you're communicating with him not only your loan officer but also the loan review board you want to have a company description who are you what are you selling what value do you create um you want to have products and services outlined you're going to have your financial proposal your management and organization operational plan financial planning and projections and your market analysis and then you're going to have an appendix if you have some additional documents that need to be added so here are the areas of the to the point business plan you've got products and services you've got your market you've got the industry you've got operations and management and then you've got your budget now the last thing that you're going to write is your summary but then it is the first thing that you present in your business plan and keep in mind a summary is just that it is a summary of the content of your business plan so let's start off by talking a little bit about products and services what do you plan to sell are you planning to sell a product or service are you planning to sell a service um and make sure you communicate and describe that clearly where are you going to sell it now keep in mind i i've been on to one of riva's webinars and so much business is going online um things like you know selling your groceries delivery food you know things that allow for customers to get the necessities with ease are really really banking and increasing the number of sales that they have so where is your business going to believe is it going to be a storefront business is it going to be in a brick-and-mortar think about that and what selling it there does for you what need or problem does your product or service address think about that as well and whether or not it's going to create some value for the customer when you start thinking about the pricing strategy and that value piece is going to be extremely significant because you know one of the great things about to the point to the the to the 20 i can't i got tongue twice i'm sorry but one of the great things about the to the point business plan outline is that it comes along with the sample and if i'm not mistaken tim it's going to also send that in the follow-up email ut that the pricing strategy that is included in the to the point business plan sample is a really really good example because it shows you how they're going to try to create value um one of the when you start to sit down and you look at your pricing strategy obviously you're looking at a lot of your finances and how much you sell the product for and all sorts of things but i would say that you also want to think about the value that you're creating for the customer because just because a customer might be able to afford it and it provides some type of convenience or some type of service or it meets some type of need it doesn't always mean that they will spend the money that they have on it and so you've got to get into some of the psycho graphics and things there as well when you start thinking about the market it's just like we talked about with the rhetorical situation you know you're the writer you've got a purpose you've got an audience there and you've got a context and so when we talk about market we are talking about your customer you know you know how many of the customers in a trade market area can you actually communicate with and get to buy your product or service and keep in mind with so much going online it's a it's a blessing because now the market has extended some but i guess the catch-22 in that is that also has your competition in that case and so think about your target market who exactly are you trying to sell products to you know who is already selling the products or services that you're trying to sell as well and if they are already in the market selling these products and services are you able to acquire some of the market share does the location play a part in this um there are some businesses that are set up purposely so that their coffee shop um is next to let's say for example we've got the starbucks inside of the barnes noble noble's bookstore people go into the barnes and nobles and they sit there and they read books and so the need for a beverage the need for food the need for snack is significantly increased so when you start thinking about location and where you're going to be you know think about how you can benefit from being in a certain place whether it's an online space or a brick and mortar um can you what is your marketing and sales strategy look like most people think that they can you know advertise their product or service on facebook or some type of social media page and that is going to be extremely cheap but if you find out that your target group is a bunch of 70 year old men then social media might not be the place for you you need to get in tune with who this customer is how you can reach them and whether or not and identify whether or not you can compete um with the folks that are already in your market trying to sell this product or service so sit down and think about your marketing strategy and be extremely creative and again the asb tdc can help with this because we are able to provide market research um and i'll tell you a little bit about our market research before we are done with our webinar today so when we talk about the industry here are some things that you need to think about you want to think about you when you get into your sales and marketing how do firms typically market themselves the location you know whether or not they advertise etc here's what you need to know about people it is an interesting thing most people like getting information where they have been getting information from they are very unlikely to go to new spaces um even though some of us do sometimes we just we're more consistent with what we've already been doing and so how do firms typically market to this particular customer this target customer is it in a different comic book is it going to be online is it going to be that they receive mailers or you know nobody gets a phone book anymore but a lot of us you know it took a lot for us to let go of the advertisements that were available in the back of the phone book so think about that target customer and where they're getting information from um one of the examples that we talked about or we will talk about today is um you know sometimes people 65 and up there they trust the television and most of them will get their information from a television show a particular show you know or a particular channel so think about those things as well uh finance and regulation is cyclical cash flow management and issue is regulation planning you want to think about any regulation that's going to come in the industry so for example uh we know that the car industry is impacted we know that a lot of makers are going to electric cars and because of the ozone layer and you know the discussions that we've had in our country around climate change it is very very possible but that there will be some regulation in the future that will require us driving these types of cars um be on the be on the lookout and mindful if there are regulations that affect your industry um there are some other industries like real estate um in dealing with children especially now that we're in a coveted world if you are in the business of a restaurant and any types of regulations regarding how you serve customers because of covet those are industry changes that you need to know what's going on with the type of business that you have um does the business have any challenges what really keeps the managers up at night uh for a person that's working in the restaurant industry bar none it's going to be employee turnover how do you avoid employee turnover and i've worked in the restaurant industry before and it is it's a little bit of a catch-22 but if you create the right culture maybe you're on boarding is uh you know set up in such a way or maybe you've created some type of incentive then can you overcome the issues that most restaurants have with um employee turnover it's just something to consider um industry opportunities what are the industry trends what are the niches uh what's coming about you know one of the things that i i you know technology that's that's an area that we cannot slow down we will not slow down at all and i think that people need to be mindful that um there are always going to be new technology trends there are always going to be things that make our life easier um a friend of mine she got a new car but in which she drifts into another lane she has the option to turn on a button before she gets in the car that her car will automatically pull her back over to make sure she's inside the white lines if she gets too close to a car and she's on cruise control her car will automatically start to slow down and so these are these are niches that are happening in the car industry right now um and we will all eventually be driving cars like that and and that's what i want you to think about in relation to your business um for the gentleman who is going to go into you know doing some type of bakery at some point that kind of thing you know how much do you already know about the cottage law um and how much you know do you plan to start in your kitchen and do then move to a brick and mortar where you can sell your your product out of a shop i mean it's lots of things to think about there because if you're under the cottage law then there are changes all of the time regarding what you can and cannot put into the food but you can save money by starting there so that you'll have a low overhead it's just something to consider so do your research know the industry and know that things are going to keep changing um and if you understand the industry then what's going to happen when you sit down and write this business plan then you're going to create your product or service in such a way that is consistent with where the industry is going because if you're trying to seek bank financing the last thing you want to do is to create your product or service for what's down and it's on the way out the door because now this may impact your ability to make money or it looks like it does in the eyes of a bank funder now in terms of operations the key positions in the business you want to know who those people are most of the time when we start out as an entrepreneur we are the business we are the brand it is one person and we need to be very very um aware of that but you want to make sure as that individual who's starting the business that you have enough knowledge and expertise in this particular business that a funder will again fund you for the business and then to ensure that the business is successful a lot of people have a great idea they have a great idea for area of business that they have no experience in whatsoever here's a recommendation to get around that hire a partnership with someone who does have the experience and then learn the business it is extremely important for you to learn the business from a business planning standpoint it doesn't matter if you're working in the business are going to hire somebody to do the day-to-day operations at the end of the month or the end of the week when you sit down and you look at your financial documents or you sign documents from your lawyer you want to know enough about the business to have confidence in making that decision and if you don't take the time to learn it you won't um you want to make sure that your key persons are qualified uh you know the restaurant industry definitely comes to mind the cleaning industry comes to mind you want to make sure that you have people in place that know the tricks of the trade and how to make money and save you money as well you want to think about uh including some compensation and incentives there and the reason this is here so early is because it's like we talked about that culture piece is it becomes extremely important when you're trying to onboard people um especially if you're a new business owner starting out and you don't have a lot of money to give someone so the incentives and the compensation um are going to be a very very delicate balancing act and may make all the difference and you getting the qualified people that you need to run successfully if you have to sit down create an organizational chart so everybody knows who's who and who should be doing what again think about your organizational chart you know your key people and how you create compensation and incentives and even an employee handbook i would say think about all of that together in terms of starting to build your culture some of the key businesses that i have seen that are extremely successful at dealing with people have created a culture by making sure that an employee knew what was going on as soon as they stepped foot through the door and then through that process they had a handbook to refer to there was no questions about who did what and if you have to make modifications as you go along then that's fine but it that in that moment you eliminated the confusion there it makes a difference um the last part of the to the point business plan outline is going to be the budget and in your budget we'll i'll show you an example in just a minute but you want to make sure you have your inventory you want to detail that out any equipment that you have it doesn't matter how old it is of whether or not you've been depreciating it for years it's still an asset you want to try to include that any deposits that you may have to pay for equipment or services or whatever the case may be think about how much things will cost i mean everything down to how much is it going to cost you to make sure that your administrative assistants has the right pins and paper and so forth do your employees have uniforms that are the right types of uniforms for them to be comfortable and do the work well you want to think about every single expense um something as simple as a cell phone or you know service or even a van tracker you want to make sure that you put those budgets uh the cost of those things in your budget to ensure that you have enough money because what a lot of businesses tend to run into is that while they've gone to the bank they had a stellar business plan they forgot to ask for enough money to get themselves working for at least three months um and what i'm suggesting to you is that you make sure that you've got enough money to st you know float yourself for while you're trying to accumulate business and make money with your business plan now this is an example of the an executive summary it's very clear it's concise and again it is the a summary of the contents of your business plan so here's an example of a budget it includes the loan amount the terms of the loan it's going to include how funds will be used collateral if applicable and then the owner's equity contribution remember if you're using a business plan to seek funding from a bank it is very very unlikely that the bank is going to give you 100 percent of the loan please plan between 10 and 30 based on the type of industry that you're starting a business in they're gonna the bank is going to want you to put some skin in the game and this is so so please plan to have some money to put in in your financial proposal the other piece that i want to talk about is the budget explanation and this is one of my favorite parts of the to the point business plan sample there are other samples out there that are available to you but this is a very simple straight line way of understanding it this particular business comes to the table with some churches that they're already servicing they've got three churches that they have been doing business with in july and august it tells you the church size how much they're going to pay for they're gonna charge by the square footage they plan on cleaning this church four times per month and the monthly revenue is four thousand dollars okay now when it comes to the next couple of months which is september and october they are now at four churches case you all can't see that so their their pricing strategy and their model calls for them to charge the churches by square foot okay but their plan is to gain one church per month at this same square foot rate and hopefully the church will allow them to clean four times okay so this is what i mean about the pricing strategy your budget strategy this is the budget explanation you want to think about how you're not only going to run the business and you're going to have all of these things going at one time you'll be wearing hats of you know an account and you'll be wearing the hats of a marketer you'll be wearing the hats of the cpa you know your insurance person the hr person you'll be wearing all of these hats at one time and so it works when you start to think about the planning ahead of time because what this church is saying in addition to we're going to clean all of these churches but it's also saying i plan on going out and having one church per month added to my particular servicing list that means he's doing some lead generation that means he's probably doing some proposals that means he's probably doing some free cleaning to show what he's capable of but all of that has been included and how they're going to acquire business for the business sorry for some reason it won't go you need to you've got your highlighter run you need to give it that i know that's kind of focus okay there it is i didn't have to do that last time so i'm shocked all right so the three financial statements that you will have in the business plan are primarily the income statement which is going to be your profit and loss the profit and loss generated during the reporting period which could be any reporting period which you're going to create for yourself you're going to have the balance sheet um which is going to talk about the assets and the status of the business at a specific point in time and then you've got your statement of cash flow um and it's for a period of time as well that you indicate this is going to be the income statement and this is just to give you an example of all of the different areas that a business has decided to collect expenses so as you can see at the top where it says sales this is the actual business making a sale from july to july you can see they start with that four thousand dollars we talked about previously and that they'v ended with sixteen thousand dollars and that's their gross profit okay but then when we get into their expenses they've got and it shows you exactly you know the profit this is a hundred percent of the profit but they've got a breakdown of what each one of these expenses is for them over here how much of all where is the money going so this gives them an opportunity to go back and say what's going on i have some opportunity in this area or that area depending on what the case may be the most money the most money the most money is going towards personnel for this particular business as you can see here and then they've got the total of the expenses the net operating income and as you can see they were in the hole for those first few months and then they started making a profit for the latter months i swear this doesn't like me all right so um then this is going to be the cash flow statement now a cash flow statement is definitely going to be king and you will hear us refer to cash as king you'll hear other people refer to cash as king because your cash really shows your ability to actually have money that's liquid and available on hand in the event of an emergency um to pay the bank or you know if you decide to get a loan and other things as well but because a business can have accounts receivable and accounts payable and it looks like the business has a lot of money moving around but at the end of the day the business can be broke it could be out of cash and so this statement of cash flow just gives a good projection of the money that you have available in the business at that time all right so focus on not only um the amount that of cash that you have but the timing because you're you're going to also be looking for um opportunities um that you're a bit you know just looking at your business and trying to determine whether or not it's cyclical or if there are other areas that you have shortfalls in so for example the cell phone company that i used to work for it basically made 40 to 50 percent of its income during the holiday season and that was years ago i don't know what it is now exactly but i'm using that as an example because during the summer months we didn't have that much cash flowing through so that was an opportunity to increase marketing that was opportunity to increase um promotions and sales so instead of buying one phone for 500 maybe we decided to sell you two phones for 500 so you've got to figure out what the opportunity is for you to improve sales during a certain time of the year so for example if you have a lawn care business you know during the holiday during the cold months of the year such as the holidays you're probably not as busy as you are during the summer and so what i've seen a lot of people do that are in lawn care is i've seen them start to move into other types of businesses like um hanging holiday lights or doing more gutter cleaning or you know something to this effect so think about your business in ways to avoid any type of shortfalls you really want to be able to demonstrate your ability to repack pay the debt especially if you're going to get in your bank financing with your financial planning projections i know it's a little bit complicated and it's um it's a lot to take in studying that sample will help some of you i mean you'll be able to get things down on paper but the asb tdc can help um and we can for some market research and you know we in which we'll probably do that anyway after you have you know put together a draft of the business plan we can kind of help refine things by going in and doing some market research so don't give up please continue on the process if it seems a little hard some things that you need to know about commercial lending decisions you know the bank wants to know can you repay me um they're going to always look at your owner's equity how much skin do you have in the game how much money are you bringing to the table for sketchy situations where they're unsure or they don't know if you know you've got too much debt or whatever the case may be they may be willing to take on some collateral again this is very very specific to your situation in the bank at that time the bank is going to always but always look at the owner's credit for small business um i've asked you know a couple of loan officers you know when does the business start to accumulate its own uh credit so that it can you know use these credit cards and do certain things and get loans and so forth and what i've been told is that the bank will always look at the small business owner's credit as part of the loan package um and then the bank is going to also want to know that they have a confident level that you can manage the business if you're unable to manage the business uh or or you know like i said you can work with someone or have a partner who does have the experience and the knowledge to manage that business as well and then the bank wants to know that you're going to make money if you don't make money then you know it's no reason for you to be in business and then there's no therefore no reason for them to lend to you so they're going to look at feasibility so you should have a good handle on this before you go and see a bank loan officer all right so market research here's what i want you to know about market research market research is a gift from the gods as they would say um it gives you the ability to better understand your target customer it gives you the ability to begin having a relationship with that particular customer um with potential customers with your competition um and so forth but in a in a you know in a normal relationship you would have to sit down and ask a person some questions well big brother has already done all of the research for you and all of those questions have been answered or very very closely to answer so if you want to know things about the target customer such as their age their race you know what gender they are they male or female how big is the household do they have enough income for the product or service that i'm proposing we are able to get that information um where are they you know we can help you to hone in and identify the trade area for what you have um during the covet 19 there were several people who went out and bought bikes you couldn't even find a bike at walmart and so the trade area for bikes obviously increased but prior to that it was a really really kind of niche thing um for people with certain types of bikes you know and it still probably is so for certain mountain bikes and things like that those folks may be in a different area than the folks that are trying to just ride a bike for leisurely time so it's just something to think about regarding the trade area um the market segmentation system you know it combines uh demographics with the buying behavior which is the psychographics and i'll get a chance to show you a tapestry right now all right so here's what i have in terms of some of the market restart search this is pretty much a graph of around the ualr area and as you can see it's drawn on a map it's right off of university here in little rock arkansas but it tells you specifically how much people are spending on different things and whether what the median income of that particular area is um the population the average age how much they make per year and so forth so here as you can see they spent about two thousand dollars on groceries annually well i'm more closer to three thousand um they spend about two thousand dollars eating out they spend about twelve hundred dollars or so on travel they make about 35 000 a year average age is about 33 okay so this is some very specific information that can be used to help you with market research here's another trade area this tells you whether or not we can sell a product in a particular area it's about five minutes from euler right off of um broadway now this one is i'm sorry this one is off of broadway in little rock and going over into the north little rock bridge so this can help you define a trade area for the product or service you're selling this is an example of a market segmentation group now when i was going through all those slides and kind of skipping we have about 6 000 different variables that we can pull market research on on everything from how much does a group of people make to their psychographics their age and so forth and so on but i've kind of already told you that this is a particular group in a particular area and as you can see it's the social security group and they're the residents most of them live alone 13 are older than 75 years old 13 are 65 to 74 years old most of them are renting they live in a highly dense area in a metropolitan area all of these things make a difference because if it's a highly dense area they're probably more likely to ride a bike use public transportation or something to that effect there are some assumptions that you can make about them based on where they're living most of their wages and income are set they don't do a lot of frivolous spending they trust the television they're limited by medical condition and rather than eat out they prefer to have their meals at home so if you're going to open a restaurant in this area then you might think about it again about this particular group in the area okay so we can also help with making a location decision with market research you know do you really need a physical facility is the first question we're going to ask um based on you know some of the research and you know what's going on right now in terms of context for coca-19 there are a lot of business who businesses who are going against the physical facility and then set instead trying to go online or they're partnering with other people to use space that is already being utilized and how to think about how the facility may contribute to the competitive advantage of of your business so for example um if you're just deciding to open an ice cream shop does it make sense that the ice cream shop is right next to a dance school or two doors down from a dance school or maybe it makes sense for this particular ice cream shop to be next to a toys r us or some type of toy store that key is frequently shopped at okay think about how the location can be a benefit to your business think about how you're going to budget and and as part of your location you know can you use signage to help you to advertise your business there are some things that you should consider there and then if you're not sure about your location you should also talk to an agent but but know for sure that you want to get a location then you want to think about speaking with an agent or broker all right one of the things that should be included in your market uh your business plan is going to be your competitor analysis there's always going to be some type of competition so even with the example that i provided from the sample that the owner had decided to do mega churches for lack of a better word um the owner had decided that they would gain one new mega church per year well some of the competition for a church would be its members because there are some churches who don't hire a cleaning service and have someone that they're going to pay a thousand dollars and want to come in and clean um they might now with covet because they want to do some type of sanitation but there are a lot of churches who have opted to buying um chemicals and their members are cleaning the church themselves and that's just something to think about so there's always a competition um just think about what that competition is if it seems a little bit indirect um but know who they are where they're located you know what are they selling what's their current share of the sales in a particular area what gives them a competitive advantage um i often ask myself you know we have if you go almost anywhere within a few mile radius there's probably at least two to three or four hispanic restaurants um in in the little rock central arkansas area and the question is is you know how did they gain a part of the market share what really makes them different but when i sat down and i look at it it's like well you know one of the great things about those restaurants is that typically you can always find food that's similar in terms of the taste and their offerings the other thing is is that you typically the food is always going to be within a certain price range um and then when you go and visit those restaurants to eat that food is usually always the same it rarely tastes different now what makes some of them different than others so that one may have a happy hour one may offer one dish or something slightly different or you know that's unique one may be more child friendly the location may be right up the street from your job which makes you and your co-workers go there regularly so think about what gives them a competitive advantage for that particular restaurant or for that particular location and then look for the niche opportunities where does your business come into all of this and it provides something that is slightly different in order to make sure that you can make some money when you write your competitor analysis know who the players are know who the players are understand how they have come into the industry impacted the industry and what you're going to do differently so some of the supporting documents that you need to include with your business plan again you're gonna have those five areas in your executive summary you're gonna have a really really tight budget you're gonna have a budgeting plan um you're gonna sit down you're gonna think about your competitors in there and do a competitor analysis you're gonna know who your target customer is you're going to spend some time developing your product your service or enhancing rather your product or services to meet a need or a why to make sure that you can add value to those customers lives and then you know you're going to sit down and really really work with it with an ast vtdc consultant to make sure that you've got the market research that you need to make those final decisions but you're going to include with all of this you're going to include your resume and your resume should show how you are qualified to run this type of business again if it doesn't show that there are well let me say this you can partner with someone but almost always there are some transferable skills that you can include you just need to find them and you need to talk that over with your loan officer and do some digging there um you're going to have a personal financial statement because the bank loan officer is going to want to know you know what does your financial house look like individually if you have to put something up for collateral you want to make sure that you have a collateral list a list of things that you can use that will add value to your loan package and then you want to break down like we saw in that budget and in that income statement how you plan to use the money because we saw basically he said hey here's what i'm going to put in i'm going to spend so much on supplies i'm going to spend some money on employees and then this is what i'm going to have left if i have anything left and it's probably going to go towards wages so you know think about those things as well you want to have any price quotes and estimates because a lot of times um we haven't taken the time you know we need money from the bank to make sure that we're able to get the equipment our inventory supplies et cetera what we need for the business include that in your budget for your business plan then if you've got tax returns you want to make sure that you have probably at least three years of your tax returns available um the bank will award those as well and if you if the bank doesn't want it your cpa may request it when they go in to set up some of your cpa and accounting and bookkeeping as well so the next steps for you in terms of writing your business plan is to sit down and really think about some of the things that i've talked about today and start writing your draft and i joke about this all the time but there's a book called shitty first drafts um and it basically you know says that the writing proce s is a process and so good writers know that they're going to have to go back and revisit something that they've already wrote probably five times um you may not you may get lucky and you may not have to do this but just to give you a little relief it takes a little while to develop a document that is living um that you will be modifying all the time honestly if you you know use the business plan as your plan for the business um so you'll sit down you'll write that draft it may not be all that you want it to be but start it write it once you have a draft the asb tdc can help if you need some assistance with firming everything up with that business plan um and then you want to sit down with a counselor um and and let wendy know because she's our intake space specialist that you have a business plan that you'd like to talk with someone about and then once you start building that relationship with your counselor then your counselor can help you with the market research and whatever you need to tighten up that business plan so that is what i have for you today does anybody have any questions all right thank you good job pam and i think we took care of most of the questions uh while everybody was uh listening we had a couple questions related to do the business plans need to be copyrighted you want mention that a little bit yeah i mean i think because it's a living document um you know it depends on what your product or service is now here's what i will say if you're coming up with something that's innovative um and technology based or you know if there is a product or service that you're creating and there's a fear of somebody else getting access to it i would take some time to spend with a patent or copyright lawyer and have them to take a look at it and i would have that part taken care of or pending when i write the business plan and i sit down with the consultant we do we work with the copyright and patent office out of dc um and if you need some information on that then just you know you there i think we've got some webinars that are available on our youtube channel okay and uh we just had a question pop up asking uh recording of the webinar is gonna be sent out as well as a copy of the presentation the answer is yes uh everybody will receive an email in about 24 hours with a link to the video and copy the slides to download okay um kenya wants to know uh if we need assistance can we still call and schedule a day in time considering uh copen you can most of our consultants are available uh via zoom or some other source that you're familiar with some other online platform but we are suspended right now from doing anything uh face-to-face because of campus uh ualr college of business policy if you'll call the number the 501-683-7700 or go to asbtdc.org you can also call this 800 number 1-800-8 um and you'll be connected with our intake specialist and she will get you taken care of all right we had another question regarding the slides and a sample business plan so just to remind everybody uh you'll receive two emails after the presentation one is gonna be from go to webinar that'll be my follow-up email and we'll have a link to the video the link where you can download the slides we're going to give you a link to the viva lasansky video that mentioned early also you'll get a link to the asb tdc's to the point business plan and our business plan sample so you'll be able to download access all of that uh about this time tomorrow afternoon that's right tim we got anything else it uh doesn't look like we have anything so we might make a last call uh you know you've got your own unique ideas for your business you've got pam on the line right now uh this is a good time to ask something specific about your particular business be it the bakery or a daycare or some other type business you're looking to start you know if you want to know a little bit more about the market research this is a good time to ask that question as well just type into the question area there at the very bottom of your control panel and we'll get that answered for you we sure will and tim while you're doing that i just want to remind everybody that the arkansas small business and technology development center is funded in part through a cooperative agreement with the u.s small business administration through a partnership with the university of arkansas of business college of business and other institutions of higher education all programs are extended to the public on a non-discriminatory basis so um be be sure to contact call us we are here to help to whomever it is concerned